It was the Omicron variant that weakened demand for Finnair during January and February of this year, which saw revenues fall daramtically. Towards the end of February, as a result of the war in Ukraine, sanctions and countersanctions were enacted and the Russian airspace closure caused a massive rethink of the airlines Asia and beyond route schedule. The negative financial impacts the airline feels because of this will be significant for as long as the situation continues.
Revenue increased by 252.1% to 399.8 million euros.Comparable operating result was -132.9 million euros. Operating result was -164.9 million euros.Cash funds were 1,136.5 million euros and the equity ratio was 7.2 per cent.Net cash flow from operating activities was 35.4 million euros and net cash flow from investing activities was -23.7 million euros.Number of passengers increased by 482.0% to 1.5 million.Passenger load factor (PLF) was 47.3% (25.5).
The airline has issued new guidance as a result of the ongoing situation.
In Europe, the United States and South Asia*, travel is normalising as the impacts of the pandemic have eased. In contrast, travel restrictions in North Asia**, combined with the closed Russian airspace, have a significant impact on Finnair’s operating environment.
Finnair estimates that during the summer season in Q2 and Q3 2022, it will operate an average capacity of around 70%t, as measured in ASKs, compared to the corresponding period in 2019. With the leases of aircraft with crew to other airlines that have now been agreed for the summer season, the total capacity deployed would be almost 80%.
Finnair estimates that the comparable operating result in Q2 2022 will improve from Q1 2022 and be of a similar magnitude as in Q4 2021 (-65 million euros) supported by the strong rebound of demand in Finnair network yet burdened by the significant increase in fuel price and the continuing low level of North Asian traffic.
* India, Singapore and Thailand
** Japan, South Korea and China
Finnair Fleet
Finnair’s fleet is managed by Finnair Aircraft Finance Oy, a wholly-owned subsidiary of Finnair. At the end of March, Finnair itself had 58 aircraft, of which 25 were wide-body and 33 narrow-body aircraft. During the first quarter, Finnair also completed the sale of two Airbus A321 aircraft and after the period, it sold two more A321 aircraft. During the first quarter, Finnair also purchased one Airbus A330, which was already accounted for as owned, as the finance lease period ended.
At the end of March, Finnair had seventeen A350 aircraft, which have been delivered between 2015–2021, and two A350 aircraft on order from Airbus. These aircraft are scheduled to be delivered to Finnair in Q4 2024 and Q1 2025. Finnair’s investment commitments for property, plant and equipment, totalling 364.3 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.
Nordic Regional Airlines (Norra) operates a fleet of 24 aircraft for Finnair on a contract flying basis. All the aircraft operated by Norra are leased from Finnair Aircraft Finance Oy.
Full report is available here. Finnair Group Interim Report 1 January – 31 March 2022
.
Want me in your inbox? Follow here for email updates Air101 here.