UPDATE 1-SAS August traffic down, says market weaker

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STOCKHOLM, Sept 5 (Reuters) - Scandinavian airline SAS (SAS.ST) said on Friday its August traffic, measured in revenue passenger kilometres, fell 0.7 percent and that demand was weakening.

The airline, half of which is owned by the governments of Sweden, Norway and Denmark, said its passenger load factor -- a measure of how successful it is in filling its planes --- was down by 2.1 percentage points to 74.4 percent.

July yield, the most recent month for which data is available, was down 1 percent, and SAS said it expected yield in August to be roughly in line with the same month last year.

Yield is a measure of unit revenue.

Loss-making SAS has been hit hard by the recent rise in fuel costs. It has also struggled to boost efficiency and meet competition from no-frills rivals.

The recent downturn in the global economy has hurt the whole industry. Global airlines are set to post losses of $5.2 billion this year and $4.1 billion in 2009, the International Air Transport Association (IATA) reckons.

"The market is now characterized by lower demand due to weaker macroeconomic development in Scandinavia," SAS said in a statement.

It said, however, that fuel surcharges were gradually having an effect and would support yields.

It said its Profit 2008 programme of revenue-boosting and cost-cutting measures worth 1.5 billion crowns this year was on track.

SAS shares were down 1 percent at 0922 GMT against at 1.2 percent fall in the wider Stockholm index . (Reporting by Simon Johnson, editing by Will Waterman)