SARS hits hard at Finnair's profitability

Finnair's result for the second quarter of this year is clearly negative and the airline stated the main reasons for this are the dramatic downturn in demand and the significant drop in price levels which are weakening profitability.

Finnair said that the continuing uncertainty of the global situation as well as the SARS epidemic afflicting Asia have kept air travel at historically low levels in the past months. Traffic results for May, which will be published on Wednesday, show that passenger numbers have plummeted especially in Asian traffic, which holds a significant position in Finnair's route network.

"We have cut capacity on the routes that have suffered the most, but load factors have still continued to weaken significantly in April-May. The effects of the SARS epidemic can also been seen in the second quarter. There is no indication of any kind of relief for the summer season," President and CEO Keijo Suila says.

Finnair launched a savings programme, which is aiming for 160 million euro in annual savings in the spring. As a part of the programme Finnair is cutting 1200 jobs the majority of which will be cut during the current year.

"A programme for immediate savings and structural changes was drawn up before the outbreak of SARS. The need for savings has certainly not decreased in the past months. If there are no new unpleasant surprises, a slow recovery of demand might begin in the autumn. The result for the whole year will nonetheless be negative, Suila says.