Finnair expecting losses to worsen in 2Q2010; business travel in Asia and Europe 'on the rise'
Finnair cautioned (28-Apr-2010) that its second quarter results are expected to be "clearly worse than the first quarter" ahead of an expected turnaround later in 2010. The carrier stated the 2Q2010 outlook is a result of direct revenue losses and extra costs caused by the volcanic ash cloud, as well as a temporary fall in the passenger load factor. Finnair added, "giving a reliable forecast in current circumstances is difficult". The carrier stated that it had begun to see signs of a slight recovery before the Icelandic volcanic ash cloud forced it to cancel more than 1,700 flights and 140,000 bookings, costing an estimated EUR20 million. CEO, Mika Vehvilainen, added the carrier will "continue to carry increasing passenger numbers because business travel in Asia and Europe is on the rise". The carrier added that most of its targets from its EUR200 million cost improvement have been recognised, with the majority of the programme implemented. Finnair reported a net loss of EUR21.8 million in 1Q2010 (compared to a net loss of EUR18.6 million in 1Q2009), with revenues decreasing 7% to EUR481.5 million. The carrier added that in Mar-2010, revenues increased for the first time since the global economic downturn began in 2008 with a 20% increase in overall demand, with passenger traffic of 1.8 million passengers (Asia traffic increased 10%).
Finnair: "The year began with a slight rise in demand. In March, scheduled traffic demand rose by 20 percent from the previous year. A good start to the spring was spoiled by the spread of the volcanic ash cloud over Europe ... There have already been clear signs of growth in markets outside Finland, particularly in Asian traffic. Compared with its competitors, Finnair has increased its market share in traffic between Asia and Europe ... We expect our profitability to improve towards the end of the year," Mika Vehvilainen, CEO. Source: Associated Press, 28-Apr-2010.