Already weakened by anti-Covid restrictions on its strategic destinations in Asia, Finnair further widened its losses in the first quarter. The closure of Russian airspace weighed heavily on the performance of the Finnish airline.
In the first three months of the year, Finnair suffered a loss of 212.8 million euros (215.62 million francs), compared to 145.4 million in the first quarter of 2021, the carrier said on Wednesday. Turnover has rebounded significantly over one year, tripling to 399.8 million euros, benefiting from favorable comparison effects compared to the first quarter last weighed down by the effects of Covid-19. But it has dipped compared to the last quarter of 2021.
The decision of the European Union (EU) to close its airspace to Russian planes following the invasion of Ukraine, subject to an identical reprisal from Moscow, has further complicated the task of Finnair, which has been chaining losses since the first quarter of 2020 due to the pandemic. The Finnish company, which specializes in Europe-Asia links via its Helsinki platform, had suspended its financial forecasts on February 28 due to the expected effect of sanctions linked to the war in Ukraine, which particularly affects it.
Connections to Asia, which usually fly over Russia, have been maintained but at the cost of a detour of several hours, generally by the north. Finnair is now ‘preparing for an extended closure of Russian airspace’, redirecting flights to the west or South Asia, as well as leasing some of its aircraft and crew from other airlines, says the group.
‘Travel restrictions in North Asia (Japan, South Korea and China), combined with the closure of Russian airspace, have a significant impact on Finnair’s scope of activity’, notes the group in its news forecast released Wednesday. The company forecasts a lower operating loss in the second quarter of 2022 than in the first, close to that of the last quarter of 2021 (-65 million euros), it indicates.
In the first quarter of 2022, Finnair suffered an operating loss of 164.9 million euros. For the third quarter, the company is less specific and only stresses that it expects demand to be “closer to its pre-pandemic levels in Europe, North America and South Asia”.
The only positive point is the good activity in freight, with cargo representing 30% of turnover in the first quarter, with 120 million euros in revenue. Majority-owned by the Finnish state, Finnair says it has “an active dialogue” with Helsinki on its future and that its cash flow is “still good” thanks to various public supports.
/ATS
