Finnair improves results in Third Quarter

Finnair improved its result in the third quarter 2004. The operating profit, excluding capital gains, rose from 5.3 million euros last year to 10.1 million euros. Turnover increased by almost ten percent to 422.8 million euros.

"The result was made in a situation where a price war is raging in the Nordic skies and oil prices are reaching record-high levels. Our operational environment has not offered us any free rides. During the past 18 months, we have met with eight new airlines in our home market, four of which are already inactive. Only a few of these companies fill the requirements for sustainable business," says Finnair President and CEO Keijo Suila.

Finnair's Scheduled Passenger Traffic increased by 31.2. per cent in January-September, which is triple the European average. "Our low-cost airline flynordic, which operates in the Scandinavian market, is gaining market share. The half million passenger target we set for this year will be clearly exceeded."

"In addition, the strong growth in our Asian traffic has continued. Next year we will again increase traffic to China. Focusing on our Asian strategy has created over a thousand jobs in the Finnair Group alone," Suila says.

Average prices in passenger and cargo traffic dropped by almost 11 per cent and unit costs by almost ten per cent in July-September. The number of personnel decreased by over 300 compared with the previous year.

"Even though our own development in these circumstances has been reasonable, we cannot be satisfied with our current profitability level. We have successfully worked to improve our productivity while maintaining a high quality of service. Finnair is still the most punctual airline in Europe and our service has received top marks from our customers."

The high price of oil is burdening all airlines. Finnair's fuel expenses for the current year are expected to rise above 210 million euros which is approximately 55 million euros more than in 2003. Almost half of the fuel price increase will affect the last quarter of the year.

"Expensive fuel will take the last quarter and the whole year into the red. I believe that we have what it takes for a profitable result in 2005. However, the development of fuel prices will remain a great uncertainty factor," the CEO stated.

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