Finnair forecasts growing competition on Asia and North American routes

posted on 16th February 2018 by Jordan Newton
Finnair forecasts growing competition on Asia and North American routes

Finnair expects global air traffic to grow strongly in 2018 and forecasts growing competition on routes as existing and new operators increase capacity – particularly on services linking Europe with Asia and with North America.

The carrier plans on increasing its capacity by more than 15 per cent in 2018, with most of this growth coming in the first half of the year and it expects passenger volume to grow broadly in line with capacity while revenue growth is expected to be slightly lower.

The outlook for next year came as it revealed its financial figures for 1 January to 31 December 2017 in which revenue increased by 10.9 per cent to €2.58 billion with passenger revenue up 11.3 per cent to €2.02 billion.

The overall comparable operating result was €170.4 million, up on the €55.2 million in 2016. The net result was €169.4 million, almost double the €85.1 million in 2016.

Asia made up €881.7 million of the passenger revenue (up 19.2 per cent), followed by Europe at €839 million (up 10.2 per cent), the North Atlantic €118.8 million (up 2.7 per cent) and domestic at €174.1 million (up 5.5 per cent).

The passenger load factor in 2017 was 83.3 per cent up on the 79.8 per cent in 2016 including 86.7 per cent on routes to Asia, 83.3 per cent to the North Atlantic, 80.7 per cent to Europe and 67.4 domestically.

At the end of 2017, Finnair itself operated 55 aircraft, of which 19 were wide-body and 36 narrow-body aircraft. According to the current delivery schedule, Finnair will receive the remaining eight A350 XWB aircraft during 2018–2022.

Finnair chief executive officer, Pekka Vauramo said: “The year 2017 was excellent for Finnair. The favourable business environment supported our growth together with the right capacity, route network and product decisions we made in recent years.

“We ended 2017 in the middle of the fastest growth phase in Finnair’s history and we plan to continue our transformation and growth also in 2018.

“Towards the end of the year, our route network was expanded by four new long-haul destinations, namely Goa, Havana, Puerto Plata and Puerto Vallarta. At the same time, we increased our flight frequency to several Asian and European destinations.

“We also invested heavily in our routes to Northern Finland by increasing our capacity between Helsinki and Northern Finland by more than 20 per cent for the current winter season and by introducing direct flights to Lapland from London, Paris and Zürich. Lapland is again the number one European destination for our Chinese customers this winter.

“Passenger demand on our route network remained strong from October to December, and we achieved a new passenger record during the period by carrying nearly three million passengers. The favorable development continued also in ancillary revenue, cargo and travel services. Our comparable operating result for the fourth quarter was a record high 22.9 million euros.”

Last year. Finnair completed the first phase of its long-haul fleet renewal, invested in digital services to enhance the customer experience and improve processes and opened a new Nordic Cargo COOL terminal.

Pekka Vauramo said: “The turnaround we have achieved in our operations and financial performance is a shared accomplishment by everyone at Finnair. We will continue these efforts and our other development efforts in 2018 to support our continued strong growth.”