In November 2023 Finnair executed a rights issue of €570 million. Thanks to the strengthened balance sheet and cash funds resulting from the rights issue, Finnair has now purchased six previously leased A321 aircraft from BOC Aviation. Finnair will spend in excess of €200 million on the transaction and its positive impact on both profit before taxes and cash flow will be in excess of €20 million per year over the next few years.
Finnair has also repaid an additional tranche of €120 million of its €600 million pension premium loan in December in addition to the previously planned €100 million instalment. The December instalment, including interest, totals approximately €230 million, after which the remaining loan amount is €280 million, to be repaid during May 2025 at the latest. The impact of the additional loan repayment of €120 million on profit before taxes will be approximately €3 million in 2024 in the form of lower-net-interest costs.
In connection with the rights issue announcement in autumn 2023, Finnair supplemented its financial targets, which were based on the assumption that e.g. the company’s cash to sales ratio would remain at 30% over time. As a result of the aircraft purchases and the loan repayment, Finnair’s cash to sales ratio is close to but still exceeds the target of 30%.
These measures are a part of Finnair’s strategy implementation and support reaching financial targets by the end of 2025. In addition, these measures will contribute to reaching Finnair’s target of reinstating shareholder distributions, based on the 2024 result, starting from spring 2025. (£1.00 = €1.15 at time of publication).