In conjunction with its 2019 financial result publication on 7 February 2020, Finnair announced that the direct financial impact of coronavirus during Q1 2020 would be relatively limited, even if the mainland China cancellations continued until the end of Q1 2020. At that time, Finnair forecasted that its capacity would increase by approximately 4 per cent in 2020.
Due to the fast-developing situation with the coronavirus and its wider than originally estimated impact on the global aviation market, Finnair is now revising its financial outlook:
- Due to lower demand for air travel caused by the coronavirus situation, Finnair’s comparable operating result in Q1 2020 is expected to be lower compared to Q1 2019.
- Finnair currently estimates that the coronavirus situation will decrease demand resulting in a negative impact on revenue for Q2 2020. Based on the current demand estimate, Finnair’s comparable operating result will be significantly lower in Q2 2020 than in the corresponding period of 2019. Thus, Finnair expects a significantly lower comparable operating result in 2020 than in the previous financial year.
- Finnair withdraws its capacity guidance of approximately 4 per cent growth for 2020 and will adjust its network and capacity over the next months to fit the air travel demand. This will lead to a decrease in Finnair’s flight related costs, such as jet fuel, airport and other fees, in accordance with the capacity development.
- In addition to making changes to its capacity and network, Finnair is looking into adjusting its other costs to mitigate the negative financial impact. Finnair will evaluate how to adjust its costs by 40 – 50 million euros, with measures relating to personnel, sales and marketing activities, development initiatives and other projects. Evaluated personnel measures, if realised, may include for example temporary layoffs or similar measures involving all personnel, as well as recruitment adjustments.
“As the coronavirus situation has entered a new phase with outbreaks in several new countries, we will take appropriate measures to adapt our costs, operations and resources to better match our revenues,” says Topi Manner, Finnair’s CEO.
“While the spread of the coronavirus has had a limited impact on our operations so far, we now see a negative impact on demand. It is difficult to foresee how the situation will evolve during the coming months. At the same time, we strongly believe in our Asia-focus and strategy of sustainable, profitable growth. We are determined to continue on this long-term path despite these temporary adjustments.”