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* SAS says virus outbreak affecting demand
* Says will cut short-haul capacity
* Says pursuing a range of cost cutting measures
* Measures could include temporary layoffs
(Adds details, background)
STOCKHOLM, March 3 (Reuters) - Scandinavian airline SAS
said on Tuesday it was cutting capacity and withdrawing
its financial guidance for the current financial year after the
spread of the coronavirus hit demand.
SAS shares have tumbled 35% this year as the virus that
began in central China has spread to dozens of countries across
the world, curbing airline travel and savaging stocks in the
sector.
"In response to the lower demand, SAS will in the next
couple of months seek to reduce part of its short haul network
capacity," the airline said in a statement, adding it would also
cut flights to Hong Kong and continue to suspend services to
mainland China.
"At this stage, it is too early to assess the full impact on
SAS operations and financial outcome and therefore not possible
to give a more accurate guidance."
Only last week SAS stood by its full-year outlook for an
operating margin excluding one-off items of 3-5%, but cautioned
things could change if the coronavirus outbreak were to spread
and extend to the summer holiday season.
Since then there have been more cases of the virus in
Europe, SAS's main market, and rivals such as Finnair
, Easyjet and British Airways-owner IAG
have warned of the impact on their business.
SAS, part-owned by the governments of Sweden and Denmark,
said it was pursuing a number of measures to cut costs,
including postponement of marketing and a hiring freeze, while
it was also looking to reduce spending on personnel.
"Measures related to personnel expenses may include
temporary layoffs, voluntary leave, early retirement or other
initiatives," SAS said.
(Reporting by Niklas Pollard; editing by Johannes Hellstrom and
Susan Fenton)
