The Finnair Group has reported that in the first six months of the year revenue was up, but its operating result was down while fuel costs spiralled.
For the period from 1 January to 30 June, the Helsinki-based carrier’s revenue increased by 7.8 per cent to €1,466.0 million (2018: €1,359.3).
Finnair reported that its comparable operating result was €31 million (2018: €73.7 million). Operating result was €30.3 million (2018: €67.7 million.
Fuel costs increased by €53 million (+19.4 per cent) of which the impact of fuel price was €19 million. Unit revenue (RASK) decreased by 4.3 per cent. Unit cost (CASK) decreased by one per cent.
Finnair flew 7.1 million passengers in the six months, nine per cent more than the same period last year on the back of expanding its route network. Available seat kilometres (ASK) grew by 12.7 per cent. The load factor was down 2.2 percentage points to 80.5 per cent.
In the second quarter (Q2) alone, revenue increased by 10.4 per cent to €793 million and comparable operating result was €47.2 million (2018: €59.1 million).
The airline flew 3.9 million passengers in Q2, 13.1 per cent more than the same quarter last year. ASK grew 14.8 per cent the load factor was 82.5 per cent, 0.1 percentage points down on the same quarter last year.
Finnair forecasts that global airline traffic is expected to continue growing in the latter half of 2019, but said the operating environment is expected to “remain volatile” in the second half of the year.
“The slowdown in the economies of Finnair’s key markets and the continued uncertainties surrounding global trade, including the US-China trade talks and Brexit, could impact the demand for air travel and for cargo,” the airline said.
Finnair raises its capacity forecast for 2019 owing mainly to its new service to Beijing Daxing International Airport. Finnair estimates that capacity growth in 2019 will be between 11-12 per cent. Revenue is expected to grow at a somewhat slower pace than capacity in 2019.
The airline added: “While the current outlook for Finnair’s seasonally strongest third quarter remains robust, we have started to see increased uncertainty especially in cargo demand. Finnair estimates that its comparable operating result will be between 4.5-6 per cent of revenue in 2019, assuming no material changes in fuel prices and exchange rates.”
Finnair chief executive officer, Topi Manner said: “Global uncertainties, such as Brexit and the US-China trade talks, and the gradual slowdown in the economies of Finnair’s key markets, were reflected in our Q2 performance. At the same time, capacity reductions in European traffic, especially on some Nordic routes, had a minor beneficial effect on the competitive situation.”
“Sustainable, profitable growth is our future goal. We will increase capacity in our key markets, either to implement our long-term Asian growth strategy or to exploit short-term tactical growth opportunities. In Asian traffic this can be seen, for example, in the openings of new connections in the second half of the year, and in Europe as route optimization,” he added.