SAS makes first annual profit since 2007 SAS has made its first annual profit since 2007 as the Scandinavian airline reaped benefits from the deep cost-cutting programme that saved it from bankruptcy last year. But the long-struggling airline warned that the weak European economy meant it would miss its financial goals for next year, and pushed back its target of 8 per cent operating margins until 2015-16. SAS eked out a net profit of SKr179m in the year to the end of October on flat revenues of SKr42bn. SAS became emblematic for the woes of small legacy airlines after the carrier, based in Sweden, Denmark and Norway, clocked up more than SKr15bn of losses between 2008 and last year. The group was weeks away from bankruptcy a year ago before it reached agreements with its pilots and cabin crew on pay cuts of up to 15 per cent and curbs on retirement benefits. The dramatic nature of the negotiations still rankles with Swedish workers and unions. Karl-Petter Thorwaldsson, head of the main trade union confederation LO, said recently: "We were really angry at that time. The way they made the agreement isn't very good. At the time he called it "a crime against all the Swedish model stands for." Rickard Gustafson, chief executive of SAS, hailed the profit as a sign that the turnround was working despite fierce competition from low-cost carriers like Norwegian Air Shuttle and weak economic growth. The results are evidence that our established strategy has started to improve our competitiveness. We have increased productivity and the unit cost, excluding jet fuel, fell 5.9 per cent during the year," he said. SAS has also sold off a number of businesses including its Widerøe regional airline in Norway as it shores up its balance sheet. However, the airline warned that the current quarter would "as usual [be] extremely weak." The group added that its target of making an operating margin of more than 8 per cent would not be achieved until 2015-16 due to weak market conditions. In 2012-13 it made an operating margin of 3.3 per cent with pre-tax profit coming in at SKr433m compared with a SKr3.3bn loss last year. It bemoaned a 10 per cent increase in capacity in the Nordic region during the fourth quarter despite "a continued weak macroeconomic trend." It added: "Developments in the fourth quarter underlined the speed at which conditions change in the airline industry."