Closure of Russian airspace would have significant financial impacts on Finnair

posted on 28th February 2022 by Eddie Saunders
Closure of Russian airspace would have significant financial impacts on Finnair

The potential Russian airspace closure would notably impact air traffic between Europe and Asia, which plays an important role in Finnair’s network.

The negative financial impacts on Finnair will be significant especially if the situation prolongs.

Due to this, the company withdraws its guidance related to Q1 2022 and the operational environment in H2 2022, provided in connection with the Q4 2021 result.

“The crisis in Ukraine touches all Europeans, and we understand the EU’s decision to close its airspace”, Topi Manner, Finnair CEO, says.

“We are implementing our contingency plan as the situation has a considerable impact on Finnair.

“Bypassing the Russian airspace lengthens flight times to Asia considerably and, thus, the operation of most our passenger and cargo flights to Asia is not economically sustainable or competitive”.

Bookings in European and North American markets are clearly growing as the impacts of the pandemic are decreasing.

Finnair is currently preparing new traffic and cost savings plans in case the situation prolongs and will provide further information during the coming weeks.

“Despite the massive negative financial impacts that the pandemic had on us, our cash position is still strong, c. 1.7 billion euros at the end of 2021”, Manner says.

“This includes the currently undrawn 400-million-euro hybrid loan granted by the State of Finland, which also supports our equity.

“The State owner has stated that Finnair is a company of strategic interest.

“Under these new circumstances, we as a company feel that functioning flight connections are even more important for the Finnish economy, safety and security of supply.

“The company is considering different solutions in case the situation prolongs, and it has an active dialogue with the State of Finland.”