Finnair Posts €15 Million Quarterly Loss

Finnair has reported a deeper-than-expected quarterly, saying it hoped the government would allow its ownership in the firm to be reduced to keep doors open for mergers and acquisitions.

The airline has struggled in recent years with tough competition from discount carriers, but cost savings and a focus on flights to Asia helped it make an annual profit last year.

In its seasonally slow first quarter, Finnair booked a core operating loss of EUR€15 million (USD$17 million).

Finnair said low market fuel prices were not fully reflected in its results due to hedging, but added that its fuel costs would decline later this year and sales were set to grow in 2016 with the help of new aircraft.

The Finnish government, which owns 55.8 percent of Finnair, is reportedly planning to scrap a clause obliging the state to hold a majority stake in the carrier, and put the issue to a vote in parliament.

Finnair chief executive Pekka Vauramo told a news conference that such a change would help it prepare for possible consolidation.

"Finnair too should prepare for the consolidation in every way, so that the owners would be ready to make fast decisions when the time comes," he said. "The preparation would be good to do in advance."

However, he pointed out that Finnair needed to keep a majority ownership in Finnish hands due to Finland's air traffic agreement with Russia. Finnair relies strongly on its Asian strategy which requires flights over Russia.

In the first quarter, foreign ownership in Finnair stood at around 11 percent, the company said.

British Airways owner IAG in November was reported to be in negotiations over a deal with Finnair, but all sides denied such talks.

The Finnish government is expected to outline its plans for several state-owned companies in the coming days.