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Perşembe, 21 Eylül 2023

Finnair’s loss halved in first quarter


In January-March, the Finnair Group’s operational result was a loss of 26 million euros, compared with a loss of 48 million euros a year earlier. Turnover fell by seven per cent to 481 million euros. Operating expenses declined by ten per cent. The result before taxes was a loss of 29 million euros.


“Unit revenue declined further, but the trend turned during the quarter. In March, turnover in the Airline Business segment rose for the first time since the beginning of the economic downturn,” says Finnair’s President & CEO Mika Vehviläinen.




“There have already been clear signs of growth in markets outside Finland, particularly in Asian traffic. Compared with its competitors, Finnair has increased its market share in traffic between Asia and Europe.”




In January-March, passenger traffic overall declined by nearly six per cent, which was mainly due to a reduction in leisure flights. Asian traffic grew by ten per cent. A total of 1.8 million passengers were carried on Finnair flights. The passenger load factor for traffic overall improved from the previous year by five percentage points to 80 per cent.




“In terms of scheduled traffic, the year began with a slight rise in demand. In March, scheduled traffic demand rose by 20 per cent from the previous year. Cargo demand is also rising strongly. The amount of cargo carried grew from the previous year by nearly a quarter.”




All of the significant cost items decreased due to reduced traffic as well as implemented efficiency measures. Fuel costs declined by 20 per cent. The market price of fuel is rising, but Finnair’s price hedging dampens price fluctuations. Unit costs for flight operations fell by just over ten per cent.




“Work to improve our productivity will continue. Unit costs excluding fuel costs fell in the early part of the year at the same rate as unit revenues. Most of the targets of our 200 million euro cost improvement programme have been recognised and are being implemented. Personnel have also participated in joint measures to achieve flexibilities,” says Vehviläinen.




In mid-April, most of European air traffic was grounded by an ash cloud discharged by a volcano in Iceland. Over a week or so, Finnair had to cancel more than 1,700 flights and more than 140,000 bookings.




“A good start to the spring was spoiled by the spread of the volcanic ash cloud over Europe. Estimates of the losses already incurred by Finnair are 20 million euros, but recovery of demand will still take weeks. I believe, however, following the dispersal of the ash cloud, that we will continue to carry increasing passenger numbers, because business travel in Asia and Europe is on the rise.”




As a result of direct revenue losses and extra costs caused by the volcanic ash cloud as well as a temporary fall in the passenger load factor, the result for the second quarter is expected to be clearly worse than the first quarter. “We have just come through a major crisis. It is difficult to assess how quickly we can return to the growth track. The signs perceived before the air traffic stoppage are encouraging, however. We expect our profitability to improve towards the end of the year.”

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