Finnair estimates it will not reach profitability in the second half of 2011. According to preliminary results the third quarter is profitable, but the current estimates indicate that the company’s fourth quarter results will be weaker than expected, and therefore the second half of 2011 is expected to be slightly negative. However, the company expects that the results of the second half of 2011 will be better than the results of the first half of the year. According to the earlier Finnair profit guidance the result for the second half of 2011 was expected to return to profit.
This change in financial outlook reflects that prebookings for business travel, especially in Finland, have been weaker than expected after the end of the European holiday season, and that those bookings are unlikely to pick up significantly during the fourth quarter due to current global economic uncertainty. In addition, the profitability of Finnair cargo traffic is declining, due to decreases in both prices and demand. Suntours, Finnair’s tour operator subsidiary, meanwhile continues to suffer from overcapacity in the industry.
