According to preliminary results the third quarter is profitable, but the current estimates indicate that the company’s fourth quarter results will be weaker than expected, and therefore the second half of 2011 is expected to be slightly negative. However, the company expects that the results of the second half of 2011 will be better than the results of the first half of the year. According to the earlier Finnair profit guidance the result for the second half of 2011 was expected to return to profit.
This change in financial outlook reflects that prebookings for business travel, especially in Finland, have been weaker than expected after the end of the European holiday season, and that those bookings are unlikely to pick up significantly during the fourth quarter due to current global economic uncertainty. In addition, the profitability of Finnair cargo traffic is declining, due to decreases in both prices and demand. Suntours, Finnair’s tour operator subsidiary, meanwhile continues to suffer from overcapacity in the industry.
“The cost savings and structural change program we’ve started is even more crucial for us due to the weaker outlook for the rest of the year. Together with Finnair employees, we will turn over every stone to achieve those savings. Finnair is strongly committed to carrying out needed structural changes in addition to the more immediate cost savings necessary to improve financial performance,” says Finnair CEO Mika Vehviläinen.
Finnair continues to expect that its revenues will grow by more than 10 percent in 2011.
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