Finnair has reported first quarter revenues down 16% to €561.2 million and also announced a rights issue for €500 million.
Finnair's current assumption is that it will operate the current minimum network throughout Q2 due to the coronavirus situation. At the same time, the company estimates that the recovery of air traffic will begin in stages from the beginning of July 2020.
Finnair estimates that with the current minimum network, its comparable operating result will be a daily loss of approximately €2 million throughout the second quarter, despite cost adjustments.
Chief executive Topi Manner said that despite a strong start to the year COVID 19 had impacted revenues dramatically since February.
“The effects were visible in all our traffic areas and the number of passengers decreased by 15.6 per cent. Despite determined cost reductions, our comparable operating result decreased significantly year-on-year and the operating loss was €91.1 million”.
Finnair issued profit warnings on 28 February and 16 March, and at the same time, announced measures to reduce costs. At the end of the first quarter, the carrier’s liquid cash funds were €833 million, including a raised €175 million revolving credit facility.
Finnair is drawing up an additional financing plan, which includes a €600 million pension premium loan, as well as aircraft sale and leaseback arrangements. Finnair also announced it is planning a €500 million share issue to strengthen the company's equity.
Citigroup Global Markets and Nordea Bank Abp are the Joint Global Coordinators, lead managers and underwriters of the offering.
The Finnish Government’s Ministerial Committee on Economic Policy has supported that a supplementary budget, which would cover participation of the State of Finland in the Offering, is proposed to the Finnish Parliament. The State of Finland currently holds 55.8% of the shares and votes in Finnair.
“The coronavirus has had an unprecedented impact especially on global aviation and also on Finnair. We want to ensure with this share issue that Finnair is a competitive airline also in the future by significantly strengthening the equity”, said Manner.