Finnish airline Finnair in $51 million fourth-quarter loss as revenue plunges 20 pct

Finnair hit by Q4 loss

HELSINKI — Finnair PLC on Friday reported a fourth-quarter loss of euro37 million ($51 million) with revenue falling more than 20 percent, as weak demand continued to hit air travel in the economic downturn.

The net loss in the period compared to euro45 million a year earlier. Revenue plunged 21 percent to euro458 million.

Finnair stock was down 1.8 percent at euro3.72 ($5.15) in early afternoon trading in Helsinki.

CEO Mika Vehvilainen gave a bleak outlook.

“The early part of 2010 still appears to be difficult for Finnair and for the entire air transport sector. Domestic demand shows no signs of recovery and it seems that the fall in prices will continue in early 2010,” he said.

The national carrier has been struggling with declining demand, competition from budget airlines and overcapacity. It has warned of more cuts after slashing capacity by 12 percent in October.

Finnair’s full-year net loss deepened to euro102 million and sales fell 18 percent to euro1.8 billion. Passenger traffic fell 10 percent as it was hit by two strikes — by baggage handlers and pilots — that caused hundreds of flight cancellations costing the company millions.

Finnair laid off hundreds of workers last year and started statutory talks with all employees to initiate more cost-cutting measures. It also doubled an annual savings program to euro200 million — with most of the new cuts aimed at personnel costs.

“The initiated efficiency measures must be continued,” Vehvilainen said. “To improve profitability, we must, alongside savings, make every effort to increase growth in demand.”

Finnair, which is 56 percent government-owned, flies to 50 destinations with a fleet of 63 aircraft. It employs 7,400 people — down from 9,000 a year earlier.

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On the Net:

www.finnair.com