Finnair has continued to suffer losses even though revenue has double in the past third quarter to €199.4 million. The group posted a comparable operating loss of €109.1 million for the quarter, against a loss of €167 million a year ago. Finnair reported positive operating cash flow for the first time since the fourth quarter of 2019, thanks to improved bookings and strong cargo operations. The airline group expects operating cash flow to remain positive in the fourth quarter 2021. Cargo revenue doubled in the quarter to €65 million in the third quarter.
Travel restrictions have been lifted at a slower pace than expected and, therefore, the recovery in demand has also been delayed, notes Finnair. The airline expects continuing travel restrictions to soften demand especially in Asia, which is expected to open to travellers some months later than Europe. “Due to the travel restrictions and incremental costs caused by the increased capacity, the comparable operating loss in Q3 2021 will be of a similar magnitude as in the five previous quarters despite the gradual increase in revenue,” said the airline. Finnair has not provided guidance on full year 2021 revenue.
“The negative impact of the pandemic continued in the third quarter, and our passenger numbers and revenue remained considerably below the pre-pandemic levels. Our result was still heavily negative,” said CEO Topi Manner. “Restrictions on travel between Finland and the rest of Europe were finally lifted in late July, much later than travel restrictions in the rest of Europe. Pent-up demand and the increase in vaccination coverage began to be positively reflected in bookings, especially from September onwards. Nevertheless, we are still far from the pre-pandemic passenger numbers. Our main market Asia continues to be largely closed to international travel, and the United States will not open before 8 November. Only approximately half of our markets are, thus, open for travel, which is clearly less than for many other European airlines.”
Finnair also confirmed that it had completed the sale-leaseback of four A350s and has used the proceeds of $400 million to strengthen its cash reserves “with a view to future loan repayments”. During the pandemic, Finnair has raised approximately €3 billion of new financing. As a result, Manner says that the company’s cash position is strong. “This enables us to focus on the ramp-up of our traffic,” he said.