Finnair back in the black

Finnair's result excluding capital gains improved to 5.3 million euros in the third quarter from last year's 1.9 million euros loss. Turnover fell by 4.8 per cent to 385.2 million euros. Despite the growth in demand, the result for the whole year is expected to be clearly in the red.

Unit revenues on flight operations declined by 6.8 per cent and unit costs by 10.8 per cent. 

"In the third quarter we were able to inch the result into the black, even though turnover was trailing in the red," says Finnair President and CEO Keijo Suila.

The second quarter collapse in demand and load factors stabilized during the late summer and the gradual recovery has continued during the third quarter. Better success than expected was achieved in selling Finnair's increased Asian capacity. 

"Both the existing traffic figures for the first autumn months as well as the pre-bookings indicate that demand for Finnair is clearly on the rise. The popularity of our new pricing structure launched in September shows that we have successfully answered market demand. I am particularly pleased that demand for our Asian routes continues to grow strongly," Suila says.

The result before taxes was 6.8 million euros when last year it was 18.8 million euros. The result includes 2.1 million euros worth of capital gains. Last year capital gains for the same period were tenfold, hence an improvement in the operational result.

The Group's operating costs fell by 7.1 per cent. The Group's 160 million euro cost-cutting programme is going ahead on schedule. The weaker US dollar also contributed to the decline in operating costs. The Group has clearly more dollar-denominated costs than revenues.

"We are very aware that price levels in air traffic are still plunging. Our challenge in the future continues to be the determined lowering of unit costs. The development of operating structures and following through with our  efficiency programme are more important internal priorities than ever. The result for the whole year will be dismal, but the measures we have taken set the premise for a clear improvement in the result for 2004," President and CEO Keijo Suila states.

The Swedish airline Nordic Airlink, of which Finnair will acquire 85 per cent, has been expanding its operations in Scandinavia over the course of the autumn. The company has made important launches on the Stockholm-Oslo and Stockholm-Copenhagen routes. In Sweden, the airline operates between Stockholm and Luleå.