LONDON – The aftershock from the COVID-19 pandemic and the ongoing Ukraine Crisis continues to bite into Finnair’s financial results.
Improvements have been made in some areas, but expenditure continues to be at a high level following the closure of Russian airspace.
Without further ado, let’s get into it…
Finnair’s Financial Figures…
Finnair Recovers From COVID-19…
Going into detail about Finnair’s current financial situation was CEO Topi Manner, who said the following in the recently released financial report:
“In 2022, Finnair’s business continued to recover from the COVID-19 pandemic, but at the same time,
we faced another crisis in the form of the war in Ukraine and the closure of Russian airspace.”
“The number of our passengers more than tripled year on year and was 9.1 million.”
“Our revenue increased to 2.4 billion euros (838.4 million euros), and comparable EBIT was -163.9 million euros.”
“However, our comparable operating result turned positive in the last two quarters, reflecting both the recovery in travel and the numerous actions we have taken to restore our profitability”.
“The year was characterized by Russia’s invasion of Ukraine and the subsequent closure of Russian airspace, as Russia responded to the sanctions imposed on it by closing its own airspace from European airlines.”
“For us, this meant a fundamental change in our operating environment, requiring active adjustment of operations and defining a completely new strategy.”
“At the beginning of the year, sickness absences caused by the Omicron variant caused changes to our flights.”
“At the same time, however, we were preparing for the removal of travel restrictions that had already started and the strong recovery of travel toward the summer season.”
“We trained our flight crews, who had been on long furloughs, and returned aircraft from long-term parking back into flight operations.”
“In February, we also revealed our 200-million-euro investment in long-haul cabins.”
“The all-new Business Class, the new Premium Economy travel class, and the renewed Economy Class are gradually rolled out to all our long-haul aircraft.”
Manner: Ukraine Crisis Caused Reassessment of Asian Traffic…
Manner expanded further into the ongoing Ukraine Crisis and what that meant for its Asian traffic, which was a big portion of Finnair’s business.
“Russia’s invasion of Ukraine in February quickly led to the closure of Russian airspace, which for us meant a reassessment of our entire Asian traffic.”
“We canceled most of our flights to Japan scheduled for the summer season, as avoiding the Russian airspace increases flight time to Japan by up to 40%.”
“Nonetheless, we continued to fly to Tokyo, Shanghai, and Seoul, supported by strong cargo demand.”
“Flights to Southeast Asia and India are less impacted by the airspace closure, and we continued to operate to Bangkok, Singapore, and Delhi as normal.”
“Due to the closure of Russian airspace, we redirected our network and entered into wet lease agreements with British Airways and Lufthansa Group’s Eurowings Discover.”
“The lease-outs made it possible to utilize idle aircraft and created work for c. 500 Finnair employees. We added flights to Delhi and started flights to Mumbai.”
“We also opened new routes to Seattle and Dallas in the US, both of which are home hubs for our partner airlines.”
“Through our partners, we gain distribution power, and at the same time, we can offer our customers comprehensive onward connections.”
More To Come From Finland’s Legacy Carrier…
Despite the absolute beating that Finnair has experienced over the last few years with Ukraine and COVID-19, they have come out the other side, still in a relative position.
Manner remains upbeat about this as he ended his statement in the financial document:
“We are proud of our long history, but our eyes are firmly on the future. Together we are building an even stronger Finnair that will provide Finns with connections to the world in the next hundred years”, referring to the fact that the carrier turns 100 this year.
With the carrier’s revenue increasing substantially, the next challenge is its operating expenses and how it can bring this down in 2023 post-COVID-19 and as the Ukraine Crisis continues.
Once they achieve this, then Finnair can go on to become a highly profitable airline once again.