Finnair has reported its revenue increased by five per cent year-on-year (YOY) in the first quarter (Q1) and the number of passengers reached a quarterly record.
For the quarter ending 31 March, the Helsinki-based carrier’s revenue was €672.9 million, up on the €641.1 million in Q1 last year. Comparable operating result was -€16.2 million euros (2018: €14.6 million). Operating result was -€17.6 million euros (€16.9 million).
In Q1, Finnair flew flew just over three million passengers while available seat kilometres (ASK) grew by 10.4 per cent, and the load factor was 78.3 per cent, a decrease of 4.6 percentage points on Q1 2018.
As for the future, the airline said it expects increased competition as capacity is added, particularly on routes linking Europe with Asia as well as in short-haul traffic.
The slowdown in the economy of Finnair’s key markets and the continued uncertainties surrounding global trade, including from Brexit, it added could impact the demand for air travel and cargo.
Finnair plans to increase its capacity by approximately 10 per cent in 2019, down from its 14.8 per cent capacity growth in 2018. This growth is mainly focused on the Asian market. Revenue is expected to grow at a somewhat slower pace than capacity in 2019.
Chief executive officer, Topi Manner said: “We grew our transfer traffic between Asia and Europe in particular, and our cargo performed well too.
“Despite this growth, our revenue growth fell short of our approximately 10 per cent capacity increase in this period, which was partly due to the two new A350 aircraft delivered at the end of last year and during the review period.
“We missed last year’s record result, as expected, and our comparable operating result totaled -16.2 million euros. The decline was impacted by an increase in volume driven operational costs and higher price of jet fuel.
“Increases in capacity put pressure on our unit revenues particularly in European and domestic traffic. On routes from Japan to Europe, and on the main North Atlantic routes, demand remained strong.
“The year started slowly in China, where demand slowed down compared to last year due to the slowdown in the country’s economic growth, the threat of a trade war, the longer than normal Chinese People’s Congress in March and our own changes in sales channel mix.
“Furthermore, the fact that Easter fell in April this year influenced the demand for passenger traffic to some extent in European and North-Atlantic traffic.”
Manner said a second new A350 aircraft scheduled for this year will enter service in the coming weeks, just in time for the seasonally stronger summer months.