Finnair has reported a strong second quarter, carrying 2.8 million customers and a passenger load factor of 76%, ending the quarter with an operating profit of €66.2 million.
The strong quarter was driven by continued strong travel demand and successful implementation of Finnair’s strategy. The company captured demand with its balanced network and was successful in its pricing and sales efforts. Also its cost control measures are bearing fruit. The net result for the period increased to €138.6 million, supported by the re-recognition of previously written-down deferred tax assets due to clearly improved profitability and an improved longer-term outlook of the company’s business.
Finnair has raised its guidance for comparable operating results for the full year 2023, as it expects the travel demand to continue stronger than previously anticipated, fuel price development has been more favourable than expected and as the company’s strategy implementation has progressed better than anticipated.
Contrary to the previous guidance, the company estimates that the comparable operating result will probably reach or even exceed the 2019 level (€162.8 million). In terms of 2023 revenue, Finnair still estimates that it will not yet reach the 2019 level (€3,097.7 million).
As a result of the improved profit outlook, Finnair’s strategic comparable operating profit margin target of at least five per cent from mid-2024 onwards would be reached 12–18 months earlier than anticipated. However, uncertainty in Finnair’s operating environment continues as the fuel price is still high and also since the end of the closure of Russian airspace is not in sight. In addition, the extent of the impacts of inflation and rising interest rates on demand and costs remains uncertain.
Finnair estimated in its guidance published on 27 April 2023 that its 2023 revenue will significantly increase and comparable operating result will significantly improve year-on-year, especially as the first half of 2022 was heavily burdened by both the pandemic and the closed Russian airspace. However, the company estimated that revenue and comparable operating result would not yet reach the level of 2019. (£1.00 = €1.15 at time of publication).
