Finnair: back in profit and set to reap benefits of A350-led fleet upgrade and labour productivity

Finnair returned to profit in 2015, thanks in no small part to lower fuel prices. This was only its third positive result since before the global financial crisis, and it continues to lag the industry in its profitability. Nevertheless, its returns to profit and to both capacity and revenue growth are important markers on its financial progress. Perhaps more significantly, in a sector accustomed to thin margins where liquidity and balance sheet strength are vital, Finnair has moved into a net cash position.

However, Finnair's revenue was still below where it was in 2013, and its operational margin lagged far behind the rest of the global airline industry, which was collectively reaching an estimated new peak margin in 2015.

Finnair's return to profit and revenue growth is welcome, but it still has much to do. CEO Pekka Vauramo recognises this, saying, "we will now look to accelerate our profitable growth". Strong labour productivity improvements in recent years have provided a good basis for this. Finnair's fleet improvement programme, led by A350 deliveries that started in 2015 and will continue to 2023, should also be beneficial.