Finnair Group Interim Report 1 January – 31 March 2024
Finnair Plc Interim Report 23 April 2024 at 9.00 a.m. EEST
Yields and operating cash flow remained at a good level. Strikes had a negative impact on revenue and result
January – March 2024
- Revenue decreased by 1.9% to 681.5 million euros (694.7*).
- Unit cost (CASK) decreased by 4.3 per cent and totalled 7.77 cents (8.11).
- Comparable operating result was -11.6 million euros (0.9) and operating result was -17.2 million euros (8.3).
- Earnings per share were -0.15 euros (-0.09**).
- Cash funds were 981.0 million euros (31 Dec 2023: 922.0). The equity ratio was 15.3 per cent (31 Dec 2023: 15.6).
- Net cash flow from operating activities was 138.9 million euros (206.8), and net cash flow from investing activities was -25.9 million euros (-143.7).*** Gross capital expenditure totalled 43.4 million euros (80.0).
- Number of passengers decreased by 1.9 per cent to 2.5 million (2.6).
- Available seat kilometres (ASK) increased by 4.4 per cent to 8,922.9 million kilometres (8,550.2). When wet leases are included, ASKs increased by 3.5 per cent.
- Passenger load factor (PLF) decreased to 72.1 per cent (75.1).
* 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 Q1, net cash flow from investing activities included 6.5 million euros of redemptions (63.8 million euros on investments) in money market funds or other financial assets (maturity over three months). They are a part of the Group’s liquidity management.
Outlook
GUIDANCE issued ON 14 february 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 plans to increase its total capacity by more than 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 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 Q1 2024 interim report.
NEW GUIDANCE 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.
Interim CEO Jaakko Schildt:
Finnair carried 2.5 million passengers in January–March and revenue for the period totalled 681.5 million euros (694.7). The revenue decrease was driven by the political strikes in Finland, normalised revenue recognition related to expired tickets and lower cargo yields, despite higher ancillary and travel services revenue. On the other hand, operating expenses remained unchanged year-on-year due to a strict cost control and a lower fuel price even though capacity increased. Comparable operating result in the seasonally weakest quarter was -11.6 million euros (0.9).
Demand remained good in the quarter and customers booked trips especially for the upcoming summer season. As a result of the successful pricing, our yields remained strong despite a slight decrease year-on-year. Also our operating cash flow was at a good level.
The strikes in Finland and in Europe negatively affected our on-time performance during the quarter. Our on-time performance was also burdened by winter weather conditions, landing at 75 per cent (82).
A new era started in our Finnair Plus loyalty programme when it became spend-based and we adopted Avios as our loyalty currency. The ticket type changes carried out last summer have yielded results that are visible in our customer satisfaction, on-time performance and ancillary revenue figures. Our Net Promoter Score (NPS) measuring customer satisfaction remained at a good level at 34.
During the first quarter, our contribution to solving the climate challenge of aviation took an important step forward as we submitted our new climate target for validation to Science Based Targets initiative (SBTi). Finnair’s target is to reduce the emissions intensity from the aircraft we fly by 34.5 per cent through 2033 compared to 2023 baseline.
Finnair’s Annual General Meeting resolved on a reverse split in March. After the reverse split, every 100 old shares corresponds to one new share. The aim of the reverse split was to facilitate trading conditions and improve the price formation of the shares.
At the end of March, four A320 aircraft returned from wet lease outs to British Airways. At the same time, one of our A330 aircraft moved to operate Qantas flights between Bangkok and Sydney, based on a wet lease agreement.
The entire Finnair personnel is preparing for the seasonally busiest travelling period ahead. We have recruited summer workers especially in Finnair Kitchen and in airport customer service operations. The pilot and cabin crew recruitments done in 2023 also support operations in the summer. Our network includes 15 long-haul and almost 70 European destinations, with Wroclaw in Poland as the latest addition. I believe our strong offering matches well to the needs of our customers. Our committed personnel together with our partners takes care of a safe, smooth and pleasant customer experience.
Financial reporting in 2024
The publication dates of Finnair’s financial reports in 2024 are the following:
- Half-year Report for January–June 2024 on Friday 19 July 2024
- Interim Report for January–September 2024 on Tuesday 29 October 2024
This text is a summary of Finnair's Interim Report January – March 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 23 April 2024 at 11:00 a.m. 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/2024-04-23-media.
An English-language telephone conference and webcast will begin on 23 April 2024 at 1:00 p.m. Finnish time. To access the conference, kindly first register at https://palvelu.flik.fi/teleconference/?id=50048501. 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/q1-2024.
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
Further information:
Finnair communications, 358 9 818 4020, comms@finnair.com
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. Sustainability is at the heart of everything we do – Finnair intends to reach carbon neutrality latest by the end of 2045. Customers have chosen Finnair as the Best Airline in Northern Europe in the Skytrax Awards for 13 times in a row. Finnair is a member of the oneworld alliance. Finnair Plc’s shares are quoted on the Nasdaq Helsinki stock exchange.