Speaking to reporters and analysts, Finnair president and CEO Mika Vehvilainen described the results as “quite satisfactory” and a “solid business performance,” noting this is Finnair’s first full-year profit since 2007.
Vehvilainen will leave the airline Feb. 28 to take a new position as CEO of Finnish cargo and load handling specialist Cargotec.
Revenue rose 8.5% to €2.4 billion and the airline delivered an operating profit of €44.9 million, reversing a €60.9 million operating loss from 2011.
Traffic rose 9.5% to 23.6 billion RPKs on a 3.5% increase in capacity to 30.4 billion ASKs, producing a load factor of 77.6%, up 4.3 percentage points.
Yield rose 0.9% to 7.3 cents as RASK rose 7.7% to 6.49 cents and CASK rose 2.3% to 6.58 cents. CASK ex-fuel was 4.5 cents, down 3.6%. Finnair’s fuel bill for the year was €90 million higher than 2011.
In 2011, Finnair set a €140 million cost-savings target with the aim of achieving €80 million in 2012. However, Vehvilainen said the airline achieved €100 million of savings in 2012, leaving it with only €40 million of the original target for 2013.
“We are very satisfied with the restructuring. Finnair today is much more focused as an airline,” Vehvilainen said, referring to the outsourcing of non-core functions such as the sub-contracting of regional flying to UK carrier Flybe.
Late last year, Finnair added another €60 million to its target. Vehvilainen said the airline is still “planning and preparing” the details of this latest tranche of savings. He added that it should meet the €60 million target by the end of 2015.
He said sustainable profitability is “absolutely necessary” for Finnair’s Airbus A350 investment, which is “vital for a competitive future.” Finnair’s long-term objective is a 6% margin.
Finnair is forecasting increased turnover in 2013, but at a “more moderate rate” compared to the last few years; it predicts another year of profit this year.
(Victoria Moores - ATWOnline News)