During the second quater of the year, the Finish national airline continued to operate a limited network, yet has started to see an increase in traffic as well as restarting some of its more popular routes. However, the carrier doesn't expect to head back in to positive territory until the end of 2021. Plus, due to the travel restrictions and incremental costs caused by the increased capacity, the airline warns, the comparable operating loss in Q3 2021 will be of a similar magnitude as in the five previous quarters despite the gradual increase in revenue.
CEO Topi Manner confirmed "The pandemic and related travel restrictions continued to heavily impact Finnair’s passenger numbers, revenue and result during the second quarter." The airline continued to operate a limited network, adding flights as demand evolved when European countries started to open for travel. In addition to the New York route opened in the spring, Finnair re-introduced long-haul USA services to Chicago and Los Angeles after a gap of more than a year.
Manner said: "Cargo demand remained strong due to the delivery chain challenges caused by the pandemic. We flew 522 cargo-only flights; cargo also supported adding more long-haul flights to our passenger network. Cargo continued to account for more than half of our revenue, even though passenger revenue surpassed cargo revenue again in June."
Finnair has been making further moves to secure a longer term finacial security by refinancing a 200-million-euro bond, doubling its size to 400 million euros. Because of this the airline maintains a healthy balance sheet and cash reserves.
In the latest results, Manner details how its cost cutting programme will continue into next year and beyond, which aims to achieve savings of around €200 million when compared to 2019 operational volumes. "We continue to strive for cost efficiency in all our operations, which is necessary in the highly competitive post-pandemic market."
Finnair is hopeful of increased demand and a more harmonised border requirements for fully vaccinated travellers. "We believe demand will increase gradually during the fall especially in Europe and North America, with Asian countries following some months behind. Vaccination coverage is now increasing at a good pace around the world, but the travel recovery continues to depend on the development of the pandemic situation, including virus variants, and the related travel restrictions. Although we estimate demand will gradually grow during the autumn, it will take at least until 2023 for the traffic volumes to return to the pre-pandemic levels.
Our traffic plan for the autumn and winter includes some 70 destinations. Our target is to utilise opportunities in the market and we will launch totally new long-haul flights from Stockholm to Florida and Thailand. These flights create jobs for some 270 Finns and strengthen our offering in the important Swedish market." Manner explains.
January – June 2021
- Earnings per share were -0.19 euros (-0.46).
- Revenue decreased by 64.2% to 225.4 million euros (629.8).
- Comparable operating result was -294.5 million euros (-265.4). Operating result was -288.2 million euros (-266.8).
- Net cash flow from operating activities was -177.0 million euros (-597.2), and net cash flow from investing activities was 19.0 million euros (194.8).**
- Number of passengers decreased by 80.0% to 0.6 million (2.8).
- ASK declined by 73.8%.
- PLF was 28.3% (71.3).
April – June 2021
- Earnings per share were -0.09 euros (-0.25)*.
- Revenue increased by 63.0% to 111.8 million euros (68.6).
- Comparable operating result was -151.3 million euros (-174.3). Operating result was -139.1 million euros (-171.2).
- Cash funds were 834.3 million euros (31 Dec 2020: 823.7) and equity ratio was 18.9 per cent (31 Dec 2020: 24.6).
- Net cash flow from operating activities was -59.3 million euros (-463.7), and net cash flow from investing activities was 13.8 million euros (262.1).**
- Number of passengers increased by 197.6% to 0.3 million (0.1).
- Available seat kilometres (ASK) increased by 311.6%.
- Passenger load factor (PLF) was 30.6% (33.1).
Finnair has a fleet of some 59 aircraft, both owned and leases and comprising of 24 wide-body aircraft and 35 narrow-body types. The average age of the fleet this year is 11.1 years and just because of the pandemi9c, the airlines fleet renewal plans continue. At the end of the second quarter, Finnair had sixteen A350 aircraft, which have been delivered between 2015–2020 and three A350 aircraft on order from Airbus of which the next delivery has been financed with a lease. These aircraft are scheduled to be delivered to Finnair in Q2 2022, Q4 2024 and Q1 2025.
Finnair’s investment commitments for property, plant and equipment, totalling 349.4 million euros, include the upcoming investments in the wide-body fleet. Finnair has the possibility to adjust the size of its fleet in line with demand forecasts through the staggered maturities of its lease agreements and changes in the number of owned aircraft.
Norra
Nordic Regional Airlines (Norra) operates a fleet of 24 aircraft for Finnair on a contract flying basis. All of the aircraft operated by Norra are leased from Finnair Aircraft Finance Oy.
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