Finnair lowers earnings outlook despite Q2 profit
HELSINKI (AP) — Finnair PLC has turned a second-quarter net profit of 17 million euros ($22.59) million amid increased traffic on its Asia and European routes, but lowered its earnings outlook, saying turnover this year was expected to be at 2012 levels.
The airline’s share price plunged, closing down almost 7 percent at 3.00 euros on the Helsinki Stock Exchange.
Finnair said Wednesday that overall revenue grew 2.6 percent in the period, to 610 million euros from 594 million euros in the same period in 2012. Last year, it posted a net loss of 19 million euros in the period.
Struggling with high costs and tough competition from budget airlines, Finnair has embarked on several cost-cutting programs in recent years with substantial job cuts, and said it would continue to target further savings of 60 million euros announced last October. This would be achieved by seeking “clear savings in personnel costs” and “the implementation of a more agile structure,” the national carrier said.
CEO Pekka Vauramo said he was “particularly pleased” that an earlier cost cutting program of 140 million euros by 2014 had already been achieved — six months ahead of schedule.
But Vauramo described the quarterly result as “disappointing” and cautioned that an uncertain economic outlook in Europe and lower-than-expected growth in Asia would hit air traffic on top of rising fuel costs.
Finnair, which is 56 percent government-owned, flies to about 50 destinations with a fleet of 65 aircraft. It employs some 6,000 people — down from 7,200 a year earlier.