UPDATE 2-Airline SAS makes surprise Q3 profit, shares leap

* Q3 pretax profit 114 mln SEK vs forecast 403 mln loss

* Shares rise as much as 11 percent

* Cost cuts proceeding as planned

* Results of union talks to be unveiled later on Thursday

(Adds analyst comment, share price reaction)

By Niklas Pollard and Simon Johnson

STOCKHOLM, Nov 5 (Reuters) - Scandinavian airline SAS (SAS.ST) posted a surprise pretax profit in the third quarter and said it expected to unveil the results of talks with unions on cost savings that are key to its survival later on Thursday.

Shares in SAS rose as much as 11 percent as cost cuts and lower jet fuel prices helped the carrier to a positive result of 114 million crowns ($16 million) in the period.

Airlines around the world have suffered during the economic downturn as individuals and companies cut travel and opt for cheaper seats.

European major Deutsche Lufthansa (LHAG.DE) provided a gloomy outlook for the airline industry late last month, saying any green shoots of recovery were being swamped by pricing pressures in both passenger and cargo services. [ID:nLS501235]

Industry body IATA has said it sees the world's airlines losing $11 billion this year. [ID:nLT509941]

SAS, half-owned by the governments of Sweden, Norway and Denmark, was already struggling before the financial crisis with an ageing fleet and higher costs than rivals and has spent years trying to restructure.

A major stumbling block to becoming competitive has been high staff costs and a major part of SAS's latest turnaround plan is getting unions to agree to reduce these.

SAS will announce the results of talks with pilot and cabin crew unions on lower pay and new conditions at 0930 on Thursday.

"Unless they strike a deal ... they (SAS) are not going to get a sustainable platform," ABG Sundal Collier analysts Lars Heindorff said.

SAS said it had been negotiating during the evening and night.