Finnair has suffered losses for the third year in a row.
A photo: GLOBAL LOOK PRESS
Finnish flag carrier Finnair turns 100 this year, but the mood at one of the world’s oldest operating airlines is anything but festive. For the third year in a row, the company has been losing money, and while analysts have noted a return to pre-pandemic levels for many airlines, Finnair is clearly not one of them. Another surge of COVID in China, a return to limiting tourist flows from Asia and the Far East, as well as a sharp – doubling in a year – increase in aviation fuel prices is negatively affecting the airline’s profitability. Only the news about Moscow’s decision to close the Russian sky for the Finns, among other European air carriers in February last year, brought down the value of the company’s shares by 20%. Overnight, the main competitive advantage was lost, since Finnair received more than half of its income from flights to Asia passing over the territory of the Russian Federation. Analysts consider the airline the most affected by the Ukrainian crisis in the industry.
The company has flourished in recent years! Over the decade – from 2009 to 2019 – the Finns have doubled passenger traffic. Finnair’s strategy was based on transporting the growing Chinese middle class, who were discovering the delights of European shopping and tourism. Before the pandemic, it seemed that this flow would be eternal. The geographical position of Suomi made it possible to connect the Asia-Pacific region with Europe and North America through the Russian airspace by the shortest route. The ban last February on flights to Russia lengthened routes to Asia, and the profitability of flights fell, putting the Finns on an equal footing with other carriers. In addition, according to some estimates, a fifth of the customers on Finnair flights were Russian travelers, who also left in 2022.
Managers are trying to reorient passenger traffic in the direction of North America and the Gulf countries. But there is also a lot of competition. Financial results for 2022 will be announced in February, but analysts predict losses of 10% of annual turnover. Today Finnair is saved from bankruptcy only by the willingness of the Finnish government to pay its growing bills. After all, the state owns over 55% of the airline’s shares. It also bears the main social responsibility for the staff, which has been continuously reduced for the third year already. From the outside, the airline is more and more like a suitcase without a handle: it’s hard to carry, and it’s a pity to leave …
However, the only bright spot against the backdrop of all this negativity is the company’s main achievement – almost 60 years without fatal accidents. What makes Finnair the safest airline in the world.