Finnair (Helsinki) reported a second quarter net loss ofย โฌ23.9 million ($32.0 million), completely reversed from a โฌ18.1 million net profit ($24.2 million) in the same quarter a year ago. Additionally Finnair could be severely impacted on its Asian routes if Russia implements airspace restrictions for European carriers on its trans-Siberian routes.
Here is the full report:
Finnair Group interim report January 1 โ 30 June 30, 2014
Finnair Plc. Interim report 15 August 2014 at 09:30 EET
AprilโJune 2014
Turnover declined by 7.2% to 565.7 million euros (609.7).
The operational result was -19.6 million euros (7.5).
Net cash flow from operating activities stood at 69.2 million euros (101.2), and cash flow from investments totalled -92.2 million euros (-46.5). The cash flow from investments includes aircraft sale and leaseback arrangements implemented during the review period as well as advance payments for the first A350 aircraft.
Unit cost per available seat kilometre excluding fuel, (CASK excl. fuel), decreased by 2.4 per cent from the previous yearโs level.
Unit revenue per available seat kilometre (RASK) fell by 5.8%.
Finnair updates its guidance and estimates its turnover in 2014 to be significantly lower than in 2013 and its 2014 operational result to show a significant loss.
CEO Pekka Vauramo:
The second quarter of 2014 was difficult. Finnairโs turnover declined by 7.2 per cent year-on-year to 565.7 million euros. The factors affecting the decrease in turnover included a substantial decline in unit revenue, the loss of external turnover resulting from the restructuring of aviation services, and the weak development of tour operator Aurinkomatkat Suntours. The impact of the weak economic prospects in Finland on domestic demand and intensified international competition, particularly in long-haul traffic, had a negative effect on our unit revenue. The appreciation of the euro against our other primary revenue currencies continued to weaken our unit revenue from passenger traffic. The challenging operating environment has also been reflected in the revenue development of other airlines.
Our passenger load factors in AprilโJune improved year-on-year, and at the same time we made progress with our cost reduction program. I am pleased that our cost reduction targets and market-based approach have been met with understanding also among our personnel, and that we were able to reach agreement on the necessary cost reductions with some of our personnel groups. However, these positive steps were not sufficient to compensate for the drop in revenue, and our operational result declined to a substantial loss at 19.6 million euros in a quarter traditionally strong for Finnair.
Achieving the cost reductions we are pursuing and reaching market level costs in all cost categories is absolutely essential in this financial situation. Finnair is very committed to achieving a competitive cost level and structure.
Outlook
Outlook on August 15, 2014:
The ongoing uncertain economic outlook in Europe and Asia is contributing to weak consumer demand in our main markets. Air traffic is expected to grow moderately in 2014. Finnair, however, will not be able to benefit from that growth without progress in its cost reduction program and its target cost structure in place.
Finnair estimates its turnover in 2014 to be significantly lower than in 2013. Fuel costs are expected to remain high. Due to delays in the personnel cost reduction negotiations and the unfavourable market conditions driving the decline in unit revenue, Finnair estimates that its 2014 operational result will show a significant loss.
Copyright Photo: Karl Cornil/AirlinersGallery.com. Airbus A321-231 WL OH-LZK (msn 5961) arrives at Rome (Fiumicino).
Finnair:ย 
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