Finnair Reports Q2 2010 Results

Finnair's turnover grew in the second quarter by 11% to 474 million euros. The operational loss was 14 million euros. The result includes losses of around 30 million euros arising from the ash cloud crisis. The result before taxes was a loss of 38 million euros.

“Strengthening demand, recovering load factors and clearly improved unit revenues have restored profitability to a positive course. It is also encouraging that cash flow from operations is again positive. It is clear that we cannot be satisfied with a loss-making result, but the trend in profitability is heartening,” said Finnair's President & CEO Mika Vehviläinen.

Turnover growth in the second quarter was influenced by increased traffic volumes and improved unit revenues. Scheduled traffic grew by 4% and revenue per passenger kilometres rose by 7%. Profitability has been improved by efficiency measures and improved load factors. Unit costs for flight operations fell by 6.4%.

“We have set finances on a better course by improving our cost competitiveness. We are continuing to implement our 200 million euro profitability improvement programme, the fruits of which are apparent in the result. The change in the market has also helped us, but we have to continue with our efficiency measures in order to improve our cost competitiveness,” added Vehviläinen.

In January-June 2010, Finnair carried 3.5 million passengers, which is more than 5% below the previous year's figure. Scheduled traffic grew by 5.5%. Asian traffic grew during the first half of the year by 13%. Leisure traffic, on the other hand, declined by 30%, because as demand fell tour operators brought their own aircraft capacity to Finland.

The cargo tonnage carried by Finnair grew 34%, which results both from a strengthening of the Asian market and the initiation of Finnair's own cargo aircraft traffic in May.

“In Finnair we have focused above all on traffic between Asia and Europe, where demand comes mainly from outside Finland. Growth of business travel demand now comes principally from Scandinavia, Central Europe and the Asian market,” Vehviläinen said.

Finnair will expand its long-haul fleet from 12 wide-bodied aircraft to 15 by next February. Additional capacity is required for the opening of a daily service to Singapore and more flights to Finnair's present Asian destinations, such as Hong Kong. The average age of Finnair's long-haul aircraft is 2.5 years.

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