2011-08-05 08:00:00 CEST
2011-08-05 08:00:13 CEST
REGULATED INFORMATION
Finnair Oyj - Interim report (Q1 and Q3)
FINNAIR GROUP INTERIM REPORT JANUARY 1 - JUNE 30, 2011
Turnover up 13.9%, operating result -25.2 million euros in Q2
Finnair initiates companywide structure and cost savings analysis targeting 140
million euro cut in cost base by the year 2014
Finnair Plc. Interim Report August 5, 2011 AT 0900
Key Figures
-----------
Q2 Q2 Change H1 2011 H1 Change
2011 2010 % 2010 %
Turnover and result
--------------------------------------------------------------------------------
Turnover EUR 539.4 473.5 13.9 1 073.1 955.0 12.4
millio
n
--------------------------------------------------------------------------------
EBITDAR EUR 33.8 32.5 4.0 37.4 52.5 -28.8
millio
n
Operational result, EUR -13.8 -13.6 1.5 -56.9 -39.9 42.6
EBIT millio
n
Operational result, % % -2.6 -2.9 -5.3 -4.2
turnover
Operating result, EBIT EUR -25.2 -33.3 -24.3 -68.3 -59.2 15.4
millio
n
Result before taxes EUR -30.2 -37.9 -20.3 -76.4 -67.3 13.5
millio
n
Net result EUR -23.0 -27.8 -17.3 -56.8 -49.5 14.7
millio
n
Balance sheet and cash
flow
--------------------------------------------------------------------------------
Equity ratio % 32.9 32.2
--------------------------------------------------------------------------------
Gearing % 24.0 36.1
Adjusted gearing % 78.7 98.1
Capital expenditure, EUR 30.9 74.8 -58.7 61.8 143.5 -56.9
CAPEX millio
n
Return on capital % -3.4 -7.8
employed, ROCE 12
months rolling
Return on equity, ROE , % -7.9 -13.7
12 months rolling
Net cash flow from EUR 90.1 19.5 52.1 1.6
operating activities millio
n
--------------------------------------------------------------------------------
Share
--------------------------------------------------------------------------------
Share price at end of EUR 3.57 4.00 -10.8
quarter
--------------------------------------------------------------------------------
Earnings per share EUR -0.20 -0.23 -13.0 -0.48 -0.42 14.3
Traffic data, unit
costs and revenue
--------------------------------------------------------------------------------
Passengers 1,000 2 040 1 679 21.5 3 925 3 520 11.5
--------------------------------------------------------------------------------
Available seat millio 7 151 5 910 21.0 14 505 12 472 16.3
kilometres, ASK n
Revenue passenger millio 5 117 4 336 18.0 10 456 9 584 9.1
kilometres, RPK n
Passenger load factor, % 71.6 73.4 -1.8 72.1 76.9 -4.8
PLF
Unit revenue per cents/ 6.0 6.3 -4.3 5.8 5.9 -2.7
available seat ASK
kilometre, RASK
Unit revenue per cents/ 7.4 7.4 0.2 7.1 6.8 4.3
revenue passenger ASK
kilometre, yield
Unit cost per available cents/ 6.4 6.9 -7.6 6.4 6.6 -3.8
seat kilometre, CASK ASK
CASK excluding fuel cents/ 4.6 5.2 -11.6 4.66 5.0 -7.1
ASK
Available tonne millio 1 080 889 21.5 2 213 1829 21.0
kilometres, ATK n
Revenue tonne millio 660 569 16.1 1 348 1 186 13.7
kilometres, RTK n
Cargo and mail tonnes 32 696 29 577 10.5 67 142 54 534 23.1
Cargo traffic unit cents/ 28.5 26.8 6.2 27.4 25.4 7.8
revenue per tonne RTK
kilometre
Overall load factor % 61.1 64.0 -2.8 60.9 64.8 -3.9
Flights
Personnel
--------------------------------------------------------------------------------
Average number of 7 519 7 621 -1.3
employees
--------------------------------------------------------------------------------
Finnair CEO Mika Vehviläinen on Q2 2011
“In the second quarter, our traffic grew in Finnair's most important markets,
and business travel demand developed favourably. In line with our Europe-Asia
strategy, we continue to invest in long-haul routes, and the start-up of the
daily Singapore route that opened in May has been encouraging. In the final
hours of the quarter, we signed an agreement on the acquisition of Finnish
Commuter Airlines with our partner Flybe. I believe that Flybe's regional
aviation expertise and Finnair's local knowledge and network operator
experience will be a winning combination. The new company creates a
cost-efficient platform for building a successful regional airline.
Our profitability has not matched expectations, even though our costs,
excluding fuel, have developed according to plan. Our industry has changed
radically during the last couple of years: increased competition, new service
innovations and more efficient business models have entered the market.
Temporary disruptions caused by events in Japan and the Middle East as well as
a substantial increase in the oil price have naturally contributed to the
weakening of financial performance. Especially the Japanese natural disaster
had a significant impact on our result in the second quarter.
The situation faced by our mainline business, particularly European feeder
traffic, is challenging. In the long term, our cost structure compared with
many of our competitors is simply unsustainable. In order to build a
sustainable future Finnair, we must improve our operational efficiency. We are
now therefore seeking a permanent reduction of 140 million euros in our cost
level by the year 2014. We will begin the planning of these savings and
initiate discussions with personnel group representatives.
It's clear that performance improvement of this magnitude will require new
thinking, a significant change in ways of working and operational structures as
well as dissection of all cost items. Our structures and ways of working are
based on a legacy from a different era and no longer work in our current
environment. As reported earlier, we are aiming to find a new operating
structure in our Catering business in cooperation with an industry partner.
Similarly, we must explore possible structural changes in other areas with an
open mind. We will also have to analyse various structural solutions with
respect to flight operations, particularly in European traffic.
At the same time, our goal is not only to cut costs, but to grow and to improve
our financial performance sustainably. We aim to double our turnover in Asian
traffic by 2020. We are continuously analysing new opportunities in Asia to
strengthen the cornerstone of our strategy. Next year, we will become the first
European airline to open a route to China's largest city Chongqing, which is
investing strongly in industry, international trade and tourism. Finnair is
also focusing on customer service and the fluency of traffic flow at
Helsinki-Vantaa, which is the key gateway for our Asian and European traffic.
Our service excellence received recognition when The World Airline Awards named
Finnair the Best Airline in Northern Europe 2011 in connection with the Paris
Air Show.
In addition to traffic growth, we are also developing opportunities in order to
increase ancillary sales to deliver added value to our customers. Due to Asian
economic growth, our cargo business is also presenting us with new growth
opportunities, which we will seek to exploit in line with our ambitious
targets.
I believe that our strategy gives us a strong foundation for building a new
Finnair with our personnel and partners. We will share our future plans in the
coming weeks and months as planning work proceeds in our business units. Our
objective is clear: we want to create a profitable Finnair which is able to
invest in its future.”
Business environment and development of Finnair's flight operations
The strong growth in demand evident in the first quarter levelled off in the
second quarter due to the continued high price of oil, the uncertain
macroeconomic situation, and events in Japan, the Middle East and North Africa.
Finnair was able to exploit the situation by increasing its market share in
traffic between Europe and Asia; the company is now the third largest airline
in the markets served by the company, as measured in revenue passenger
kilometres (RPK). Finnair has increased its capacity in Asian traffic in
accordance with its strategy: in May, the company began daily direct flights to
Singapore. The route has made an encouraging start.
Business travel and business class demand developed positively, but euro market
uncertainty, weakness of demand in travel to Japan, and unrest in the Middle
East and North Africa impacted negatively on the development of unit revenue
(RASK), which fell by 4.3%.
Excluding fuel, Finnair's costs have developed according to expectations. Fuel
hedging gains were 24 million euros in April-June and 36 million euros for the
first half. According to the Finnair hedging policy, the degree of hedging in
July-September is 73%. Due to the price of fuel and the disruptions of the
early part of the year, Finnair recorded a loss in the second quarter, in line
with earlier profit guidance.
Finnair's turnover in the second quarter of 2011 grew by 65.9 million euros
compared with the corresponding period of the previous year. Revenue from Asian
traffic grew by 28% compared with the corresponding period.
Travel demand from Europe to Japan continued to be weaker in the second
quarter compared to the previous year. The weakness of the Japanese markets had
a significant impact on the result in the second quarter. Business travel to
Japan is recovering, however, and Japanese demand remained strong. On average,
approximately 70% of passengers travelling on Finnair's Japan routes annually
are Japanese.
Finnair's financial performance deteriorated and its operating result was a
loss of -13.8 million euros, compared with a loss of 13.6 million euros in the
corresponding period of the previous year. Due to improvements in operational
efficiency, operating costs excluding fuel were in line with expectations, at
425.5 million euros (392.7). Unit costs, excluding fuel, fell by 11.6%
compared with the previous year.
Cargo demand continued to develop positively, and cargo sales grew 18%
compared with the corresponding period of the previous year. In March, Finnair
and Neff Capital Management LLC announced their intention to establish a cargo
traffic joint venture, Nordic Global Airlines Ltd (NGA). The company started
cargo traffic with MD11 aircraft on August 4, 2011. In June Finnair Cargo
entered into a partnership agreement with World Airways. World Airways will fly
twice a week with MD-11 aircraft between Helsinki, New York and Shanghai.
On July 1, 2011 Flybe and Finnair announced the acquisition of Finnish
Commuter Airlines (FCA). Competition authorities approved the acquisition on
August 1, 2011. No items related to the acquisition are included in the numbers
for the second quarter. The companies' joint vision is to build the leading
regional airline of the Nordic countries and the Baltic States. The acquisition
of Finnish Commuter Airlines will be implemented by founding a new company
called Flybe Nordic, of which Flybe will own 60% and Finnair 40%. The plan is
for Flybe to take over the day-to-day operation and management of Finnish
Commuter Airlines in August 2011.
The cooperation with Flybe and the acquisition of FCA reflect Finnair's
partnership strategy and are examples of the company's intention to cooperate
with the industry's best to create added value for customers and shareholders.
Flybe Nordic will create for the Nordic market a strong, cost-efficient
carrier, complementing Finnair's operations and providing point-to-point
connections and an effective feeder traffic platform for Finnair's
international flights.
Finnair has continued to implement the new identity announced in the final
quarter of 2010. One of its key areas is the renewal of service identity, and
the company began to put this into practice in the first quarter of 2011. The
service training programme has been well received by personnel. By the end of
June, 1613 Finnair employees had participated in the programme.
Key Factors and Risks
In addition to operations, Finnair's result is significantly affected by the
development of the market price of jet fuel, because fuel purchases are one of
the largest cost items alongside personnel costs, fuel accounting for 24% of
total costs. The result is also affected by exchange-rate fluctuations of the
US dollar and the Japanese yen against the euro. Due to strong Japanese
business operations, the yen is a significant revenue currency for Finnair,
while fuel costs, on the other hand, are linked to the dollar.
Certain risks are associated with the strategy implementation and start-up of
the new joint venture Flybe Nordic. The company's long-term goal is to gain
leadership in regional aviation of the Nordic countries and the Baltic States.
The market is competitive, and to succeed the new company will have to
establish its own brand and be able to stand out to its advantage in
cost-efficient regional aviation.
Finnair's operations are associated with a number of strategic, economic and
operational risks, and these have been comprehensively outlined in the 2010
Annual Review and consolidated financial statements
http://www.finnairgroup.com/investors/investors_9.html.
Due to the short booking horizon in passenger and cargo traffic, long-term
forecasting is difficult.
Outlook for the second half of 2011
The result for the second half of the year is expected to return to profit, in
accordance with earlier profit guidance. The company expects that it will be
able to achieve during this year some of the planned cost-savings it has
announced today.
At the same time, the company expects that it will not be able to achieve a
positive result in 2011, due to the heavy losses of first half of the year.
Finnair continues to expect that turnover will grow by more than 10% in the
full year 2011.
Financial Result, April 1 - June 30, 2011
In April-June 2011, the Finnair Group's turnover was 539.4 million euros,
which is 13.9% lower than the corresponding period of the previous year. The
Group's operational result, i.e. EBIT excluding non-recurring items, capital
gains, changes in the fair value of derivatives and maintenance currency
changes, was a loss of 13.8 million euros (13.6 loss). The result before taxes
was a loss of 30.2 million euros (37.9 loss).
Changes in the fair value of derivatives and maintenance currency changes
improved the reported result for the second quarter by 11.3 million euros. The
positive impact of this item in the corresponding period of the previous year
was -20.8 million euros.
The weakening of the US dollar in relation to the euro did not affect the
operational result significantly in the second quarter. At the end of June, the
degree of hedging for a dollar basket over the following 12 months was 71%.
In the second quarter, euro-denominated operating costs were 557.2 (495.8)
million euros. Fuel costs, including price hedging, rose by 27.7 % and were
131.7 million euros. The company's personnel costs were 110.4 million euros
(105.9). Fleet material purchases, maintenance costs and depreciation totalled
54.4 million euros (58.6).
Net cash flow from operating activities in the review period was 90.1 million
euros (19.5).
Return on capital employed for the last 12 months was -3.4% (-7.8) and return
on equity was -7.9% (-13.7). Finnair's earnings per share in April-June were
-0.20 euros (-0.23).
Financial Result, January 1 - June 30, 2011
In January-June 2011, the Finnair Group's turnover was 1,073.1 million euros
(955.0). The Group's operational result, i.e. EBIT excluding non-recurring
items, capital gains, changes in the fair value of derivatives and maintenance
currency changes, was a loss of -56.9 million euros (39.9 loss). The result
before taxes was a loss of -76.4 million euros (67.3 loss).
Changes in the fair value of derivatives improved the reported result for the
first half of the year by 8.3 million euros. The impact of this item in the
corresponding period of the previous year was 20.4 million euros.
In the review period, euro-denominated operating costs were 1,138.0 (1,006.9)
million euros. Fuel costs, including price hedging, rose by 26.9 %. The
company's personnel costs were 227.2 million euros (217.8). Fleet material
purchases, maintenance costs and depreciation totalled 114.6 million euros
(114.6).
Net cash flow from operating activities in January-June 2011 was 52,1 million
euros (1.6).
Balance Sheet
The Group's balance sheet total at the end of June 2011 was 2,475.5 million
euros (2,548.1), while shareholders' equity totalled 800.1 million euros
(807.9) i.e. 6.26 euros per share. Equity attributable to owners of the parent
on June 30 was 799.4 million euros (806.9).
Shareholders' equity includes a fair value fund related to hedge accounting,
the value of which is affected by changes in the oil price and foreign exchange
rates. The size of the item on the closing date was 38.9 million euros, after
deferred taxes, and it includes foreign exchange and fuel derivatives as well
as, to lesser degree, other items (9.1).
Cash flow and Financing
Net cash flow from operating activities in April-June 2011 was 90.1 million
euros (19.5). Cash flow before financing activities was 110.0 million euros
(85.2). Financial expenses in the second quarter totalled 6.2 million euros
(5.7) and financial income 1.2 million euros (1.0)
Advance payments related to fixed asset investments were -11.6 million euros
(61.1). On June 30, 2011 interest-bearing debt was 723.3 million (860.3). The
equity ratio was 32.9% (32.2) and gearing 24.0% (36.1). Adjusted gearing was
78.7% (98.1).
The Group's liquidity remained good. Finnair has the option of a loan-back of
employment pension fund reserves from Ilmarinen Mutual Pension Insurance
Company amounting to approximately 380 million euros. The use of this option
requires a bank guarantee. In addition, Finnair renewed in June 2010 a 200
million euro syndicated three-year credit facility, intended as reserve
financing, which has not been used to date. Financial flexibility is also
achieved through a 200 million euro short-term commercial paper programme,
which at the closing date was completely unused.
Capital expenditure
In April-June 2011, the Finnair Group's capital expenditure, excluding advance
payments, totalled 30.9 million (74.8), in January-June 61.8 million (143.5).
Fleet investments in the first half 2011 totalled around 56.6 million euros
(141.7). Total investment in 2011 is expected to be around 70 million euros.
Fleet
The Finnair Group's fleet is managed by Finnair Aircraft Finance Oy, a
wholly-owned subsidiary of Finnair Plc. At the end of June 2011, the Finnair
Group had a total of 65 aircraft in flight operations. The average age of
Finnair's entire fleet is just over seven years.
One Embraer E190 aircraft joined the Finnair fleet during the second quarter.
No aircraft deliveries are planned for the latter part of the year.
Business Area Development
The segment reporting of the Finnair Group's financial statements is based on
business areas. The reporting business areas are Airline Business, Aviation
Services and Travel Services.
Airline Business
This business area is responsible for scheduled passenger and charter traffic
as well as cargo sales, customer service and service concepts, flight
operations and activity connected with the procurement and financing of
aircraft. The Airline Business segment comprises the Sales & Marketing,
Operations, Customer Service and Resources Management functions as well as the
subsidiaries Finnair Cargo Oy, Finnair Cargo Terminal Operations Oy, Finnair
Aircraft Finance Oy and Finnair Flight Academy Oy.
Key figures
-----------
Q2 Q2 Change H1 H1 Change
2011 2010 % 2011 2010 %
Turnover and result
--------------------------------------------------------------------------------
Turnover EUR 475.9 415.6 14.5 928.2 818.8 13.4
million
--------------------------------------------------------------------------------
Operational result, % -2.4 -2.6 -5.9 -4.3
% turnover
Operational result, EUR -11.3 -10.6 6.6 -55.2 -35.2 56.8
EBIT million
Personnel
Average number of 3 547 3 566 -0.5
employees
--------------------------------------------------------------------------------
Passenger traffic
Finnair traffic measured in passenger kilometres grew in April-June 2011 by
18% compared with the previous year, while capacity overall grew by 21%. In
Asian traffic, capacity grew by 28%, mainly due to the opening of the Singapore
route. Passenger load factor fell by 1.8 percentage points in the second
quarter.
Long-haul business travel demand developed positively in the second quarter,
and business class travel grew, particularly in Asian traffic. Overall,
business class demand in scheduled passenger traffic grew by 27% in the second
quarter. Business travel to Japan is recovering, even though demand is still
clearly at a lower level than the previous year. Travel directed from Japan to
Europe remained good.
Finnair traffic's unit revenue per passenger kilometres (RPK) in the second
quarter was at the same level as the previous year. Unit revenue in scheduled
traffic fell by 1.1%. Events in Japan and the Middle East in particular
contributed to the decline in unit revenue in April-June. In addition,
overcapacity in Finland's internal traffic adversely affected unit revenue in
the domestic market. Correspondingly, unit revenue per available seat kilometre
(RASK) fell by 4,3%.
Corporate sales continued to develop favourably in the second quarter, growing
by 30% compared with the corresponding quarter the previous year. Growth was
mainly from sales outside Finland, which grew by more than 50%. Corporate sales
growth was strongest in Germany, Switzerland, China, Hong Kong, Japan, Russia,
Poland and Norway. Global corporate sales accounted for 27% of total scheduled
traffic sales and grew by 1.8% compared with the corresponding period of the
previous year.
In April-June 2011, Finnair's charter flights carried around 156 500
passengers, which was 20% less than the previous year. In charter traffic, some
routes previously operated as leisure flights where flown as scheduled flights
from the start of the summer season. In addition to these changes, the
significant change in leisure traffic capacity is also due to cancellations of
flight series to Egypt and Tunisia owing to unrest in the Middle East and North
Africa. The passenger load factor of charter flights was the same as in the
previous year (83%).
Finnair further increased its market share compared with its main competitors
in scheduled traffic between Europe and Asia, and its market share on operated
route pairs was 5.8% (5.5). In terms of market share, Finnair is the third
largest network airline in the markets served by the company, as measured by
revenue passenger kilometres (RPK). Finnair's market share of flights departing
from Finland is approximately 52%.
The arrival punctuality of Finnair scheduled flights remained good: in the
second quarter 86.6% (88.6%) of all flights arrived on schedule.
Cargo
Despite a challenging start to the year, Cargo also recorded a good result in
April-June 2011. Cargo sales grew by 18% in the second quarter. Available tonne
kilometres grew by 21.5% and revenue tonne kilometres by 16.1%.
Cargo unit revenue grew by 1.8% per available tonne kilometre. The amount of
cargo and mail carried grew by 10.5%. The overall load factor was 61.1%.
In addition to the opening of the Singapore route and additional flights to
Hong Kong, cargo aircraft traffic launched in spring 2010 also contributed
positively to Cargo's growth figures during the first half of the year.
Operation of the cargo aircraft was transferredto the newly-founded Nordic
Global Airlines Ltd in August, in which Finnair Cargo is minority shareholder.
In line with its growth strategy, Finnair Cargo entered into a partnership
agreement with World Airways in June. World Airways will fly twice a week with
MD-11 aircraft between Helsinki, New York and Shanghai.
Flight Training
Finnair Flight Academy's sales showed good growth in the early part of the
year. Sales to non-Finnair customers grew by 15% in the second quarter compared
with the corresponding period of the previous year, and utilisation of flight
simulators is very high.
Air Traffic Services and Products
In May 2011 Finnair opened a new destination, Singapore, which is served by
daily flights. In June, the company increased the number of flights to Hong
Kong. Finnair now flies a record number of 74 flights per week to 10 Asian
cities.
Cooperation flights from Helsinki via Singapore to Melbourne, Brisbane, Perth,
Adelaide and Sydney with the Australian oneworld alliance partner Qantas began
in May after the opening of the Singapore route.
Europe's largest regional airline Flybe and Finnair announced at the beginning
of July their vision of building Flybe Nordic into the leading regional airline
in the Nordic countries and the Baltic States. Flybe Nordic's plans include
opening new routes and offering attractive prices, aimed at revitalising
regional air traffic in the Nordic countries. The company's goal is to develop
markets that other airlines do not yet serve, by introducing new regional
routes, flights and timetables. The company's objective is start operating with
a new route network from the start of the IATA winter season, October 30, 2011.
The planned operational expansion will complement the important routes already
operated by Finnish Commuter Airlines in Finland.
In July 2011 Finnair announced that it will open routes to Chongqing in China
and Lyon in France. Finnair will be the first European airline to open direct
scheduled flights to Chongqing. The flights will begin in May next year. In
addition to Chinese firms, many Western companies, particularly in the
electronics, automotive and chemical industries, are currently expanding their
operations into Chongqing, resulting in strong growth in business travel. The
growth prospects for cargo are also promising due to industrial growth.
The World Airline Awards named Finnair the Best Airline in Northern Europe
2011 in connection with the Paris Air Show. The World Airline Awards™ draws on
the aviation industry's highly respected Skytrax World Airline Survey research,
which is widely recognised as the only global and independent customer
satisfaction research measuring airline operations.
Aviation Services
This business area comprises aircraft maintenance services, ground handling
and the Group's catering operations. In addition, most of the Group's property
holdings, the procurement of office services, and the management and
maintenance of properties related to the Group's operational activities also
belong to the Aviation Services business area. Aviation Services' business
consists mainly of intra-Group service provision. Of the business area's
turnover, one quarter comes from outside the Group.
Key figures
-----------
Q2 Q2 Change H1 H1 Change
2011 2010 % 2011 2010 %
Turnover and result
--------------------------------------------------------------------------------
Turnover EUR 100.8 101.8 -1.0 215.3 212.5 1.3
million
--------------------------------------------------------------------------------
Operational result, % 9.0 2.3 5.5 1.8
% turnover
Operational result, EUR 9.1 2.3 295.7 11.9 3.9 205.1
EBIT million
Personnel
Average number of 2 673 2 681 -0.3
employees
--------------------------------------------------------------------------------
Finnair Catering's operating profit grew in April-June. Finncatering's
operations were also profitable in the second quarter. Non-airline customer
sales in particular developed positively.
An analysis of structural alternatives and possible partnerships in Finnair
Catering is currently under way. The work covers Finnair Catering Oy's catering
operations as well as Finncatering Oy.
Finnair Technical Services' result was profitable in the second quarter. The
restructuring of Technical Services is proceeding according to plan. The
business transfer of warehousing services to Suomen Transval Oy entered into
effect on June 1, 2011 and at the same time 62 employees transferred to
Transval's service.
The operational result of ground handling service provider Northport showed a
slight loss in April-June.
Travel Services (tour operators and travel agencies)
This business area consists of the tour operator Aurinkomatkat-Suntours and
its subsidiaries operating in Estonia and Russia, and also the business travel
agencies Matkatoimisto Area and Finland Travel Bureau (FTB) and FTB's
subsidiary Estravel, which operates in the Baltic countries. Amadeus Finland
produces travel sector software and solutions. Aurinkomatkat serves leisure
travellers, offering its customers, in addition to package tours, tailored
itineraries, flight and hotel packages, flights only, cruises, and golf,
sailing and skiing holidays.
Key figures
-----------
Q2 Q2 Change H1 H1 Change
2011 2010 % 2011 2010 %
Turnover and result
--------------------------------------------------------------------------------
Turnover EUR 65.7 63.3 3.8 172.3 163.4 5.4
million
--------------------------------------------------------------------------------
Operational result, % -8.5 -2.5 -2.6 -0.7
% turnover
Operational result, EUR -5.6 -1.6 250.0 -4.5 -1.2 275.0
EBIT million
Personnel
Average number of 1 004 1 141 -12.0
employees
--------------------------------------------------------------------------------
There is significant overcapacity in Finland's package tour market, which has
reduced prices of summer tours. Aurinkomatkat's turnover grew in the second
quarter 2011 by 8%, while passenger numbers grew by 17% compared with the
previous year. Russian package tour production grew in April-June. Estonian
package tour demand is also recovering from the recession.
Integration of the leisure operations of Area and Finland Travel Bureau into
Aurinkomatkat was completed in the second quarter. Aurinkomatkat can now
provide consumers with all of their leisure travel needs. The main delivery
channel is the internet service www.aurinkomatkat.fi, which is complemented by
a telephone service and Aurinkomatkat offices in five localities.
Aurinkomatkat's visual identity was renewed and its name was abbreviated to
the form ‘aurinko' in its new logo. A similar update will be implemented in the
autumn in the Estonian and Russian markets. Customer satisfaction remained on a
very high level.
Business travel grew significantly in the review period and Finnair's business
travel agencies increased their market share. Travel agencies' productivity
improved and the result turned clearly into profit. Finland Travel Bureau
established the Service Lab development incubator in Helsinki. This interactive
development unit will develop, optimise and test new service concepts together
with customers. Area, on the other hand, introduced a continuous, mobile
customer satisfaction survey.
From the beginning of June, Area and FTB have offered their international
customers clearly distinctive service alternatives. Area has chosen the
GlobalStar chain as its international partner. FTB continues to be the only
representative of American Express Travel Services in Finland and the Baltic
countries. The companies updated their visual identities and website services
to meet the needs of business travellers.
Shares
Finnair's market value on the NASDAQ OMX Helsinki Stock Exchange at the end of
June 2011 was 457.4 million euros (512.5) and the closing share price was 3.57
euros (4.00). During the period January-June, the highest price for the company
share was 5.37 euros (4.78), the lowest price 3.22 euros (3.61) and the average
price 4.09 euros (4.16). Some 11.3 million (16.5) of the company's shares, with
a value of 46.1 million euros (68.4), were traded. The number of shares
recorded in Finnair's Trade Register entry was 128,136,115 at the end of June.
The Finnish State owned 55.8% (55.8) of Finnair's shares, while 14.3% (16.0)
were held by foreign investors or in the name of a nominee.
On June 30, Finnair held 410,187 of its own shares, representing 0.3% of the
total share capital. In January-June 2011, the company did not acquire nor
dispose of any of its own shares.
Personnel
In the period April-June 2011, the Group had an average of 7,519 employees
(7,621). Personnel were distributed by business area as follows: Airline
Business 3,547 (3,566), Aviation Services 2,673 (2,681) and Travel Services
1,004 (1,141). The number of Group employees was 7,795 on June 30, 2011.
In April, Finnair agreed a pay settlement with the Finnair Technical
Employees' Association and concluded a year-long collective agreement with the
Finnish Aviation Employees' Association.
FINNAIR PLC
Board of Directors
Media briefing
Finnair will have its media briefing at 11 a.m. and analyst briefing at 12.30
p.m. at the World Trade Center, Helsinki-Vantaa Airport, address Lentäjäntie 3,
on August 5, 2011.
Finnair Plc
Communications
Arja Suominen
Senior Vice President, Communications and Corporate Responsibility
For further information, please contact:
Chief Financial Officer
Erno Hildén
telephone +358 9 818 8550
erno.hilden@finnair.com
Senior Vice President, Communications and Corporate Responsibility
Arja Suominen
telephone +358 9 818 4028
arja.suominen@finnair.com, comms@finnair.com
Investor Relations Officer
Kati Kaksonen
Financial Communications and Investor Relations
telephone +358 9 818 2780
kati.kaksonen@finnair.com, investor.relations@finnair.com
Financial reporting later in 2011:
- The Q3 interim report will be published on October 27, 2011
Additional information relating to the interim report can be found on the
Finnair website at the address
http://www.finnairgroup.com/investors/investors_2.html
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