SAS is ending the year with a historical annual loss of $1.2 billion and is preparing for more financial trouble in 2021. 

On December 3, 2020, SAS Scandinavian Airlines reported a SEK10.2 billion ($1.2 billion) loss before tax for the financial year from November 2019 to October 2020. In comparison, the company reported a profit of around SEK800 million ($95 million) the year before. It said that the COVID-19 measures were the most significant contributor to the deficit.

“Our quarterly and fiscal year earnings were severely impacted by the ongoing pandemic. After seeing demand slowly improve during the summer, an accelerated number of COVID-19 cases in September and October unfortunately led to reinforced restrictions across Europe with reduced demand as a direct consequence,” said the company’s CEO Rickard Gustafson.

With the second wave of the pandemic, SAS had to gradually reduce offered seat capacity to well below 40% by the end of October 2020. Over 65% of SAS's markets had travel restrictions at the end of the fourth quarter of 2020. 

SAS has also committed to refund its customers for cancelled flights. As of December 1, 2020, the company still has approximately SEK0.9 billion ($0,1 billion) to repay, according to the company's Q4 2020 financial report.

To increase the liquidity, the company started the process of retiring 21 aircraft earlier than planned, including 15 Boeing 737, five Airbus A340 and one Airbus A330 aircraft. In August 2020, SAS also had an agreement with Airbus to delay the arrival of eight A320neo and two A350-900s.

Gustafson said that due to low demand and future repayments, the company is prepared for financial challenges in the first half of 2021. The company is hopeful that after the vaccine roll-out, the recovery will slowly start in the second half of 2021. 

“When we get to 2022, demand should reach levels that are at least comparable to what they were before the pandemic. Not all the way, but a big step up,” Gustafson told Reuters.

However, even with new travel restrictions and ongoing lockdowns, the company managed to increase the number of flights during the Christmas holiday period. SAS will offer a total of 129 routes to 82 destinations.

In October 2020, Denmark and Sweden, currently the largest owners of SAS, secured the rescue plan to restore the company's equity by $1.5 billion (SEK14.2 billion).