Helsinki: Finnair PLC said Friday that its third-quarter net profit fell by 55 per cent to €23.5 million (Dh86.2 million, $32.4 million) as currency fluctuations and tough competition continued to hamper the national carrier.
Confirmation of the profit fall from last year’s €52 million comes a day after the company warned that it will likely post an operational loss this year and that sales would also fall compared to 2012, mainly because of the uncertain economic climate in Europe and weaker growth in Asia.
A more detailed look at the third-quarter figures showed turnover down by more than 2 per cent to €637 million.
Finnair cautioned that fuel costs were expected to remain high in the last quarter and that demand for air traffic would only “grow moderately.” It gave no figures.
Struggling against tough competition from budget airlines, the Finnish airline has embarked on several cost-cutting programmes, including slashing its workforce by than 1,000 employees to some 5,900 at the end of September.
Total target
CEO Pekka Vauramo described the result as “disappointing” in a quarter that is traditionally Finnair’s strongest, and added that in the “prevailing tight competitive situation” further cuts were necessary. Finnair said it had cut annual costs by €150 million by the end of September of a total target of €200 million set in 2011
“In this situation the full implementation of our structural change and cost-reduction programmes is absolutely essential for securing Finnair’s future vitality and achieving profitable growth,” he said.
Finnair’s share price was up 2.5 per cent to €2.83 in Helsinki. But that’s only a small bounceback from Thursday’s 11 per cent fall following the warning.
