* Virus adds to concerns over economic slowdown in key markets
* CEO ses risk of big hit if outbreak extends to holiday season
* SAS has been increasing focus on leisure travel (Adds CEO comment, detail, background)
STOCKHOLM, Feb 26 (Reuters) - Scandinavian airline SAS on Wednesday stood by its outlook for the full year despite the coronavirus outbreak as it reported a higher quarterly loss but braced for the outbreak possibly extending into the summer holiday season.
Shares in SAS and other European airlines plunged on Monday as the arrival of the coronavirus in Italy indicated the crisis may be longer and deeper than predicted, extending into the lucrative summer tourism season.
CEO Rickard Gustafson said that if the outbreak does extend into the northern hemisphere’s summer holiday season, and spreads, the impact on SAS and the broader industry could be large.
Shares in SAS fell 6% in early trade, taking its loss so far this year to 25%.
So far SAS, which has increasingly focused on leisure travel over the past couple of years, saw no radical changes to bookings except to and from China, Gustafson said in the interview.
The holiday season booking situation was looking good compared with expectations at the turn of the year, he said.
Air France-KLM warned last week of a 150 million to 200 million euro hit to earnings by April as it contends with the epidemic’s “brutal” impact on the industry.
“As long as the COVID-19 outbreak is contained in scope and the suspension of flights is isolated to the winter season, this should only have a marginal impact on our earnings,” SAS’ Gustafson said in a statement.
Like most of the sector, SAS has suspended its flights to and from Beijing and Shanghai, but not its Hong Kong flights.
“The coronavirus could have a significant impact, but it’s very early days to speculate about it leading the company into financial trouble,” Sydbank analyst Jacob Pedersen said.
“The coronavirus could be a potential, even substantial earnings hit this year, but SAS should be able to recover from it,” said Pedersen, who rates the stock a ‘hold’.
SAS’ loss before tax in the November-January quarter rose to 1.09 billion crowns ($112 million) from 576 million. It had warned in December of growing losses in the quarter due to tough market conditions.
It stood by a forecast for an adjusted operating margin for 2020 of 3-5% but warned that the virus outbreak “adds additional concerns regarding a slowdown in key economies that may impact customer demand negatively.”
Asia reported hundreds of new coronavirus cases on Wednesday, as the United States warned of an inevitable pandemic and outbreaks in Italy and Iran spread to more countries.
($1 = 9.7253 Swedish crowns)
Reporting by Anna Ringstrom, additional reporting by Colm Fulton and Johannes Hellstrom, editing by Terje Solsvik and Louise Heavens