Pre-tax profit at Scandinavian airline SAS slumped in the third quarter as hefty fuel costs and slowing passenger growth took a toll, and the company reiterated it would not make a profit after tax this year.
Soaring fuel prices and a weak market in Sweden have battered the company which is in the process of cutting costs and restructuring in order to remain competitive in a cut-throat industry.
Fuel prices are now 90 per cent above the same period last year.
The company said it had hedged half its fuel purchases over the next six months at an average price of $420 per tonne, adding to its costs.
The state-owned carrier of Sweden, Norway and Denmark posted a third quarter pre tax profit of 57 million crowns (€6.3 million) against €62.3 million a year ago.
"The negative market reaction is linked to the fact the results were below consensus, but this is mainly because it's very difficult to forecast SAS' results due to its high level of operational gearing," said Danske Equities analyst Mr Lars Heindorff.
Traffic numbers, which have been improving in recent months on the back of a nascent global economic revival, tapered off in the third quarter.
The airline's load factor - a measure of capacity use - fell 1.3 percentage points to 67.8 per cent compared with the same period in the previous year.
Yield, or revenue per passenger, fell 7 percent in the quarter due to competition and overcapacity, SAS said.
SAS said it had now achieved around 81 per cent of a cost reduction plan, which it aims to complete by 2005. "The fact that they confirm their cost cutting programme is running according to plan is the least one would expect, and is not in itself a positive trigger," said Sydbank analyst Mr Stig Nyman.