Finnair has lowered its full-year 2025 guidance after reporting a substantial decline in its third-quarter net income.
The airline’s net income for the period was down 46.8% to €30.5 million. Revenues were up only 2% to €834.9 million, while operating expenses climbed 3.9% to €808 million.
As-reported operating income was down 32.1% to €52.1 million, while comparable (or adjusted) operating income was down 29% to €50.7 million.
Revenue outlook for the year was lowered from €3.2bn to €3.3bn, down to €3.1bn.
In July this year, Finnair guided its full-year comparable operating income to come in between €30 million and €130 million, but the higher end has now been lowered to €60 million.
Capacity outlook was lowered to a 2% increase, including agreed wet leases. The airline had planned to increase capacity by 10% for the full year, but industrial action earlier in the year had a 5% negative impact on this goal.
“Lowering the upper end of the comparable operating result range as well as capacity and revenue guidance is mainly due to the continued weak demand and yield development in North Atlantic traffic, the indirect effects of industrial action on demand and yield development in North Atlantic traffic,” said Finnair.
“The third quarter marked Finnair’s return to normal, reliable operations after the industrial action that had caused flight cancellations in the first half of the year,” said Finnair CEO Turkka Kuusisto.
During the company’s earnings call, Kuusisto said it was “hard to quantify” the indirect impact of the industrial action, but it was estimated at “millions of euros” on top of the direct impact of around €18 million.
The indirect effects of industrial action on demand include unplanned aircraft repair and maintenance needs, and fuel price impacts. The airline had concluded negotiations with its unions in July after reaching a deal.
Finnair also cited geopolitical issues and the “threat of trade wars” causing economic uncertainty as key drivers for its outlook change.
“The direct cost impact of known tariffs is estimated to be limited, but it is too early to estimate the magnitude of potential indirect effects,” Finnair said in its report.
“During the year, Finnair’s profitability is burdened particularly by additional costs caused by the sustainable aviation fuel (SAF) distribution obligation introduced in the EU, as well as rising navigation and landing charges.”
Landing and navigation impact was around €10 million and environmental regulation impact was also €10 million during the third quarter.
The airline carried 3.3 million passengers during the quarter, relatively flat at a positive 0.2%, while load factor increased 0.2 percentage points to 79.8%. Capacity was up 2.7% during the quarter.