ATW Daily News

Finnair reports 61% third-quarter profit decline, promises job cuts, outsourcing

Wednesday November 8, 2006

Finnair reported a third-quarter net profit of €10.3 million ($13.1 million), narrowed 61% from net income of €26.4 million in the year-ago quarter, and said it will cut jobs and outsource "some operations" in an effort to lower operating expenses.

President and CEO Jukka Hienonen said the results were "lackluster and reflect the entire year's financial performance." The carrier said it will earn a profit for the full year, "but clearly below the previous year's level." It posted full-year 2005 net income of €61.4 million. It cited a 31.9% rise in fuel costs to €105.1 million as a key reason for the disappointing third-quarter results.

Hienonen said "structural changes" will be implemented to ensure stronger earnings. "During this year and next, personnel numbers will be cut in support functions and some operations will be outsourced and restructured," he said. Specifically, 670 administrative and support function jobs will be eliminated. The carrier also said its "priority is adapting operations expressly to the needs of Asia-Europe traffic," which grew 29.2% in the first nine months to 4.52 billion RPKs, higher even than its inter-Europe traffic.

Third-quarter revenues increased 7.2% to €521.1 million while operating costs rose 11.6% to €506.4 million, producing an operating profit of €14.7 million, down 54.2% from €32.1 million in the year-ago quarter.

Nine-month traffic was up 8.3% to 13.55 billion RPKs on a 3.9% rise in capacity to 17.8 billion ASKs, producing a load factor of 76.1%.

by Aaron Karp

Other headlines:

Sponsored Links