Wideroe divestment talks progressing well: SAS

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SAS Group has initiated the sales process for divesting Norwegian regional carrier, as it stays optimistic over the prospects for profitability following its extensive restructuring programme.

Wideroe is among the assets being sold, along with SAS Group's ground-handling operation - which will be divested to Swissport if a preliminary deal is firmed.

"We have active dialogue with a number of potential partners or buyers," says SAS chief Rickard Gustafson, adding that the talks are "progressing well".

He has not disclosed the identity of the prospective investors, although Norwegian firm Braganza - whose portfolio includes Braathens Aviation Group - has confirmed its interest.

Local media have also tipped UK carrier Flybe and a group of Wideroe pilots as possible partners.

SAS has released first-quarter results for its newly-adjusted financial year. It posted a pre-tax loss of SKr823 million ($130 million) for the three months to 31 January.

"This is, of course, far from satisfactory," says SAS Group chief Rickard Gustafson. But he points out that the changed financial year emphasises the weak seasonal period, and says there is reason for optimism.

Unit costs, excluding fuel, fell by 2.7% during the quarter and this decline increased to nearly 7% as the effects of new collective agreements - sealed under the extensive 4XNG restructuring scheme - emerged in January 2013.

Gustafson says there is a "possibility" of achieving "positive" pre-tax earnings for the full year, as well as a 3% margin for earnings before interest and tax, if the operating situation remains stable.

Wideroe's revenues for the quarter increased by 7%, although its earnings fell by nearly 60% as a result of higher fuel and maintenance costs and increased competition.