After strengthening its balance sheet and raising cash from a rights issue of €570 million (US$ 520 million) in November 2023, Finnair is closer to reaching its target of ‘reinstating shareholder distribution, based on the 2024 result, starting from Spring 2025,’ the carrier has confirmed.
The additional capital has enabled the carrier to purchase six previously leased A321 aircraft from global aircraft leasing company BOC Aviation in a transaction worth in excess of €200 million ($219 million). The positive impact of this transaction on both pre-tax profit and cash flow will be in excess of €20 million ($20 million) per year over the next few years.
Additionally, Finnair has been able to repay and an additional tranche of €120 million ($131 million) of its €600 million ($657 million) pension premium loan in December in addition to the previously planned €100 million($109 million) instalment. This December instalment (including interest) totals approximately €230 million ($252 million), leaving a remainder of €280 million ($307 million) to be repaid by May 2025.
The impact of the additional loan repayment will be approximately €3 million ($3.3 million) in 2024 in the form of lower net interest costs. As a result of both the aircraft purchases and the loan repayment, Finnair’s cash to sales ratio is close to (but still exceeds) the target of 30%.