Finnair's Growth Tarnished by Ash and Strikes

Finnair Group’s turnover grew by 10% to 2,023 million euros in 2010.

The operational result was a loss of just under five million euros. Profitability, however, improved from the previous year's 170 million euro operational loss. The result before taxes was a loss of 33 million euros.

"Last year we witnessed much that was positive in the development of our operating environment. Due to efficiency measures, we were able to reap the benefit of improving demand and price levels as well as a tailwind provided by the strengthening of key sales currencies," said Finnair's President & CEO, Mika Vehviläinen.

Finnair's result includes an estimated 55 million euros profit weakening from the ash crisis and industrial action. Last year Finnair implemented many efficiency measures, which helped production costs to rise clearly more slowly than turnover. Cash flow from business operations strengthened by 180 million euros. Development was particularly positive in the Airline Business segment, whose turnover improved by around 200 million euros.

"Due to efficiency measures, profitability improved from the deep loss of the previous year, but it is still far from the company's financial targets. The final quarter, however, was adversely affected by an unfortunate labour dispute which, together with the ash crisis, undermined the progress made last year. Without this disruption, the final quarter performance would have been very strong and the full year profit-making," Vehviläinen added.

Passenger numbers were slightly over seven million, which is 4% fewer than in 2009. Finnair's total capacity declined by 3%. Carried load, on the other hand, grew by just under 8%.

One significant factor was strongly increased cargo traffic, which grew 38%. Cargo carried in the holds of Finnair aircraft and by cargo aircraft totalled 122 million kilos, most in traffic between Asia and Europe.

 This year, Finnair will have a total of 15 long-haul traffic aircraft, which is three more than last year. Asian traffic capacity will accordingly grow by more than 20%.

"Like a rally driver, we are therefore pressing the brake and accelerator at the same time. In this way, we can both improve our performance with efficiency measures and take advantage of growth opportunities in the operating environment, particularly in Asia-Europe traffic, which is our main strategy," said Vehviläinen.

The outlook for this year is positive. Turnover is expected to grow by more than 10%. The first quarter is expected to remain loss-making, while the result for full year is projected to be in profit.

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