Finnair's results so far this year have been heavily affected but the ongoing coronavirus COVID-19 pandemic. The airline has implemented a stringent cost-cutting regime as it struggles to improve its equity and cash position in order to survive into 2022.
Topi Manner continued "We also made good progress in achieving permanent cost reductions and have identified new savings opportunities. We are now increasing our target for permanent annual cost reductions to 140 million euros from the previous target of 100 million euros starting from the beginning of 2022, compared to 2019. We seek reductions in all cost categories. The post-pandemic market will be highly competitive, and we are preparing with these measures for the future market conditions.
We completed the co-determination negotiations on personnel reductions in Finland and the respective processes outside Finland. The resulting cut of approximately 700 jobs is very unfortunate and difficult for Finnair employees. All in all, including these measures, we will have almost 1,100 employees fewer at Finnair compared to the start of the year. We have developed a support programme called NEXT to support the re-employment of those who are losing their jobs.
The number of redundancies resulting from the co-determination process is slightly lower than our preliminary estimate, partly thanks to the agreements achieved with personnel on permanent and temporary cost savings. I want to take this opportunity to extend my warm thanks to the employee groups that contributed to the savings, for their flexibility and commitment to our common cause. In October, we announced an incentive plan that, if its targets are met, will reward the personnel groups who contributed to the permanent savings for the successful rebuild efforts.
Between February and September, we have paid over 400 million euros to customers in refunds for flights cancelled due to the COVID-19 situation. We have now worked through the backlog of refund requests and the processing times are close to normal. The anticipated refunds amount to 40 million euros, meaning a materially lesser burden on our operating cash flow going forward. We are also delighted that our Net Promoter Score, which measures customer satisfaction, was at a record-high level of 56 during the review period. Based on customer feedback, our customers have been particularly satisfied with the health and safety measures which have been our focus areas.
During the winter season, we will continue to operate a somewhat limited network, as the strict travel restrictions have had a significant impact on demand. In October, we launched a campaign in Finland on responsible travel. The campaign also underscores the significant economic and employment impact of the travel sector. The Finnish travel industry employs more than 140,000 people and the situation affects the future of these people and their employers.
Visibility on market development is now exceptionally limited. We have, however, as a part of our rebuild plan, developed agile processes that allow us to adapt our operations to the rapidly changing environment. Our industry needs harmonised Europe-wide travel standards and testing practices in order to enable both industry players and travelers to execute on their respective plans."
July–September 2020
- Earnings per share were -0.15 euros (0.08)*.
- Revenue decreased by 88.7% to 97.4 million euros (865.4).
- The comparable operating result was -167.0 million euros (100.7). The operating result was -183.1 million euros (94.9).
- Financial net expenses were 74.6 million euros (20.1) and they increased significantly, with c. 54 million euros of the increase related to jet fuel and foreign exchange hedging that was reclassified from other comprehensive income.
- Net cash flow from operating activities was -267.3 million euros (119.3) and net cash flow from investing activities was 21.6 million euros (-110.3).**
- The number of passengers decreased by 88.9% to 0.5 million (4.1).
- Available seat kilometres (ASK) decreased by 86.8%.
- Passenger load factor (PLF) was 38.7% (-47.5 points).
January–September 2020
- Earnings per share were -0.56 euros (0.06).
- Revenue decreased by 68.7% to 727.2 million euros (2,322.8).
- The comparable operating result was -432.4 million euros (131.7). The operating result was -449.9 million euros (125.3).
- Financial net expenses were 200.3 million euros (60.4) and they increased significantly, with c. 138 million euros of the increase related to jet fuel and foreign exchange hedging that was reclassified from other comprehensive income.
- Net cash flow from operating activities was -864.5 million euros (444.4) and net cash flow from investing activities was 216.4 million euros (-327.5).**
- The number of passengers decreased by 71.2% to 3.2 million (11.1).
- Available seat kilometres (ASK) decreased by 67.2%.
- Passenger load factor (PLF) was 66.6% (-15.9 points).
* Unless otherwise stated, comparisons and figures in parentheses refer to the comparison period, i.e. the same period last year.
** In Q3, net cash flow from investing activities includes 11.3 million euros of redemptions in money market funds or other financial assets maturing after more than three months. In Q1-Q3, these decreased in net terms by 382.6 million euros. These redemptions are part of the Group’s liquidity management.
