Finnair Swings To Profit On Increased Traffic

Finnair reported its second quarter results on Thursday, showing a swing to profit as it carried a record number of passengers.

For its second quarter to end June Finnair made a EUR€66.8 million (USD$77.7 million) net profit, from a €1.1 million loss in the previous year period. Revenue was up 11.2 percent to €633.4 million as the Helsinki-based carrier carried just over 3 million passengers, a 10.5 percent rise.

“In the second quarter, Finnair carried a quarterly record number of passengers,” chief executive Pekka Vauramo said. “Sales grew particularly due to the solid demand for the backbone of our network, traffic between Asia and Europe.”

Finnair flies to 18 destinations in Asia and over 70 in Europe.

Costs rose by 5.2 percent in the quarter to €614.6 million as higher staff numbers added to the total. Fuel costs, in contrast, dropped by 9.4 percent to €114.4 million, with hedging and the introduction of more fuel efficient Airbus A350 aircraft helping.

Passenger traffic in revenue passenger km (ASK) jumped 15.5 percent, with unit revenue rising by a more modest 4.1 percent. Available seat km (ASK) capacity rose 6.8 percent and unit costs (CASK) edged down 1.6 percent. Load factor showed a 6.3 percentage point increase to 83.7 percent.

Ticket revenue rose by 11.1 percent to €509.2 million, with Asia routes revenue up 21.4 percent and Europe up 13.3 percent.

“On the back of solid demand, our passenger load factor rose considerably in the second quarter, and ticket prices held up well,” CEO Vauramo said.

Looking forward, Finnair said demand outlook for passenger and cargo traffic continues to involve uncertainty. It reiterated previous guidance that capacity will grow by 8–10 percent, with full-year revenue expected to grow approximately in line with capacity. The operating result for 2017 is expected to broadly double year-on-year.