Finnair is optimistic that the coronavirus outbreak in China is likely to have only a small impact on its first-quarter financial performance, even if mainland China flight cancellations continue until the end of March.
The airline says the direct impact is “relatively limited” but it has refrained from forecasting full-year revenues for 2020 until the outbreak situation becomes clearer.
It has disclosed that it is delaying delivery of an Airbus A350 by two months, and has cancelled all flights to China between 6-29 February. It is also cancelling flights to a number of Chinese cities during March, and says “some tactical changes” could be carried out on frequencies.
Finnair is aiming to increase capacity this year by 4%, a modest figure in comparison with the 11.3% for 2019.
Chief executive Topi Manner says the “volatile” year was characterised by an “unstable operating environment”, resulting from slower economic growth in its markets and “uncertainties” in global trade.
But he says the carrier experienced improvement in the fourth quarter and its European traffic situation has been particularly encouraging.
The airline’s full-year comparable operating profit reached €163 million against the previous figure of €218 million. Revenues rose by 9.2% to €3.1 billion.
Finnair says unit costs increased by 0.7% as a result of a €106 million hike in fuel expenditure, equating to 18%, of which €42 million was due to the impact of fuel prices.
It has previously disclosed plans to modernise its fleet further, notably its single-aisle jets, through an investment programme valued at €3.5-4 billion.
“This represents a significant step towards our long-term goal of carbon neutrality,” says Manner.
Finnair says it will initiate the modernisation over the period to 2025. ”As a result, the network and fleet will be further optimised,” it says. “Aircraft investments will be made to improve the narrowbody to widebody ratio, enabling better utilisation of the whole fleet.”
