ATW Daily News

Finnair annual loss doubles to €102 million

Monday February 8, 2010

Finnair reported a 2009 net loss of €102 million ($142.2 million), more than double the €46.3 million loss it suffered in 2008, citing a "historically difficult year" in which demand and yield plunged.

President and CEO Mika Vehvilainen, who took over the carrier's helm on Feb. 1 (ATWOnline, Nov. 12, 2009), said last year "was made particularly difficult by a sharp fall in domestic demand as well as price competition due to overcapacity in the sector on many of our main routes. . .Costs could not be cut as quickly as revenue declined." He said international business and cargo traffic are showing signs of recovery, "but this is still subject to strong price pressure."

He warned that the early part of this year continues to be "difficult," noting that "domestic demand shows no signs of recovery." In addition to continuing to cut costs (the carrier initiated a program in 2008 to slash €200 million in annual costs, of which €150 million has been realized), it "must . . . make every effort to increase growth in demand, create new sources of revenue and improve average prices," Vehvilainen said.

Full-year revenue dropped 18.5% to €1.84 billion while operational expenses decreased 16.1% to €2.04 billion. Operating loss was reported as €180.2 million, more than triple an operating deficit of €52.1million in 2008. Traffic fell 9% to 19.94 billion RPKs on a 9.8% cut in capacity to 26.26 ASKs, producing a load factor of 75.9%, up 0.7 point. Unit revenue lowered 13.4%.

Fourth-quarter net loss was €36.6 million, narrowed from a €45 million deficit in the prior-year period, on a 20.9% dip in revenue to €457.7 million.

by Aaron Karp

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