Six-month summary

8/7/2002 9:01 AM EST

· Operating revenue for the first half of 2002 amounted to MSEK 31,643
(25,948), an increase of 21.9%. For comparable units, operating revenue
decreased by 3.4% while operating revenue in the second quarter rose 0.1%.

· Income before depreciation and leasing costs for aircraft (EBITDAR) in
the period January-June amounted to MSEK 3,832 (2,408). EBITDAR in the
second quarter was MSEK 3,248 (1,237).

· Income before capital gains amounted to MSEK -133 (219) in the first
six months of the year. Income for the second quarter was MSEK 1,180 (142).

· Consolidated income before tax amounted to MSEK -407 (220), of which
Scandinavian Airlines accounted for MSEK -569 (-56).

· The acquired companies Braathens and Spanair had a positive impact on
consolidated income before tax of MSEK 315.

· CFROI for the 12-month period July 2001-June 2002 was 11% (15%). Since
the Group's return requirement is 20%, this result is far from what is
required to meet the set target.

· Earnings per share for the SAS Group for the period January-June
amounted to SEK -2.15 (0.87) and equity per share amounted to SEK 89.62
(104.95).

· Despite continued uncertainty as regards competitive and economic
development, the SAS Group expects that income before tax, excluding
capital gains, will be positive for 2002. Capital gains in 2002, including
costs for phasing in and phasing out aircraft, will amount to at least MSEK
350.


April - June January- March January - June
(MSEK) 2002 2001 2002 2001 2002 2001
Operating revenue 17,868 13,811 13,775 12,137 31,643 25,948
EBITDAR 3,248 1,237 584 1,171 3,832 2,408
EBITDAR margin 18.2% 9.0% 4.2% 9.6% 12.1% 9.3%
EBIT 1,354 167 -1,406 83 -52 250
EBIT margin 7.6% 1.2% -10.2% 0.7% -0.2% 1.0%
Income before 1,180 142 -1,313 77 -133 219
capital gains 1,039 180 -1,446 40 -407 220
EBT 5.88 0.79 -8.17 0.08 -2.15 0.87
Earnings per share
(SEK)



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President's comments

The SAS Group's earnings development in the second quarter followed the
plan adopted by group management in 2001, designed to restore profitability
and growth. The result for the period represents a strong recovery compared
with the significant loss in the first quarter. The increase in operating
revenue and earnings stems, among other things, from a determined program
of operational change and the strategic acquisitions in Braathens and
Spanair. The Group's strategic position has strengthened in several
markets.

Work within the Group in the spring followed four main lines: adjustment of
capacity to current demand, long-term earnings improvements and greater
competitiveness in airline and related operations, integration of the newly
acquired companies, and implementation of the Group's new structure.

Measures designed to get to grips with the immediate overcapacity caused by
the events of autumn 2001 have been implemented successfully, and the cabin
factor in the Group's aircraft has reached record levels.

The earnings impact of these short-term measures is expected to reach a
gross amount of MSEK 6,400 with full effect in 2003, of which MSEK 2,350
had been achieved by June 30.

Competition in the airline industry today is tougher than ever and comes
from both traditional airlines and low fare operators. Achieving sustained
profitability and competitive prices requires customized products and cost
levels which are radically lower than those we have today. Against this
background, a process of structural and long-term change is now under way
within Scandinavian Airlines which affects all parts of our operations -
everything from products to production and distribution. These measures,
which represent the biggest traffic restructuring in the company's history,
will provide more accurate control and a considerably lower administration
requirement. The total earnings impact of these measures is expected to
amount to MSEK 4,000 on an annual basis from 2004. Added to this will be
the effects of enhanced efficiency of administration at Group level,
restructuring in other group companies and synergies from integration of
acquired companies.

The acquisition of Braathens has provided a strategic strengthening in one
of our most important home markets. The ongoing integration of the company
into the Group is not taking place without sacrifices for employees.
Happily, however, we have already been able to achieve our aim of creating
a more efficient traffic system in Norway and our customers have been able
to benefit from our coordination in the form of lower fares. Braathens has
made a significant contribution to our improved earnings in the second
quarter. For Spanair, which has been consolidated since March 1, the
closure of unprofitable routes and a changed strategic focus contributed to
a significant improvement in earnings. Spanair is expected to be able to
report a positive operating result for 2002.

The turbulent and intensely competitive situation, which has now affected
the airline industry for one year, has made it essential to focus on day-to-
day operations. Over the longer term, and with several significant airlines
within its sphere, the Group must ensure that it has appropriate control
mechanisms. The SAS Group's structure with different business areas is
designed to meet demands for professionalism at every level and for
cooperation and coordination in the Group's best interests. The appointment
of two new members to group management, which was announced today, will
ensure the continued development of the Group's business areas.

The past year has perhaps been the most demanding and tumultuous period in
the history of the airline industry and SAS. The probable effect is that
within a few years the industry will have undergone major changes focused
towards fewer but more efficient airlines. For SAS the goal is unchanged:
to emerge from this process stronger and more competitive than before the
start of the crisis in the airline industry.

The process of change which is now under way and the sense of purpose I
encounter among SAS's employees, have strengthened my belief that we will
succeed. But this will not take place without major efforts and sacrifices.
We are still a long way from an acceptable earnings level and from the
return which our shareholders are entitled to demand on their invested
capital. The result for the second quarter of 2002 strengthens us for the
work which remains in order to meet the high expectations rightly placed on
us by our owners, customers and employees.

Jørgen Lindegaard

Outlook for the full year 2002
Development for the first and second quarter of 2002 has followed the plan
to restore profitability and growth adopted by the SAS Group. The trend for
the cabin factor and unit revenue (yield) was slightly stronger than
expected in the second quarter. The prospects for these key factors in the
immediate future are stable but there are risks in view of the market
situation within Scandinavia and economic development in Europe.

The short-term earnings improvement measures presented in autumn 2001 have
had positive effects in the first half of the year and these effects will
increase during the remainder of 2002. The process of structural change is
going according to plan and will have effects in 2003 and 2004. At present
the currency situation is favorable with a strong Norwegian krone and a
slightly weaker dollar. This will have a positive impact during the rest of
2002 provided these levels remain unchanged. The fuel price is also lower
in 2002 than it was in 2001.

Both in the year-end report in February and in its report for the first
quarter of 2002, the SAS Group expected income before tax, excluding
capital gains, to be negative for the full year 2002 but better than in
2001. Despite continued uncertainty as regards competitive and economic
development, the SAS Group expects that income before tax, excluding
capital gains, will be positive for 2002.

Capital gains in 2002, including costs for phasing in and phasing out
aircraft, will amount to at least MSEK 350.

Stockholm, August 7, 2002
SAS AB

Jørgen Lindegaard
President and CEO

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