Finnair saw post-Covid pent-up demand largely dissipate during the second quarter of this year, hurting its profitability as unit revenues declined.
Outlining its earnings for the April-June period on 19 July, the Oneworld carrier said the ending of the demand bounce had combined with “low” consumer confidence, hitting travel demand and sending yields down compared with the “exceptionally strong” second quarter of 2023.
As a result, capacity up by 6.4% year on year yielded only a 0.2% rise in passenger revenue. That meant unit revenues were down 3.9% from the same period in 2023, although a 0.6% fall in unit costs helped to offset that to an extent.
Finnair’s passenger load factor fell from 76.3% a year ago to 74.7%.
“Pent-up demand after the Covid-19 pandemic has largely been released and consumer confidence has been low for a long time,” Finnair states.
“These are now being reflected also in travel demand, which is normalising after a period of strong demand during 2023.”
The 2.3% increase in Finnair’s overall revenue to €766 million ($833 million) during the second quarter was largely driven by higher ancillary and cargo revenues, the business says. Air cargo was benefitting for the disruption to Red Sea shipping routes, it adds.
Finnair’s comparable operating profit fell by a third year on year to €43.6 million, while its net profit was 87% lower at €17.9 million.
It is guiding for full-year revenue in the range of €3-3.2 billion.
Finnair forecasts that its full-year comparable EBIT will be within the range of €110-180 million.
