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Finnair Group Half-year Report 1 January – 30 June 2024

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Finnair Plc             Half-year Report            19 July 2024 at 9:00 a.m. EEST

Normalising market after a period of strong demand decreased unit revenue and results

April – June 2024                                          

  • Revenue increased by 2.3 per cent to 766.1 million euros (749.2*).
  • Unit revenue (RASK) decreased by 3.9 per cent and totalled 7.82 cents (8.13).
  • Unit cost (CASK) decreased by 0.6 per cent and totalled 7.37 cents (7.41).
  • Comparable operating result was 43.6 million euros (66.2) and operating result was 42.5 million euros (65.8).
  • Earnings per share were 0.09 euros (1.52**).
  • Cash funds were 966.3 million euros (31 Dec 2023: 922.0). The equity ratio was 16.1 per cent (31 Dec 2023: 15.6).
  • Net cash flow from operating activities was 173.1 million euros (175.8), and net cash flow from investing activities was -41.6 million euros (-187.7).*** Gross capital expenditure totalled 49.8 million euros (62.5).
  • Number of passengers increased by 5.4 per cent to 3.0 million (2.8).
  • Available seat kilometres (ASK) increased by 6.4 per cent to 9,799.9 million kilometres (9,212.8).  When wet leases are included, ASKs increased by 8.4 per cent.
  • Passenger load factor (PLF) decreased to 74.7 per cent (76.3).

January – June 2024                                    

  • Revenue increased by 0.3 per cent to 1,447.6 million euros (1,443.9*).
  • Unit revenue (RASK) decreased by 4.9 per cent and totalled 7.73 cents (8.13).
  • Unit cost (CASK) decreased by 2.5 per cent and totalled 7.56 cents (7.75).
  • Comparable operating result was 32.0 million euros (67.1) and operating result was 25.3 million euros (74.1).
  • Earnings per share were -0.06 euros (1.43**).
  • Net cash flow from operating activities was 312.0 million euros (382.6), and net cash flow from investing activities was -67.5 million euros (-331.4).*** Gross capital expenditure totalled 93.1 million euros (142.5).
  • Number of passengers increased by 1.9 per cent to 5.5 million (5.4).
  • Available seat kilometres (ASK) increased by 5.4 per cent to 18,722.8 million kilometres (17,763.0).  When wet leases are included, ASKs increased by 6.0 per cent.
  • Passenger load factor (PLF) decreased to 73.5 per cent (75.7).

*     Unless otherwise stated, comparisons and figures in parentheses refer to the comparison period, i.e., the same period last year.

**   A rights issue was implemented in November 2023 and, thus, the comparison period figure has been restated accordingly. On 20 March 2024, Finnair executed a reverse split, i.e. the reduction of the number of shares where every 100 old shares in the company corresponds to one new share.

*** In Q2, net cash flow from investing activities included 5.9 million euros of investments (128.1 million euros of investments) in money market funds or other financial assets (maturity over three months). In H1, the redemptions totalled 0.6 million euros (191.9 million euros of investments). They are a part of the Group’s liquidity management.

Outlook

GUIDANCE issued ON 23 April 2024:

Global air traffic is expected to continue growing in 2024. However, risks related to the impact of inflation and higher interest rates on demand and costs remain elevated, causing uncertainty in the operating environment. International conflicts and global political instability also cause uncertainty in the operating environment. These factors may affect the demand for air travel and cargo.

Finnair updates its guidance and now plans to increase its total capacity, measured by ASKs, by c. 10 per cent in 2024. The capacity estimate includes the agreed wet leases. This growth will mainly focus on Asia and Europe. Finnair’s revenue is now expected to grow at a slower pace than capacity in 2024. In its previous guidance, Finnair planned to increase its capacity by more than 10 per cent and its revenue was expected to grow at a somewhat slower pace than capacity in 2024.

In accordance with its disclosure policy, Finnair provides full-year comparable EBIT estimate in connection with the half-year report in July.

Finnair will update its outlook and guidance in connection with the 2024 half-year report.

NEW GUIDANCE ON 19 july 2024:

Global air traffic is expected to continue growing in 2024. However, risks related to the impact of inflation and higher interest rates on demand and costs remain elevated, causing uncertainty in the operating environment. International conflicts and global political instability also cause uncertainty in the operating environment. These factors may affect the demand for air travel and cargo.

Finnair reiterates its previous guidance and plans to increase its total capacity, measured by ASKs, by c. 10 per cent in 2024. The capacity estimate includes the agreed wet leases. This growth will mainly focus on Asia and Europe.

Finnair now estimates that its revenue in 2024 will be within the range of 3.0–3.2 billion euros. The company also estimates that its comparable EBIT will be within the range of 110–180 million euros in 2024.

Finnair will update its outlook and guidance in connection with the 2024 third quarter interim report published in October.

CEO Turkka Kuusisto:

We carried 3.0 million passengers in April–June and revenue for the period increased by 2.3 per cent driven by higher ancillary and cargo revenue. Comparable operating result amounted to 43.6 million euros (66.2). The decrease was caused by lower yields and passenger load factor in the quarter. Our operating cash flow remained strong and financial position improved supported by refinancing actions during the quarter.

Runway renovation at Helsinki Airport in April–June impacted negatively our on-time performance and increased costs in the form of re-routing customers to their connecting flights. Our on-time performance was 76.0 per cent (84.9). On-time performance was also affected by challenging weather conditions that delayed flights and increased our costs.

Pent-up demand after the COVID-19 pandemic has largely been released and consumer confidence has been low for a long time. These are now being reflected also in travel demand, which is normalising after a period of strong demand during 2023. Based on the strong demand in 2023, we increased our Available Seat Kilometres (ASK) for 2024 by improving aircraft utilisation and by deploying aircraft that returned from British Airways wet lease outs into our own use. As travel demand is normalising, the capacity increase has not yet increased our revenues accordingly, and our passenger load factor was 74.7 per cent (76.3). Continuous capacity optimisation is a normal part of traffic planning and we continue to work every day to optimise our network and schedules.

We successfully completed the rollout of our new long-haul cabins. This project included the launch of an entirely new Business class seat, introduction of a brand-new Premium Economy travel class, and a refreshed Economy class. After the renewal, we can offer a consistent onboard experience on our long-haul routes. Finnair’s Net Promoter Score (NPS) measuring customer satisfaction was at 39, and air travellers voted Finnair the best airline in Northern Europe at the Skytrax World Airline Awards, for the 14th time in a row. We are grateful to our customers for this recognition. Our investments in customer experience continued as our new, larger Schengen lounge was opened at Helsinki Airport in July.

Based on my first months as Finnair CEO, I can state that after the heavily loss-making pandemic years, Finnair’s team has made right choices in order to increase revenues and manage costs to restore the company’s profitability and take advantage of the opportunities offered by the market. However, as 2023 was exceptionally strong for air travel, and travel demand is now normalising, it is clear that we need to continue our systematic efforts to improve productivity.

During the period, we continued to strengthen our balance sheet by issuing a 500-million-euro unsecured senior bond to refinance our 400-million-euro bond, among other things. S&P Global Ratings assigned a long-term issuer credit rating of BB+ to Finnair Plc. This is the first credit rating for Finnair, enabling deeper funding sources from the debt capital markets and increasing the execution certainty of financing transactions as demonstrated by the successful bond issue.

Systematic work towards our long-term financial targets continues. Our priorities are now to continuously improve competitiveness and profitability, as well as to take care of our cash flow and balance sheet, without forgetting growth. As part of this, we continue our efforts to continuously improve customer experience by utilising data and customer understanding.

During my first months with the company, I have met hundreds of Finnair employees and committed and competent personnel are our absolute strength, and they are in a key role in achieving our targets. Working together, we take care of customers, flight safety and punctual operations every day. I would like to thank all our employees for their committed work. A warm thank you also to all our customers who trust us with implementation of their important travel plans.

Financial reporting in 2024

The publication dates of Finnair’s financial reports in 2024 are the following:

  • Interim Report for January–September 2024 on Tuesday 29 October 2024

This text is a summary of Finnair's Half-year Report January – June 2024. The full report is available as an attachment to this report.

FINNAIR PLC
Board of Directors

Briefings

Finnair will hold a results press conference (in Finnish) on 19 July 2024 at 11:00 a.m. Finnish time at its office at Tietotie 9 in Vantaa. It is also possible to participate in the press conference via a live webcast at https://finnairgroup.videosync.fi/2024-07-19-media/.

An English-language telephone conference and webcast will begin on 19 July 2024 at 1:00 p.m. Finnish time. To access the conference, kindly first register at https://palvelu.flik.fi/teleconference/?id=50048502. After the registration, you will be provided with phone numbers and a conference ID. To join the live webcast, please register at https://finnairgroup.videosync.fi/q2-2024.

For further information, please contact:

Chief Financial Officer Kristian Pullola, tel. +358 9 818 4960, kristian.pullola@finnair.com

Head of Investor Relations Erkka Salonen, tel. +358 9 818 5101, erkka.salonen@finnair.com

FINNAIR PLC

Distribution:
NASDAQ OMX Helsinki
Principal media

Finnair is a network airline, specialising in connecting passenger and cargo traffic between Asia, the Middle East, North America and Europe. Finnair is the only airline with year-round direct flights to Lapland. Customers have chosen Finnair as the Best Airline in Northern Europe in the Skytrax Awards for 14 times in a row. Finnair is a member of the oneworld alliance. Finnair Plc’s shares are quoted on the Nasdaq Helsinki stock exchange. 

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