Finnair on Tuesday sent its share value tumbling by announcing it expects soaring jet fuel prices to undermine its profitability in the second half of this year.
Helsingin Sanomat reported that the majority state-owned airline saw its shares lose 15 per cent of their value – to 7.14 euros – after it warned that its full-year result is not expected to improve from the 170 million euros posted last year.
Finnair said it revised its expectations for the year due to not only rising jet fuel prices but also intensifying competition on routes between Europe and Asia, and Europe and North America.
The airline also reported that its second-quarter revenue increased by 13 per cent year-on-year to 715 million euros and comparable operating result by 28 per cent to 47.9 million euros. Its first-half revenue, in turn, rose by 14 per cent to 1.35 billion euros and comparable operating result by 82 per cent to 51.8 million euros.
Pekka Vauramo, the chief executive of the flag carrier, reminded that overall the second quarter was good for Finnair.
“Our comparable operating result rose to 47.9 million euros, a new record for the period, in spite of the increase in jet fuel price. Our capacity grew broadly in line with our expectations, nearly twice as fast as the market as a whole,” he said in a press release.
The improved result, he added, indicates that the airline has succeeded in implementing its growth strategy.
“Demand followed our capacity growth fairly well in all traffic areas and our passenger load factor was at a good level. Passengers volumes increased particularly in Asian traffic,” said Vauramo. “We broke our monthly passenger records in May and June. Also travel services revenue developed well, whereas the growth of ancillary sales and cargo revenue was slower than we expected.”
Aleksi Teivainen – HT
Photo: Martti Kainulainen – Lehtikuva