Scandinavian airline SAS Group warned today that it would not reach its earlier stated goal of a returning to profits in 2004 because of weak yields.
SAS had stuck to a target last month of reaching a positive pre-tax result before taxes, capital gains and other non-recurring items in 2004.
"Due to the development during January through May and the continued uncertainties about yields and the competitive situation, the board and the management's previous aim about a positive result before taxes, capital gains and non-recurring items, for the full year 2004 is expected not to be possible to achieve," the SAS said in a statement.
In early May, SAS reported a pre-tax loss for the first quarter in line with expectations, but said markets were improving and stuck to the positive 2004 forecast.
But today it said: "As a result of the continued large overcapacity in many markets and heavy price pressure, yields have, primarily for Scandinavian Airlines, developed very weak during April and May."
"The other airlines in the group have developed according to plan. In addition jet fuel prices have been at very high levels during the second quarter 2004," it added.
The group has, like other carriers, seen demand for high-margin business travel plunge in the past two years in a sluggish world economy but had earlier said that it was well positioned to benefit from a recovery.