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Finnair posts first quarterly profit since 2019

Stock Markets Oct 28, 2022 03:46AM ET
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© Reuters. FILE PHOTO: A Finnair Airbus A320-200 aircraft prepares to take off from Manchester Airport in Manchester, Britain September 4, 2018. REUTERS/Phil Noble

By Anne Kauranen

HELSINKI (Reuters) - Finland's national carrier Finnair on Friday reported its first positive quarterly operating profit since 2019 and said it expects strong demand to continue as it overhauls its strategy.

A triple blow from the COVID-19 pandemic, Russian airspace closure and high fuel prices has taken its toll on the airline, which announced a new strategy last month in order to return to profitability.

"A positive operating result in the seasonally strongest third quarter is a step to the right direction, but we have a long journey ahead of us to nurse the company back to health," Finnair's Chief Executive Topi Manner said.

Shares in the company were up around 5% in morning trade after the results.

Finnair began seeking new commercially-feasible routes after the closure of Russian airspace due to the war in Ukraine cut off its previously lucrative Asian connections via a short northern route.

The company expected demand to continue to be strong but significant uncertainty in its operating environment led it to cut its guidance for the use of its total capacity in the fourth quarter, to 80% from 80-85%, citing leases of aircraft to other airlines for the reason.

The airline reported a comparative quarterly operating profit of 35.2 million euros ($35.1 million) for the third quarter, compared to a 109.1 million euro loss a year earlier.

The net result for the period was still negative, a loss of 37.2 million euros, "due to high financial expenses resulting from heavy indebtedness and exchange losses caused by the strong dollar," Manner said in a statement.

Finnair said its operating profit was also burdened by the exceptionally high fuel price, the remaining effects of the pandemic including travel restrictions in China, as well as extended flight times and increased operating costs of their Asian routes due to the closure of Russian airspace.

Revenue increased by 261% in July-September from a year earlier to 719.2 million euros, the company said.

Finnair has said it is trying to build a geographically more balanced network by increasing cooperation with partner airlines as well as by adding more flights to India, the Middle East and North America via its home hub Helsinki.

($1 = 1.0021 euros)

Finnair posts first quarterly profit since 2019
 

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