FINNAIR PLC INTERIM REPORT 29 APRIL 2008 AT 0900
FINNAIR GROUP INTERIM REPORT 1 JANUARY - 31 MARCH 2008
Financial condition strong,
challenging terrain ahead
Summary of first quarter 2008 key figures
- Turnover rose 9.1 per cent to 576.5 million euros (528.5 million)
- Passenger traffic grew 12.5% in passenger kilometres from the previous year,
passenger load factor fell one percentage point to 74.9% (75.9%)
- Unit revenues from flight operations fell by 4.9%, while unit costs fell by
5.3%
- Excluding the impact of FlyNordic, sold in June, turnover rose 12.5%, RPK's
grew by 16.6%, load factor fell by 1.6 percentage points and unit revenues fell
by 2.9% and unit costs 3.7%
- Operating profit was 12.1 million euros (13.7 million)
- The operational result, i.e. EBIT excluding capital gains, non-recurring
items and changes in the fair value of derivatives, was 11.1 million euros (5.8
million)
- The result before taxes was a profit of 7.6 million euros (13.4 million)
- Gearing at the end of the March was -15.8% (16.6%) and gearing adjusted for
leasing liabilities was 42.1% (116.5%)
- Balance sheet cash and cash equivalents at the end of the quarter totalled
461.1 million euros (221.5 million)
- Equity ratio 44.1% (36.9%)
- Equity per share 7.58 euros (6.93)
- Earnings per share 0.05 euros (0.10)
- Return on capital employed 14.3% (-0.1%)
Comparisons of key figures have been made with first quarter 2007 figures, which
include figures for FlyNordic. Figures for 2007 are presented in brackets after
the figures for the current year.
The interim report's traffic performance comparison figures are actual traffic
performance figures from 2007, while in order to facilitate comparison the
traffic performance figures of FlyNordic, sold in July 2007, have been
eliminated from the monthly published traffic figures.
President and CEO Jukka Hienonen on the interim result:
Following last year's good profit development, we have entered the current year
in a good position. We were even able to improve the operational result to some
extent from last year's first quarter. Finnair's balance sheet position is
strong and our business is fundamentally in good shape.
The sector is moving, however, into clearly more difficult terrain. The high
price of fuel and the uncertain outlook for the world economy raise question
marks about the profit outlook for airlines. European airlines' load factors
have fallen on average by a couple of percentage points during the early part of
the year, which points to a levelling off of growth.
We are not immune to what is happening around us. At the moment, our own
passenger and cargo demand is reasonably good, but the booking horizon is
shorter than before. Our passenger load factor has fallen in recent months,
partly due to an attempt to improve the average price of flight tickets.
For many airlines, short-term cash flow has become so vital that they are
prepared to reduce average prices even though higher costs suggest that prices
should be raised. Such thinking corrodes a company's future and investment
capacity.
A restructuring of the sector is under way. The pressure for airlines to seek
mergers has clearly increased. Expensive jet fuel has choked the life out of
several airlines on different continents. If the present state of affairs
continues, there will surely be more bankruptcies and mergers to come.
Another bizarre case is the 300 million euro subsidy paid by the Italian state
to Alitalia even though the EU has specifically outlawed this kind of "doping".
This money is not an investment in the airline's future, it will only disappear
into the deep void of the company's inefficient cost structure. Giving
artificial resuscitation to a badly managed company only distorts competition.
It is important that our own cost structure is in good shape, our operating
chain effective and our fleet efficient. Finnair has already done much work in
these areas and the results are there to be seen. We must continue purposefully
on this path to ensure that we do well even if conditions deteriorate.
Market and General Review
At the beginning of 2008, growth in air traffic demand has continued, but the
passenger load factor in January-February, according to Association of European
Airlines AEA statistics, fell 1.4 percentage points from the previous year. In
terms of passenger kilometres, Finnair's scheduled traffic is growing clearly
above the European average, but the passenger load factor is still slightly
below the level of European network airlines.
In the early part of the year, total Asian traffic of European airlines has not
grown. On the other hand, Finnair's growth in Asian traffic has continued and
business class travel in long-haul traffic is still rising. Finnair's Asian
traffic is expected to grow this year by around 20 per cent. Based on ticket
sale locations, one third of passengers on Finnair's Europe-Asia traffic are
Central and Southern Europeans, one third live in the Nordic countries and one
third are Asians.
The high price of fuel has adversely affected the sector. Weakened profitability
has led to airline bankruptcies and mergers. Finnair's aim is to transfer fuel
costs into flight ticket prices.
Due to seasonal fluctuations in travel demand, the first quarter of the year is
generally the weakest quarter in flight traffic. Finnair was able to maintain
its profitability despite higher fuel costs.
Growth in scheduled traffic demand is expected to level off and prices are
expected to remain close to that of the previous year. In terms of growth in
demand, the most challenging area appears to be European traffic. In Asian
traffic, unit revenues are rising. Business class demand increases faster than
the overall sales.
The operations of the Group's units have been enhanced by the 2006-2007
efficiency programme, whose full impact will be apparent in the cost structure
this year.
In January-March, traffic irregularities weakened the punctuality of Finnair's
scheduled and leisure traffic. The increasing complexity of the company's
network structure has increased the disruption of traffic. Special attention is
being directed at production planning and supervision, by improving processes
and cooperation between units. Since March, punctuality has improved.
The operations of the Estonian subsidiary Aero were discontinued at the
beginning of the year and the remaining ATR 72 turboprop aircraft used by the
company were sold. At the same time, this marked the end of Finnair's propeller
traffic, which had continued uninterrupted since 1924.
Financial Result, 1 January - 30 March 2008
Turnover rose in the first quarter by 9.1 per cent to 576.5 million euros (528.5
million). The Group's operational result, i.e. EBIT excluding capital gains,
non-recurring items and changes in the fair value of derivatives, improved by
over 5 million euros to 11.1 million euros (5.8 million). Adjusted operating
margin was 1.9 per cent (1.1). The result before taxes was a profit of 7.6
million euros (13.4 million). Changes in the fair value of derivatives had no
substantial impact on the result for the quarter. The main contribution to the
capital gain of 1.1 million euros (1.9 million) was the sale of one ATR 72
turboprop aircraft.
In January-March, Finnair's passenger traffic capacity grew 13.5 per cent and in
revenue passenger kilometres by 12.9 per cent; Asian traffic grew 23.4 per cent
and leisure traffic by 19.6 per cent. Passenger load factor for traffic overall
declined from the previous year by one percentage point to 74.9 per cent. The
amount of cargo carried grew by 15.9 per cent.
Due to changes in the traffic mix, total unit revenues per passenger kilometre
in scheduled passenger and leisure traffic fell by 4.4 per cent. Yield per
passenger rose by 16.5 per cent. Unit revenues per tonne kilometre for cargo
traffic rose by 2.6 per cent. Weighted unit revenues for passenger and cargo
traffic fell by 4.9 per cent.
Euro-denominated operating costs rose during the period by 9.4 per cent. Unit
costs for flight operations fell by 5.3 per cent. Fuel costs rose in the first
quarter by 30.7 per cent and per tonne kilometre flown by 13.8 per cent. Unit
costs, excluding fuel costs, fell by 11.2 per cent.
Sales and marketing costs rose by 39.7 per cent. Finnair's marketing efforts
have been purposefully increased in markets outside Finland and on the internet
in order to boost recognition and sales, which in turn has increased Finnair's
market share in traffic between Europe and Asia.
Package tour production costs grew 24.6 per cent, which resulted from growth in
sales, growth in the relative share of long-haul trips and a rise in the
standard of package tour hotels in line with customer demand. Moreover, the
incorporation into Aurinkomatkat-Suntours of the operations of the Estonian
company Horizon Travel and the St. Petersburg travel agency Calypso, acquired
last year, is evident in higher costs, but also as an increase in turnover.
Personnel expenses rose 4.0 per cent as a result of payroll increases in
accordance with the collective employment agreements concluded at the end of
last year and increased overtime costs due to the handling of irregular
situations.
Net cash flow from operations improved significantly in January-March. Financial
expenses were six million euros higher than the previous year. Earnings per
share for the first quarter amounted to 0.05 euros (0.10).
Investment, financing and risk management
Investments in January-March totalled 64.4 million euros (52.3 million). The
investments included two Embraer 190 aircraft. Including advance payments, the
cashflow impact of fleet and auxiliary investments was around 93.0 million euros
in the first quarter. The cashflow impact of the new aircraft acquisition
programme and auxiliary investments in 2008 will be around 250 million euros and
in 2009 more than 400 million euros. The final investment sum will depend on how
many of the aircraft are acquired on operational leasing agreements.
At the end of March, the Group had balance sheet cash and cash equivalents
amounting to 461.1 million euros, in addition to which there is a total of 250
million euros in to-date unused committed credit facilities.
Operational net cash flow, which describes internal financing, improved to 28.7
million euros due to more efficient management of working capital (0.6 million).
Due to an improvement in internal financing and the share issue completed in
December last year, gearing fell from last year's 16.6 per cent to a debt-free
position, namely -15.8 per cent, at the end of the period. Gearing adjusted for
leasing liabilities was 42.1 per cent (116.5%). The equity ratio correspondingly
rose from the previous year by 7.2 percentage points to stand at 44.1 per cent.
The income statement's financial items include an item that weakens the result
by around five million euros, which is the accounting valuation of the Norwegian
Air Shuttle share options owned by Finnair, after a fall in the share price in
the first quarter compared with the turn of the year. If Finnair exercises the
options by the end of 2008, its holding in Norwegian will rise to more than ten
per cent.
According to the financial risk management policy approved by Finnair's Board of
Directors, the company has hedged 68 per cent of scheduled traffic's jet fuel
purchases during the next six months and thereafter for the following 30 months
with a decreasing level of hedging. Finnair Leisure Flights price hedges fuel
consumption according to its agreed traffic programme within the framework of
the hedging policy. Derivatives linked to jet fuel and gasoil prices are mainly
used as the fuel price hedging instrument.
Under IFRS rules, a change during the financial period in the fair value of
derivatives that mature in future is recognised in the Finnair income statement
item “Other expenses”. The said change in the fair value of derivatives is not a
realised hedging gain nor does it have an effect on cash flow; it is a valuation
gain in accordance with IFRS reporting practice. During January-March, the
change in the fair value of derivatives was -0.1 million euros.
The rise in the fair value of fuel hedges is compensated by a reduction in value
of foreign currency hedges. In addition, income from matured fuel hedges, which
was still recognised as a change in fair value outside the operational result at
the turn of the year, was recognised in the operational result during the first
quarter.
A weakening of the US dollar against the euro has had a positive impact on
Finnair's operational result of around 11 million euros, taking foreign currency
hedging into account. At the end of March, the degree of hedging for a dollar
basket over the following 12 months was 68 per cent.
Shares and Share Capital
Finnair's market value at the end of March was 930.3 million euros (1,152.1
million) and the closing price was 7.26 euros. During the first quarter, the
highest price for the Finnair Plc share on the OMX Nordic Exchange Helsinki was
8.49 euros (14.35), while the lowest price was 6.63 euros (12.02) and the
average price 7.29 euros (13.37). The fall in the price was influenced by the
separation of the subscription right from the share at the end of the year. Some
28.4 million (6.4 million) of the company's shares, with a value of 207.2
million euros (85.6 million), were traded on the OMX Nordic Exchange Helsinki.
The number of shares recorded in Finnair's Trade Register entry was 128,136,115
on 31 March 2008. The registered share capital was 75,442,904.30 euros. The
Finnish State owned 55.8 per cent (55.8%) of Finnair's shares, while 21.8 per
cent (33.8%) were held by foreign investors or in the name of a nominee.
At the beginning of the financial year, Finnair held 151,903 of its own shares,
which it had purchased in previous years. From 11 February to 17 March 2008,
Finnair acquired 598,097 of its own shares. On 31 March 2008, Finnair held
750,000 of its own shares, namely 0.59 per cent of the total number of shares
outstanding. The Annual General Meeting held on 27 March 2008 authorised the
Board of Directors for a period of one year to purchase the company's own shares
up to a maximum of 5,000,000 shares and dispose of the company's own shares up
to a maximum of 5,500,000 shares. The authorisation applies to shares amounting
to less than five per cent of the company's total shares outstanding.
Finnair's second biggest shareholder, FL Group, announced on 31 March 2008 that
it was disposing completely of its approximately 12 per cent holding in Finnair.
The shares were sold to a number of institutional investors, mainly in the
Nordic countries.
Board of Directors and Senior Management
At the Annual General Meeting held on 27 March 2008, the following former
members were elected as members of Finnair Plc's Board of Directors for a term
lasting until the end of the next Annual General Meeting: Christoffer Taxell
(Chairman), Sigurdur Helgason, Satu Huber, Markku Hyvärinen, Kari Jordan, Ursula
Ranin and Veli Sundbäck. In addition, a new member, Pekka Timonen, was elected.
PricewaterhouseCoopers Oy, Authorised Public Accountants, with Eero Suomela,
Authorised Public Accountant, as auditor with main responsibility, and Jyri
Heikkinen APA were elected as the company's auditors, and Tuomas Honkamäki APA
and Timo Takalo APA as deputy auditors.
Christer Haglund was appointed Senior Vice President for Public Affairs and
Corporate Communications and member of Finnair Plc´s Executive Board as of
1 March 2008.
Personnel
During the first quarter, the average number of staff employed by the Finnair
Group totalled 9,426 (9,412), which was 0.1 per cent more than a year earlier.
Scheduled Passenger Traffic had 4,168 employees and Leisure Traffic 463
employees. The total number of personnel in technical, catering and ground
handling services was 3,540 and in travel services 1,102, while 153 people
worked in other functions.
At the end of March, Finnair Group had around 780 employees outside of Finland,
of whom 280 worked in sales and customer service duties for Finnair's passenger
and cargo traffic. There are a total of 500 employees working for travel
agencies and tour operators based in the Baltic states and Russia, and as guides
at Aurinkomatkat-Suntours' holiday destinations. Foreign personnel are included
in the total number of Group employees.
The pilots' current collective employment agreement will expire at the end of
April 2008. Negotiations to reach a new agreement are continuing.
Fleet changes
Finnair Group's fleet is managed by Finnair Aircraft Finance Oy, which belongs
to the Scheduled Passenger Traffic business area. At the end of March, the
Finnair Group had a total of 64 aircraft in flight operations, of which ten are
wide-bodied aircraft used in long-haul traffic. The average age of the Finnair
Scheduled Passenger Traffic's entire fleet was 5.4 years, and in European
traffic 4.4 years. Finnair has at its disposal the most modern fleet in European
air traffic, which brings both cost savings and eco-efficiency.
Finnair's wide-body fleet expands with two new Airbus A340 -plane. One plane
joins Finnair's fleet in May, another in July. The entire long-haul fleet then
consists of 12 aircraft. One Boeing MD-11 will be phased out in fall 2008. In
the beginning of February, Finnair exercised one of its three remaining options
for wide-body aircraft and confirmed the eighth order for Airbus A330 long-haul
plane. The airplane will be delivered in the spring 2010.
The Embraer aircraft acquisition programme, which began in autumn 2005,
continued in the first quarter. In February-March, two 100-seat Embraer 190
aircraft were delivered to Finnair. Now Finnair has a total of 18 Embraer
aircraft. In 2009 two more Embraer 190s will be acquired. In addition, Finnair
confirmed in February orders for three Embraer 190 aircraft in 2010-2011.
In January the sale was agreed of the remaining three ATR 72 turboprop aircraft
being used by the Estonian subsidiary Aero Airlines. One aircraft were handed
over to the purchaser in the first quarter and two will be handed over in the
second quarter. Aero stopped operating on 6 January 2008.
In April 2008 the sale was announced of six Boeing MD-80 aircraft and three
spare engines, owned by Finnair but flown by FlyNordic, which was sold in July
2007.
Environment
Finnair takes the environment into consideration in all of its actions and
decisions. Finnair responds positively to emissions trading principles and
strives as part of the community of European airlines to argue successfully that
the system should be worldwide and should not distort competition in the
industry.
Finnair has been systematically modernising its fleet since 1999. The European
and domestic traffic's Airbus A320 and Embraer aircraft represent the latest
technology. The modern fleet is eco-efficient both in terms of carbon dioxide
and noise emissions.
Kati Ihamäki MSc(Econ) was appointed as Finnair's VP, Sustainable Development as
of 1 February 2008. Ihamäki's task is to promote the realisation of Finnair's
environmental goals in the Group's business operations, such that Finnair is
among the leading airlines in environmental activities. Ihamäki is also
responsible for coordinating environmental strategy and emissions trading
projects as well as for integrating environmental issues into Finnair's
competitive strategy.
Performance of business areas
The primary segment reporting of the Finnair Group's financial statements is
based on business areas. The reporting business areas are Scheduled Passenger
Traffic, Leisure Traffic, Aviation Services and Travel Services.
Scheduled Passenger Traffic
This business area is responsible for sales of scheduled passenger traffic and
cargo, service concepts, flight operations and activity connected with the
procurement and financing of aircraft. Scheduled Passenger Traffic leases to
Leisure Traffic the crews and aircraft it requires. The business area consists
of the following units and companies: Finnair Scheduled Passenger Traffic,
Finnair Cargo Oy, Finnair Cargo Terminal Operations Oy and Finnair Aircraft
Finance Oy. The operations of the Estonian subsidiary Aero Airlines were
discontinued on 6 January 2008.
The business area's turnover rose in the first quarter by 8.2 per cent to 423.2
million euros (391.2 million). The operational result was a loss of -0.4 million
euros (-0.3 million).
Scheduled Passenger Traffic carried nearly 1.7 million passengers in
January-March. This represented a decline of 11.8 per cent from the previous
year, resulting from the sale of FlyNordic and the winding up of Aero's
operations. Scheduled Passenger Traffic's revenue passenger kilometres, on the
other hand, grew by 9.5 per cent, while capacity grew by 12.5 per cent, leading
to fall in passenger load factor by 1.9 percentage points to 68.7 per cent
During the first three months of the year, unit revenues for scheduled passenger
traffic fell by 4.2 per cent. If the load factor of FlyNordic, sold in July
2007, is excluded in the comparison period, Finnair Scheduled Passenger
Traffic's passenger load factor fell by 2.9 per cent. The decline in unit
revenues was due primarily to Easter, when business travel is lower, falling in
March this year.
Cargo revenues account for a good ten per cent of all Scheduled Passenger
Traffic's revenues. In January-March, cargo unit revenues rose by 2.6 per cent,
taking all types of traffic into account. The total amount of cargo carried in
scheduled traffic grew by 22.5 per cent. The amount of cargo carried in Asian
traffic rose by 36.1 per cent from the previous year. The amount of cargo
carried in traffic overall grew by 15.9 per cent from the previous year.
Finnair Cargo Oy's profitability improved significantly from last year. One key
reason for the profit improvement was the significant cut in cargo capacity
leased from outside the Group compared with the same period the previous year.
In international scheduled traffic, Finnair has increased its market share
compared with its main competitors. In domestic traffic Finnair's market share
has fallen, mainly due to the discontinuation of short routes. This has improved
profitability.
During January-March, the arrival punctuality of scheduled passenger flights
fell by 6.4 per cent to 70.7 per cent (77.1%). Punctuality in February was
particularly weak, but there has been an improvement since then.
Leisure Traffic
This business area consists of Finnair Leisure Flights and the
Aurinkomatkat-Suntours package tour company as well as its Estonian tour
operator Horizon Travel, the St. Petersburg Calypso travel agency and the
takeOFF brand, which focuses on youth travel. Aurinkomatkat-Suntours is
Finland's leading tour operator, with a market share of 37 per cent. Finnair
Leisure Flights has a strong market leadership in leisure travel flights. The
unit has all the most notable Finnish tour operators as customers. The tour
operators buy for their use and at their own risk the flight series they wish to
holiday destinations for the whole summer or winter season.
In the first quarter, Finnair Leisure Flights carried 344,000 passengers, 19.4
per cent more than a year earlier. Performance calculated in passenger
kilometres rose 19.6 per cent. Leisure Flights' passenger load factor rose one
percentage point to 92.9 per cent.
Aurinkomatkat-Suntours' price level and result remained good in January-March,
particularly in the case of winter long-haul trips. The St. Petersburg travel
agency and tour operator Calypso AS, purchased at the beginning of the year, and
the tour operator Horizon Travel Oü, acquired in Estonia last year, are included
in the first quarter's figures, whereas they were not part of the comparison
period's figures.
Leisure Traffic's first quarter turnover rose by 19.5 per cent to 139.3 million
euros. Due to the rise in passenger load factor and more efficient use of
aircraft, Leisure Flights' result was good. The Leisure Traffic business area's
operational result doubled to 11.1 million euros (5.6 million).
Finnair has agreed fixed prices with tour operators and provided for the fuel
risk with price hedging in accordance with the Group's financial policy.
In April, nine Aurinkomatkat customers, who were travelling to the airport, lost
their lives in a bus accident near Malaga, Spain. In addition, a number of
travellers were injured in the accident, some seriously. In cooperation with
Aurinkomatkat, Finnair arranged the opportunity for relatives of the victims and
injured to travel to Malaga, where the injured were being treated in local
hospitals.
Aviation Services
This business area comprises aircraft maintenance services, ground handling and
the Group's catering operations. In addition, the Group's property holdings, the
procurement of office services, and the management and maintenance of properties
related to the Group's operational activities also belong to the Aviation
Services business area.
In the first quarter, Aviation Services' turnover fell 0.8 per cent to 109.9
million euros. The operational result weakened by 0.8 million euros and was a
profit of 2.5 million euros (3.3 million).
The Catering business is the most profitable of the Aviation Services. Finnair
Catering's operations were aversely affected by the move, completed in the first
quarter, to new production facilities in the area of Helsinki-Vantaa Airport.
Finnair Technical Services' result was slightly positive in the first quarter.
It is important for Finnair Technical Services' long-term functional capacity
and profitability that the unit also has customers from outside the Group. At
the end of last year, it was agreed, for example, that Technical Services would
handle the maintenance of the Russian airline Aeroflot's Boeing MD-11 cargo
fleet. The value of the eight-year contract is more than 200 million euros. The
commencement of the maintenance agreement has been delayed due to the Russian
authorities not yet permitting operations with the aircraft type in Russia.
The ground handling services company Northport Oy is still loss-making, even
though loss-making subsidiaries in Sweden and Norway were sold at the end of
2007. On the other hand, the quality of operations has improved. Moreover, the
amount of baggage left behind or lost has declined significantly during the
early part of the year. Northport's operations were adversely affected by the
move of its ground equipment centre in March. The move resulted in some traffic
delays and extra expenses.
Travel Services
The business area consists of the Group's travel agencies: Matkatoimisto Area,
Finland Travel Bureau and its subsidiary Estravel, which operates in the Baltic
states, as well as Amadeus Finland Oy, which integrates travel agency systems
and sells travel reservation systems.
The business area's turnover in January-March rose by 1.9 per cent to 21.1
million euros (20.7 million), but the operational result declined from 1.3
million the previous year to 0.4 million euros due to a lower price level and a
reduction in service fees. In the early part of the year, Finland Travel Bureau
has managed, however, to acquire significant new customer relationships, which
will be evident in sales later in the year.
Air Traffic Services and Products
In recent year, the Finnair route network has been developed to service traffic
between Europe and Asia passing through Helsinki. At the same time, Finns have
been offered efficient and diverse connections to destinations all over the
world.
Finnair has a total of 61 direct flights per week to ten Asian destinations. In
June the number of weekly flights to Asia will grow up to 65. A service began in
June 2007 to the newest destination, Mumbai in India, with a frequency of five
flights per week. In June 2008 the number of weekly flights to Mumbai will rise
to six, and at the same time Finnair will begin direct flights to the South
Korean capital Seoul. The Seoul route will be flown five times per week.
Finnair's other Asian destinations are Bangkok, Delhi, Hong Kong, Guangzhou,
Nagoya, Osaka, Beijing, Shanghai and Tokyo.
Finnair's long-haul strategy exploits Helsinki's ideal location on flight routes
between Asia and Europe. This competitive advantage also gives rise to the Via
Helsinki concept, a collaborative effort of Finnair and Finavia, which means the
shortest possible route, efficient and uncongested transit connections, new
kinds of airport services, and making travelling a pleasant experience. A
terminal extension at Helsinki-Vantaa Airport intended to service Asian traffic
in particular will open in late 2009.
Flights covering 45 European and 13 domestic destinations connect into Finnair's
Asia network. At the same time, a wide selection of direct connections are
offered from Finland to the rest of Europe. In January flights were added to
Warsaw, and in February to Vienna and Munich. In February plans to begin
scheduled flights from Helsinki to Yekaterinburg next autumn were announced.
During the early part of the year, Finnair also announced the opening of
additional flights to Paris, Moscow and St. Petersburg in April. Finnair will
then fly to Paris 35 times a week, and the number of Moscow flights will double
when Finnair and Aeroflot, from next April, cooperate in flying four times a day
between Helsinki and Moscow, i.e. 28 times per week. There will also be
additional flights to Manchester and Kiev from early summer.
Growth in Asian travel is also reflected in Leisure Flights. In the winter
season just ending, Leisure Flights operated 12 weekly flights to Asia,
including daily flights to Thailand. The Leisure Flights' fleet consists of
seven Boeing 757 aircraft and Airbus capacity leased from Scheduled Passenger
Traffic.
Short-term risks and uncertainty factors
Fuel costs are one of the most significant uncertainty factors where costs are
concerned. The price of oil has been at a record high during recent months. A
high degree of hedging and the relationship of the US dollar to the euro softens
the impact of the rising oil price, but fuel costs are expected to grow more
quickly than turnover.
A 10 per cent change in the price of oil increases the annual fuel bill by more
than 25 million euros with Finnair's degree of hedging. Correspondingly a 10 per
cent weakening of the US dollar against the euro improves the result by more
than 20 million euros on an annual basis with Finnair's degree of hedging.
A weakening in general economic conditions might slow growth of air travel. In
the airline industry, bookings extend only for a few weeks, so predicting the
result far into the future is difficult. The sensitivity of the result to
changes in the demand and price is significant. A change of one percentage point
in the load factor affects the annual result by more than 15 million euros.
Correspondingly a change of one percentage point in the average price also
affects the annual result by more than 15 million euros.
Negotiations to renew the collective employment agreement of pilots, which ends
on 30 April 2008, are under way.
Outlook
In 2008 Asian traffic capacity will grow by more than 20 per cent when two new
Airbus A340 aircraft join Finnair's long-haul fleet in the second and third
quarters. A standardised fleet will enhance the cost structure due to reduced
transfer training for flight staff and synergies in maintenance operations.
The price of fuel is expected to remain high and to exert pressure for ticket
price increases whenever the market situation permits. Fuel costs are expected
to be more than 23 per cent of turnover in 2008.
Demand is expected to continue to be moderate in the early part of the year.
Passenger load factors are expected to be slightly lower than last year's
figures, due to an expected slowing of European traffic growth and efforts to
increase the average price of flight tickets as fuel costs rise.
In terms of the timing of profit development, it is worth noting that Easter,
when fewer higher-priced business trips are made, fell this year in the first
quarter, when last year it was in the second quarter. This will improve
scheduled traffic unit revenues in April compared with last year.
Demand for leisure flights will continue to be strong, particularly in terms of
winter long-haul journeys. Finnair has signed an agreement with the UK airline
XL Airways on the lease of an Airbus A330-200 wide-bodied aircraft for non-stop
flights to Thailand next winter.
The Asian national economies are expected to continue to grow, so demand is
expected to remain strong in Finnair's Asian traffic. The anticipated slowing of
growth in the world economy is expected, as it continues, to also affect air
traffic demand. This will be evident particularly in the North American market,
which is, however, of minor significance for Finnair's traffic.
The profit impact of the 80 million restructuring programme implemented in
2006-2007 will be evident in full this year.
The operational result for the first half of the year is expected to be at the
previous year's level.
FINNAIR PLC
Board of Directors
FINNAIR GROUP INTERIM REPORT FOR JANUARY 1 -MARCH 31, 2008
KEY FIGURES EUR mill.
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| | 2008 | 2007 | Chan-ge | 2007 |
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| | 1 | 1 | % | 1 Jan- |
| | Jan- | Jan- | | 31 Dec |
| | 31 | 31 | | |
| | Mar | Mar | | |
--------------------------------------------------------------------------------
| Turnover | 576.5 | 528.5 | 9.1 | 2 180.5 |
--------------------------------------------------------------------------------
| Profit before depreciation and | 58.2 | 54.8 | 6.2 | 287.4 |
| lease payments, EBITDAR * | | | | |
--------------------------------------------------------------------------------
| Lease payments for aircraft | 20.4 | 21.7 | -6.0 | 81.2 |
--------------------------------------------------------------------------------
| Operating profit, EBIT* | 11.1 | 5.8 | 91.4 | 96.6 |
--------------------------------------------------------------------------------
| Fair value changes of | -0.1 | 6.0 | - | 14.5 |
| derivatives | | | | |
--------------------------------------------------------------------------------
| Profit from disposal of capital | 1.1 | 1.9 | - | 30.4 |
| assets | | | | |
--------------------------------------------------------------------------------
| Operating profit, EBIT | 12.1 | 13.7 | -11.7 | 141.5 |
--------------------------------------------------------------------------------
| Profit for the period (share | 5.5 | 9.3 | -40.9 | 101.6 |
| attributable to shareholders of | | | | |
| parent company) | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Operating profit, EBIT, % of | 1.9 | 1.1 | - | 4.4 |
| turnover * | | | | |
--------------------------------------------------------------------------------
| EBITDAR, % of turnover * | 10.1 | 10.4 | - | 13.2 |
--------------------------------------------------------------------------------
| Unit revenues of flight | 69.2 | 72.8 | -4.9 | 72.6 |
| operations c/RTK | | | | |
--------------------------------------------------------------------------------
| Unit costs of flight operations | 42.5 | 44.9 | -5.3 | 43.5 |
| c/ATK | | | | |
--------------------------------------------------------------------------------
| Earnings per share EUR (basic) | 0.05 | 0.10 | - | 1.04 |
--------------------------------------------------------------------------------
| Earnings per share EUR (diluted) | 0.05 | 0.10 | - | 1.04 |
--------------------------------------------------------------------------------
| Equity per share EUR | 7.58 | 6.93 | 9.4 | 7.70 |
--------------------------------------------------------------------------------
| Gross investment EUR mill. | 64.4 | 52.3 | - | 326.3 |
--------------------------------------------------------------------------------
| Gross investment, % of turnover | 11.2 | 9.9 | - | 15.0 |
--------------------------------------------------------------------------------
| Equity ratio % | 44.1 | 36.9 | | 47.0 |
--------------------------------------------------------------------------------
| Gearing % | -15.8 | 16.6 | | -22.5 |
--------------------------------------------------------------------------------
| Adjusted gearing % | 42.1 | 116.5 | | 35.1 |
--------------------------------------------------------------------------------
| Rolling 12-month ROCE % | 14.3 | -0.1 | | 14.2 |
--------------------------------------------------------------------------------
| Rolling 12-month ROE % | 12.5 | 2.0 | | 12.9 |
--------------------------------------------------------------------------------
* Excluding capital assets, fair value changes of derivatives and non-recurring
items.
Unit costs of flight operations c / ATK = Operating expenses (excluding fair
value changes of derivatives and non-recurring items) of Scheduled Traffic
business area and Leisure Flights business unit / ATK of Group.
CALCULATION OF KEY RATIOS
Earnings / share:
Profit for the period/
Average number of shares at the end of the financial year adjusted for share
issues
Equity / share:
Shareholders' equity/
Number of shares at the end of the financial year
adjusted for share issues
Gearing %:
Net interest bearing liabilities*100/
Shareholders' equity + minority interest
Return on capital employed % (ROCE):
Profit before taxes + interest and other financial expenses *100/
Balance sheet total - non-interest-bearing liabilities (average)
Net interest-bearing liabilities:
Interest-bearing liabilities - interest-bearing assets - listed shares
Equity ratio %:
Shareholders' equity + minority interest*100/
Balance sheet total - advances received
Return on equity %: (ROE)
Result *100/
Equity + minority interests (average)
Operating profit, EBIT = Operating profit excluding the disposal of the capital
assets, fair value changes of derivatives and non-recurring items
Shareholders equity = To equity holders of the parent
The figures of interim report have not been audited.
CONSOLIDATED INCOME STATEMENT (EUR mill.)
--------------------------------------------------------------------------------
| | 2008 | 2007 | Change | 2007 |
--------------------------------------------------------------------------------
| | 1 Jan | 1 Jan | % | 1 Jan- |
| | 31 Mar | 31 | | 30 Dec |
| | | Mar | | |
--------------------------------------------------------------------------------
| Turnover | 576.5 | 528.5 | 9.1 | 2 180.5 |
--------------------------------------------------------------------------------
| Work used for own purposes and | 0.1 | 0.8 | -87.5 | 3.0 |
| capitalized | | | | |
--------------------------------------------------------------------------------
| Other operating income | 5.9 | 5.9 | 0.0 | 52.8 |
--------------------------------------------------------------------------------
| Operating income | 582.5 | 535.2 | 8.8 | 2 236.3 |
--------------------------------------------------------------------------------
| Operating expenses | | | | |
--------------------------------------------------------------------------------
| Staff costs | 140.5 | 135.1 | 4.0 | 541.5 |
--------------------------------------------------------------------------------
| Fuel | 134.9 | 103.2 | 30.7 | 439.9 |
--------------------------------------------------------------------------------
| Lease payment for aircraft | 20.4 | 21.7 | -6.0 | 81.2 |
--------------------------------------------------------------------------------
| Other rental payments | 18.0 | 17.2 | 4.7 | 63.8 |
--------------------------------------------------------------------------------
| Fleet materials and overhauls | 19.7 | 22.2 | -11.3 | 76.7 |
--------------------------------------------------------------------------------
| Traffic charges | 43.6 | 43.7 | -0.2 | 177.0 |
--------------------------------------------------------------------------------
| Ground handling and catering | 35.2 | 36.5 | -3.6 | 154.3 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Expenses for tour operations | 44.6 | 35.8 | 24.6 | 120.6 |
--------------------------------------------------------------------------------
| Sales and marketing expenses | 27.1 | 19.4 | 39.7 | 92.0 |
--------------------------------------------------------------------------------
| Depreciation | 27.7 | 27.3 | 1.5 | 112.6 |
--------------------------------------------------------------------------------
| Other expenses | 58.7 | 59.4 | -1.2 | 235.2 |
--------------------------------------------------------------------------------
| Total | 570.4 | 521.5 | 9.4 | 2 094.8 |
--------------------------------------------------------------------------------
| Operating profit EBIT | 12.1 | 13.7 | - | 141.5 |
--------------------------------------------------------------------------------
| Financial income | 5.4 | 3.6 | 50.0 | 17.2 |
--------------------------------------------------------------------------------
| Financial expenses | -9.9 | -3.9 | 153.8 | -19.9 |
--------------------------------------------------------------------------------
| Share of result in associates | 0.0 | 0.0 | - | 0.1 |
--------------------------------------------------------------------------------
| Profit before taxes | 7.6 | 13.4 | - | 138.9 |
--------------------------------------------------------------------------------
| Direct taxes | -2.1 | -4.1 | - | -36.8 |
--------------------------------------------------------------------------------
| Profit for the period | 5.5 | 9.3 | - | 102.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share to | 5.5 | 9.3 | | 101.6 |
| shareholders of the parent | | | | |
| company | | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | 0.0 | | 0.5 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Earnings per share calculated | | | | |
| from profit attributable to | | | | |
| shareholders of the parent | | | | |
| company | | | | |
--------------------------------------------------------------------------------
| Earnings per share EUR (basic) | 0.05 | 0.10 | | 1.04 |
--------------------------------------------------------------------------------
| Earnings per share EUR | 0.05 | 0.10 | | 1.04 |
| (diluted) | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (EUR mill.)
--------------------------------------------------------------------------------
| | 31 March | 31 March | 31 Dec 2007 |
| | 2008 | 2007 | |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Intangible assets | 49.0 | 48.9 | 46.6 |
--------------------------------------------------------------------------------
| Tangible assets | 1 234.7 | 1 051.1 | 1 168.9 |
--------------------------------------------------------------------------------
| Investments in associates | 5.8 | 5.6 | 5.7 |
--------------------------------------------------------------------------------
| Financial assets | 12.9 | 15.3 | 13.8 |
--------------------------------------------------------------------------------
| Deferred tax receivables | 21.0 | 23.3 | 13.2 |
--------------------------------------------------------------------------------
| Total | 1 323.4 | 1 144.2 | 1 248.2 |
--------------------------------------------------------------------------------
| Short-term receivables | | | |
--------------------------------------------------------------------------------
| Inventories | 40.1 | 40.3 | 36.1 |
--------------------------------------------------------------------------------
| Trade receivables and other | 367.6 | 286.3 | 287.3 |
| receivables | | | |
--------------------------------------------------------------------------------
| Investments | 443.6 | 192.6 | 518.6 |
--------------------------------------------------------------------------------
| Cash and bank equivalents | 17.5 | 28.9 | 21.5 |
--------------------------------------------------------------------------------
| Total | 868.8 | 548.1 | 863.5 |
--------------------------------------------------------------------------------
| Non-current Assets held for | 32.8 | 7.6 | 34.7 |
| sale | | | |
--------------------------------------------------------------------------------
| Assets total | 2 225.0 | 1 699.9 | 2 146.4 |
--------------------------------------------------------------------------------
| SHAREHOLDERS´ EQUITY AND | | | |
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Capital and reserves | | | |
| attributable to equity holders | | | |
| of the parent company | | | |
--------------------------------------------------------------------------------
| Shareholders´equity | 75.4 | 75.4 | 75.4 |
--------------------------------------------------------------------------------
| Other equity | 890.3 | 538.4 | 909.9 |
--------------------------------------------------------------------------------
| Total | 965.7 | 613.8 | 985.3 |
--------------------------------------------------------------------------------
| Minority interest | 1.1 | 1.2 | 1.7 |
--------------------------------------------------------------------------------
| Equity, total | 966.8 | 615.0 | 987.0 |
--------------------------------------------------------------------------------
| Long-term liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liability | 150.1 | 116.2 | 143.4 |
--------------------------------------------------------------------------------
| Financial liabilities | 258.9 | 280.0 | 269.6 |
--------------------------------------------------------------------------------
| Pension obligations | 14.0 | 8.4 | 15.8 |
--------------------------------------------------------------------------------
| Total | 423.0 | 404.6 | 428.8 |
--------------------------------------------------------------------------------
| Short-term liabilities | | | |
--------------------------------------------------------------------------------
| Current income tax liabilities | 7.5 | 4.6 | 12.1 |
--------------------------------------------------------------------------------
| Reserves | 53.8 | 57.1 | 53.6 |
--------------------------------------------------------------------------------
| Financial liabilities | 55.2 | 50.0 | 54.5 |
--------------------------------------------------------------------------------
| Trade payables and other | 718.7 | 568.6 | 610.4 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Total | 835.2 | 680.3 | 730.6 |
--------------------------------------------------------------------------------
| Liabilities total | 1 258.2 | 1 084.9 | 1 159.4 |
--------------------------------------------------------------------------------
| Shareholders' equity and | 2 225.0 | 1 699.9 | 2 146.4 |
| liabilities, total | | | |
--------------------------------------------------------------------------------
SHAREHOLDERS´EQUITY EUR mill.
--------------------------------------------------------------------------------
| Equity attributable to shareholders of parent company | |
--------------------------------------------------------------------------------
| | Shar | New | Share | Bonu | Hedgi | Retai | Total | Mino- | Own |
| | e | iss | pre-m | s | ng | -ned | | rity | equity |
| | capi | ue | ium | issu | reser | ear-n | | inte- | total |
| | -tal | | accou | e | ve | ings | | rests | |
| | | | nt | | | | | | |
--------------------------------------------------------------------------------
| Share-h | 75.4 | 0.0 | 20.4 | 147. | -21.1 | 377.5 | 599.9 | 1.6 | 601.5 |
| olders´ | | | | 7 | | | | | |
| equity | | | | | | | | | |
| 1.1.200 | | | | | | | | | |
| 7 | | | | | | | | | |
--------------------------------------------------------------------------------
| Trans-l | | | | | | -0.3 | -0.3 | | -0.3 |
| ation | | | | | | | | | |
| differe | | | | | | | | | |
| nce | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividen | | | | | | -8.9 | -8.9 | -0.4 | -9.3 |
| d | | | | | | | | | |
| payment | | | | | | | | | |
--------------------------------------------------------------------------------
| Change | | | | | 13.8 | | 13.8 | | 13.8 |
| in fair | | | | | | | | | |
| value | | | | | | | | | |
| of | | | | | | | | | |
| hedging | | | | | | | | | |
| instrum | | | | | | | | | |
| ents | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | 9.3 | 9.3 | 0.0 | 9.3 |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-h | 75.4 | 0.0 | 20.4 | 147. | -7.3 | 377.6 | 613.8 | 1.2 | 615.0 |
| olders´ | | | | 7 | | | | | |
| equity | | | | | | | | | |
| 31 | | | | | | | | | |
| 3.2007 | | | | | | | | | |
--------------------------------------------------------------------------------
SHAREHOLDERS´EQUITY EUR mill.
--------------------------------------------------------------------------------
| | Sha | Sha | Sha | Bon | Hed- | Un-re | Re-t | Total | Mino | Own |
| | re | re | re | us | ging | s-tri | ai-n | | -rit | equit |
| | ca- | iss | pre | iss | re-s | c-ted | ed | | y | y |
| | pit | ue | -mi | ue | erve | equit | ear- | | inte | total |
| | al | | um | | | y | ning | | -res | |
| | | | ac- | | | | s | | ts | |
| | | | cou | | | | | | | |
| | | | nt | | | | | | | |
--------------------------------------------------------------------------------
| Share-h | 75. | 0.0 | 20. | 147 | 26.8 | 244.9 | 470. | 985.3 | 1.7 | 987.0 |
| olders´ | 4 | | 4 | .7 | | | 1 | | | |
| equity | | | | | | | | | | |
| 1.1.200 | | | | | | | | | | |
| 8 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transla | | | | | | | 0.1 | 0.1 | | 0.1 |
| tion | | | | | | | | | | |
| differe | | | | | | | | | | |
| nce | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividen | | | | | | | -31. | -31.8 | -0.6 | -32.4 |
| d | | | | | | | 8 | | | |
| payment | | | | | | | | | | |
--------------------------------------------------------------------------------
| Purchas | 0.0 | 0.0 | 0.0 | | | | -4.7 | -4.7 | | -4.7 |
| e of | | | | | | | | | | |
| own | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Change | | | | | 11.3 | | | 11.3 | | 11.3 |
| in fair | | | | | | | | | | |
| value | | | | | | | | | | |
| of | | | | | | | | | | |
| hedging | | | | | | | | | | |
| instrum | | | | | | | | | | |
| ents | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | | 5.5 | 5.5 | 0.0 | 5.5 |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-h | 75. | 0.0 | 20. | 147 | 38.1 | 244.9 | 439. | 965.7 | 1.1 | 966.8 |
| olders´ | 4 | | 4 | .7 | | | 2 | | | |
| equity | | | | | | | | | | |
| 31.3.20 | | | | | | | | | | |
| 08 | | | | | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| EUR mill. | 1 Jan - 31 | 1 Jan - 3Mar | 1 Jan - 31 |
| | Mar 2008 | 2007 | Dec 2007 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flow from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Profit for the period | 5.5 | 9.3 | 102.1 |
--------------------------------------------------------------------------------
| Operations for which a payment is | 24.4 | 24.2 | 100.0 |
| not included 1) | | | |
--------------------------------------------------------------------------------
| Interest and other financial | 9.9 | 3.9 | 19.9 |
| expenses | | | |
--------------------------------------------------------------------------------
| Interest income | -5.4 | -2.4 | -11.9 |
--------------------------------------------------------------------------------
| Other financial income | 0.0 | -1.2 | -5.1 |
--------------------------------------------------------------------------------
| Dividend income | 0.0 | 0.0 | -0.2 |
--------------------------------------------------------------------------------
| Taxes | 2.1 | 4.1 | 36.8 |
--------------------------------------------------------------------------------
| Changes in working capital: | | | |
--------------------------------------------------------------------------------
| Change in trade and other | -60.2 | -74.2 | 2.4 |
| receivables | | | |
--------------------------------------------------------------------------------
| Change in inventories | -4.0 | -1.9 | 2.4 |
--------------------------------------------------------------------------------
| Change in accounts payables and | 58.3 | 44.8 | 86.4 |
| other liabilities | | | |
--------------------------------------------------------------------------------
| Interest paid | -3.2 | -3.5 | -14.6 |
--------------------------------------------------------------------------------
| Paid financial expenses | -0.2 | -0.2 | -2.3 |
--------------------------------------------------------------------------------
| Received interest | 2.3 | 1.8 | 9.6 |
--------------------------------------------------------------------------------
| Received financial income | 0.0 | 1.0 | 0.5 |
--------------------------------------------------------------------------------
| Taxes paid | -0.8 | -5.1 | -24.2 |
--------------------------------------------------------------------------------
| Net cash flow from operating | 28.7 | 0.6 | 301.8 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flow from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Sell of subsidiaries, net cash | 0.0 | 0.0 | 0.6 |
| sold | | | |
--------------------------------------------------------------------------------
| Acquisitions of subsidiaries | -2.5 | 0.0 | -0.6 |
--------------------------------------------------------------------------------
| Investments in intangible assets | -3.4 | -3.6 | -15.4 |
--------------------------------------------------------------------------------
| Investments in tangible assets | -91.6 | -64.7 | -346.2 |
--------------------------------------------------------------------------------
| Net Change of shares classified | 50.4 | 9.8 | -205.6 |
| as available for sale | | | |
--------------------------------------------------------------------------------
| Sales of tangible fixed assets | 6.4 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Net Change of shares classified | 3.6 | 0.8 | 65.2 |
| as available for sale | | | |
--------------------------------------------------------------------------------
| Received dividends | 0.0 | 0.0 | 0.2 |
--------------------------------------------------------------------------------
| Change in non-current receivable | 0.9 | 0.2 | 1.7 |
--------------------------------------------------------------------------------
| Net cash flow from investing | -36.2 | -57.5 | -500.1 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Loan withdrawals | 1.4 | 6.9 | 95.6 |
--------------------------------------------------------------------------------
| Loan repayments and changes | -11.4 | -13.0 | -115.0 |
--------------------------------------------------------------------------------
| Share issue | 0.0 | 0.0 | 244.9 |
--------------------------------------------------------------------------------
| Purchase of own shares | -4.7 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Dividends paid | 0.0 | 0.0 | -8.9 |
--------------------------------------------------------------------------------
| Net cash flow from financing | -14.7 | -6.1 | 216.6 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash flows | -22.2 | -63.0 | 18.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in liquid funds | | | |
--------------------------------------------------------------------------------
| Liquid funds, at beginning | 291.8 | 273.5 | 273.5 |
--------------------------------------------------------------------------------
| Change in cash flows | -22.2 | -63.0 | 18.3 |
--------------------------------------------------------------------------------
| Liquit funds, in the end | 269.6 | 210.5 | 291.8 |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| EUR mill. | 1 Jan - 31 | 1 Jan - 31 | 1 Jan - 31 |
| | Mar 2008 | Mar 2007 | Dec 2007 |
--------------------------------------------------------------------------------
| Notes to consolidated cash flow | | | |
| statement | | | |
--------------------------------------------------------------------------------
| 1) Operations for which a payment is | | | |
| not included | | | |
--------------------------------------------------------------------------------
| Depreciation | 27.7 | 27.3 | 112.6 |
--------------------------------------------------------------------------------
| Employee benefits | -1.8 | -1.6 | 6.8 |
--------------------------------------------------------------------------------
| Other adjustments | -1.5 | -1.5 | -19.4 |
--------------------------------------------------------------------------------
| Total | 24.4 | 24.2 | 100.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial asset at fair value | 443.6 | 192.6 | 518.6 |
--------------------------------------------------------------------------------
| Liquid funds | 17.5 | 28.9 | 21.5 |
--------------------------------------------------------------------------------
| Short-term cash and cash equivalents | 461.1 | 221.5 | 540.1 |
| in balance sheet | | | |
--------------------------------------------------------------------------------
| Maturing after more than 3 months | -172.3 | -8.1 | -222.7 |
--------------------------------------------------------------------------------
| Shares held to trading purposes | -19.2 | -2.9 | -25.6 |
--------------------------------------------------------------------------------
| Total in cash flow statement | 269.6 | 210.5 | 291.8 |
--------------------------------------------------------------------------------
NOTES TO THE CONSOLIDATED INTERIM REPORT
1. BASIS OF PREPARATION
This consolidated interim report has been prepared according to the
International (IAS) Standard 34: Interim Financial Reporting, which has been
introduced in the EU.
2. ACCOUNTING PRINCIPLES
The accounting principles adhered to in the interim report are consistent with
the principles adhered to in the 2007 consolidated financial statements,
excluding the changes listed below.
The following new standards, changes to standards and the application of
interpretations which are perceived to be essential for the Group have been
introduced from the beginning of 2008:
- IFRIC 11, Group and treasury share transactions' provides guidance on whether
share-based transactions involving treasury shares or involving group entities
should be accounted for as equity settled or cash-settled share-based payment
transactions in the stand-alone accounts of the parent and group companies. This
interpretation does not have any impact on the group's financial statements.
The following new standards and interpretations effective in 2008 are not
relevant to the group's operations:
- IFRIC 12, ‘Service Concession Arrangements' applies to contractual
arrangements whereby a private sector operator participates in the development,
financing, operation and maintenance of infrastructure for public sector
services.
- IFRIC 14, ‘IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction' is applied to post-employment defined
benefit plans and other long-term defined benefit plans under IAS 19, if the
plan includes minimum funding requirements. The interpretation also clarifies
the criteria for recognition of an asset on future refunds or reductions in
future contributions. The revision, amendment or interpretation to published
standards is still subject to endorsement by the European Union.
These new, introduced standards and interpretations have no substantial impact
on reporting in the income statement, balance sheet and notes.
3. CRITICAL FINANCIAL STATEMENT ESTIMATES AND ASSUMPTIONS
The preparation of interim reports requires the company's management to make
estimates and assumptions that influence the levels of reported assets and
liabilities as well as of revenue and expenses. Realised results might differ
from these estimates.
In connection with the preparation of this interim report, the significant
estimates made by management relating to the consolidated accounting principles
and the key uncertainty factors are the same as those applied in the 2007 annual
financial statements.
4. SEGMENT INFORMATION
The business segments, Scheduled Passenger,Traffic, Leisure Traffic, Aviation
Services and Travel Services, are the primary reporting format. The geographical
segments, Finland, Europe, Asia, North America and Others, are the secondary
reporting format. Segment information will based on the corresponding
information reported in the financial statement.
PRIMARY REPORTING FORMAT - BUSINESS SEGMENT DATA 1 January - 31 March 2008
--------------------------------------------------------------------------------
| | Schedu | Leisu | Aviati | Travel | Group | Unallo | Group |
| | led | re | on | Servic | eliminat | -cated | |
| | Passen | Traff | Servic | es | ions | items | |
| | ger | ic | es | | | | |
| | Traffi | | | | | | |
| | c | | | | | | |
--------------------------------------------------------------------------------
| EUR mill. | | | | | | | |
--------------------------------------------------------------------------------
| External | 392.0 | 138.1 | 26.5 | 19.9 | | | 576.5 |
| turnover | | | | | | | |
--------------------------------------------------------------------------------
| Internal | 31.2 | 1.2 | 83.4 | 1.2 | -117.0 | | 0.0 |
| turnover | | | | | | | |
--------------------------------------------------------------------------------
| Turnover | 423.2 | 139.3 | 109.9 | 21.1 | -117.0 | 0.0 | 576.5 |
--------------------------------------------------------------------------------
| Operating | 1.7 | 11.1 | 2.6 | 0.4 | | -3.7 | 12.1 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Share of | | | | | | 0.0 | 0.0 |
| results of | | | | | | | |
| associated | | | | | | | |
| undertaking | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Financial | | | | | | 5.4 | 5.4 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financial | | | | | | -9.9 | -9.9 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | | | | | | -2.1 | -2.1 |
--------------------------------------------------------------------------------
| Minority | | | | | | 0.0 | 0.0 |
| interest | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | | | 5.5 |
| the period | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Other items | | | | | | | |
--------------------------------------------------------------------------------
| Investments | 46.4 | 0.1 | 17.7 | 0.2 | 0.0 | 0.0 | 64.4 |
--------------------------------------------------------------------------------
| Depreciatio | 19.6 | 0.1 | 7.3 | 0.4 | 0.0 | 0.3 | 27.7 |
| n | | | | | | | |
--------------------------------------------------------------------------------
PRIMARY REPORTING FORMAT - BUSINESS SEGMENT DATA 1 January- 31 March 2007
--------------------------------------------------------------------------------
| | Schedu | Leisu | Aviati | Travel | Group | Unallo-c | Group |
| | led | re | on | Servic | eli-min | ated | |
| | Passen | Traff | Servic | es | ations | items | |
| | ger | ic | es | | | | |
| | Traffi | | | | | | |
| | c | | | | | | |
--------------------------------------------------------------------------------
| EUR mill. | | | | | | | |
--------------------------------------------------------------------------------
| External | 361.5 | 115.4 | 32.3 | 19.3 | | | 528.5 |
| turnover | | | | | | | |
--------------------------------------------------------------------------------
| Internal | 29.7 | 1.2 | 78.5 | 1.4 | -110.8 | | 0.0 |
| turnover | | | | | | | |
--------------------------------------------------------------------------------
| Turnover | 391.2 | 116.6 | 110.8 | 20.7 | -110.8 | 0.0 | 528.5 |
--------------------------------------------------------------------------------
| Operating | 0.7 | 5.6 | 4.1 | 1.3 | | 2.0 | 13.7 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Share of | | | | | | 0.0 | 0.0 |
| results of | | | | | | | |
| associated | | | | | | | |
| undertaking | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Financial | | | | | | 3.6 | 3.6 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financial | | | | | | -3.9 | -3.9 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | | | | | | -4.1 | -4.1 |
--------------------------------------------------------------------------------
| Minority | | | | | | 0.0 | 0.0 |
| interest | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | | | 9.3 |
| the period | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Other items | | | | | | | |
--------------------------------------------------------------------------------
| Investments | 41.0 | 0.1 | 9.1 | 1.0 | 0.0 | 1.1 | 52.3 |
--------------------------------------------------------------------------------
| Depreciatio | 20.1 | 0.1 | 6.4 | 0.4 | 0.0 | 0.3 | 27.3 |
| n | | | | | | | |
--------------------------------------------------------------------------------
TURNOVER
--------------------------------------------------------------------------------
| | 2008 | 2007 | Change | 2007 |
--------------------------------------------------------------------------------
| | 1 Jan- | 1 Jan | % | 1 Jan- |
| | 31 | 31 | | 31 |
| | Mar | Mar | | Dec |
--------------------------------------------------------------------------------
| EUR mill. | | | | |
--------------------------------------------------------------------------------
| Scheduled | 423.2 | 391.2 | 8.2 | 1 685.3 |
| Passenger Traffic | | | | |
--------------------------------------------------------------------------------
| Leisure Traffic | 139.3 | 116.6 | 19.5 | 409.6 |
--------------------------------------------------------------------------------
| Aviation Services | 109.9 | 110.8 | -0.8 | 433.9 |
--------------------------------------------------------------------------------
| Travel Services | 21.1 | 20.7 | 1.9 | 82.3 |
--------------------------------------------------------------------------------
| Group eliminations | -117.0 | -110.8 | 5.6 | -430.6 |
--------------------------------------------------------------------------------
| Total | 576.5 | 528.5 | 9.1 | 2 180.5 |
--------------------------------------------------------------------------------
OPERATING PROFIT EXCLUDING THE DISPOSAL OF THE CAPITAL ASSETS AND FAIR VALUE
CHANGES OF DERIVATIVES AND NON-RECURRING ITEMS
--------------------------------------------------------------------------------
| | 2008 | 2007 | Change | 2007 |
--------------------------------------------------------------------------------
| | 1 Jan- | 1 Jan | % | 1 Jan- |
| | 31 | 31 | | 31 |
| | Mar | Mar | | Dec |
--------------------------------------------------------------------------------
| EUR mill. | | | | |
--------------------------------------------------------------------------------
| Scheduled Passenger | -0.4 | -0.3 | 33.3 | 76.2 |
| Traffic | | | | |
--------------------------------------------------------------------------------
| Leisure Traffic | 11.1 | 5.6 | 98.2 | 24.2 |
--------------------------------------------------------------------------------
| Aviation Services | 2.5 | 3.3 | -24.2 | 10.3 |
--------------------------------------------------------------------------------
| Travel Services | 0.4 | 1.3 | -69.2 | 2.9 |
--------------------------------------------------------------------------------
| Unallocated items | -2.5 | -4.1 | -39.0 | -17.0 |
--------------------------------------------------------------------------------
| Total | 11.1 | 5.8 | 91.4 | 96.6 |
--------------------------------------------------------------------------------
EMPLOYEES AVERAGE BY SEGMENT
--------------------------------------------------------------------------------
| | 2008 | 2007 | Change |
--------------------------------------------------------------------------------
| | 1 Jan- | 1 Jan- | % |
| | 31 Mar | 31 Mar | |
--------------------------------------------------------------------------------
| Scheduled Passenger Traffic | 4 168 | 4 121 | 1.1 |
--------------------------------------------------------------------------------
| Leisure Traffic | 463 | 355 | 30.4 |
--------------------------------------------------------------------------------
| Aviation Services | 3 540 | 3 649 | -3.0 |
--------------------------------------------------------------------------------
| Travel Services | 1 102 | 1 131 | -2.6 |
--------------------------------------------------------------------------------
| Other functions | 153 | 156 | -1.9 |
--------------------------------------------------------------------------------
| Finnair Group Total | 9 426 | 9 412 | 0.1 |
--------------------------------------------------------------------------------
SECONDARY REPORTING FORMAT - GEOGRAPHICAL SEGMENTS
TURNOVER OUTSIDE THE GROUP BY SALES DESTINATION
--------------------------------------------------------------------------------
| | 2008 | 2007 | Change | 2007 |
--------------------------------------------------------------------------------
| | 1 Jan- | 1 Jan- | % | 1 Jan- |
| | 31 Mar | 31 | | 31 |
| | | Mar | | Dec |
--------------------------------------------------------------------------------
| EUR mill. | | | | |
--------------------------------------------------------------------------------
| Finland | 122.6 | 108.2 | 13.3 | 419.7 |
--------------------------------------------------------------------------------
| Europe | 225.5 | 232.9 | -3.2 | 992.8 |
--------------------------------------------------------------------------------
| Asia | 188.1 | 148.0 | 27.1 | 626.3 |
--------------------------------------------------------------------------------
| North America | 11.5 | 11.3 | 1.8 | 63.2 |
--------------------------------------------------------------------------------
| Others | 28.8 | 28.1 | 2.5 | 78.5 |
--------------------------------------------------------------------------------
| Total | 576.5 | 528.5 | 9.1 | 2 180.5 |
--------------------------------------------------------------------------------
5. MANAGEMENT OF FINANCIAL RISKS
No significant changes have been made to the Group's risk management principles
in the reporting period. The objectives and principles of risk management are
consistent with information presented in the Group's 2007 Annual Report.
The tables below present the nominal value or the amount and net fair value of
derivative contracts used in the Group's hedge accounting.
DERIVATIVE CONTRACTS EUR mill.
--------------------------------------------------------------------------------
| Derivative | 31 March 2008 | 31 March 2007 | 31 Dec 2007 |
| contracts | | | |
--------------------------------------------------------------------------------
| Currency | Nominal | Fair | Nominal | Fair | Nominal | Fair |
| derivatives | value | value | value | value | value | value |
| | (EUR | (EUR | (EUR | (EUR | (EUR | (EUR |
| | mill.) | mill.) | mill.) | mill.) | mill.) | mill.) |
--------------------------------------------------------------------------------
| Hedge | | | | | | |
| accounting | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| Forward | 279.3 | -30.3 | 270.0 | -8.5 | 267.0 | -20.0 |
| contracts, | | | | | | |
| Jet Fuel | | | | | | |
| currency | | | | | | |
| hedging | | | | | | |
--------------------------------------------------------------------------------
| Forward | 461.2 | -34.4 | 455.6 | -9.5 | 463.0 | -16.9 |
| contracts, | | | | | | |
| Hedging of | | | | | | |
| Aircraft | | | | | | |
| purchace | | | | | | |
| price | | | | | | |
--------------------------------------------------------------------------------
| Forward | 52.0 | -5.6 | 59.0 | -1.4 | 56.3 | -3.9 |
| contracts, | | | | | | |
| Currency | | | | | | |
| hedging of | | | | | | |
| lease | | | | | | |
| payments | | | | | | |
--------------------------------------------------------------------------------
| Total | 792.5 | -70.3 | 784.6 | -19.4 | 786.3 | -40.8 |
--------------------------------------------------------------------------------
| Currency | 44.4 | -1.5 | 9.4 | -0.4 | 2.7 | 0.0 |
| derivatives | | | | | | |
| at fair value | | | | | | |
| through | | | | | | |
| profit or | | | | | | |
| loss | | | | | | |
--------------------------------------------------------------------------------
| Operating | | | | | | |
| cash (flow | | | | | | |
| hedging) | | | | | | |
--------------------------------------------------------------------------------
| Operational | 61.8 | -2.0 | 83.6 | -0.3 | 54.3 | 0.1 |
| cash flow | | | | | | |
| hedging | | | | | | |
| (options) | | | | | | |
--------------------------------------------------------------------------------
| Call options | 60.2 | 0.3 | 41.3 | 0.0 | 64.5 | -0.6 |
--------------------------------------------------------------------------------
| Balance sheet | 67.1 | -1.7 | 41.3 | 0.0 | 47.2 | -0.6 |
| hedging | | | | | | |
| (forward | | | | | | |
| contracts) | | | | | | |
--------------------------------------------------------------------------------
| Total | 233.5 | -4.9 | 175.6 | -0.7 | 168.7 | -1.1 |
--------------------------------------------------------------------------------
| Currency | 1 026.0 | -75.2 | 960.2 | -20.1 | 955.0 | -41.9 |
| derivatives, | | | | | | |
| total | | | | | | |
--------------------------------------------------------------------------------
| | 31 March 2008 | 31 March 2007 | 31 Dec 2007 |
--------------------------------------------------------------------------------
| | Nominal | Fair | Nominal | Fair | Nominal | Fair |
| | value | value | value | value | value | value |
| | (tonnes) | (EUR | (tonnes) | (EUR | (tonnes) | (EUR |
| | | mill.) | | mill.) | | mill.) |
--------------------------------------------------------------------------------
| Commodity | | | | | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Hedge | | | | | | |
| accounting | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| Jet Fuel | 567 750 | 85.8 | 534 800 | 4.1 | 562 750 | 55.3 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity | | | | | | |
| derivatives | | | | | | |
| at fair value | | | | | | |
| through | | | | | | |
| profit or | | | | | | |
| loss | | | | | | |
--------------------------------------------------------------------------------
| Jet Fuel | 14 000 | 1.9 | 51 400 | -1.1 | 11 100 | 0.6 |
| Forward | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Gasoil | 12 500 | 0.9 | 15 000 | 0.7 | 21 900 | 2.7 |
| forward | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Jet | 439 000 | 0.1 | 184 500 | 0.0 | 395 000 | 1.1 |
| differential | | | | | | |
| forward | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | | |
--------------------------------------------------------------------------------
| Jet Fuel call | 72 500 | 5.3 | 47 000 | 0.5 | 64 500 | 2.0 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Jet Fuel put | 76 000 | -0.5 | 94 000 | -0.4 | 76 000 | -0.7 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Gasoil call | 57 500 | 3.0 | 45 000 | 0.8 | 48 500 | 3.1 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Gasoil put | 104 500 | -0.2 | 81 000 | -0.7 | 86 500 | -0.5 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Total | | 96.3 | | 3.9 | | 63.5 |
--------------------------------------------------------------------------------
| | 31 March 2008 | 31 March 2007 | 31 Dec 2007 |
--------------------------------------------------------------------------------
| | Nominal | Fair | Nominal | Fair | Nominal | Fair |
| | value | value | value | value | value | value |
| | (EUR | (EUR | (EUR | (EUR | (EUR | (EUR |
| | mill.) | mill.) | mill.) | mill.) | mill.) | mill.) |
--------------------------------------------------------------------------------
| Interest rate | | | | | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Cross | | | | | | |
| currency | | | | | | |
| Interest rate | | | | | | |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Hedge | 22.0 | -13.2 | 38.5 | -14.1 | 26.9 | -13.6 |
| accounting | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| Cross | 13.3 | -10.0 | 20.6 | -10.3 | 15.4 | -10.1 |
| currency | | | | | | |
| interest rate | | | | | | |
| swaps at fair | | | | | | |
| value through | | | | | | |
| profit or | | | | | | |
| loss | | | | | | |
--------------------------------------------------------------------------------
| Total | 35.3 | -23.2 | 59.1 | -24.4 | 42.3 | -23.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate | | | | | | |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Hedge | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| accounting | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | 20.0 | 0.7 | 20.0 | 1.0 | 20.0 | 0.9 |
| swaps at fair | | | | | | |
| value through | | | | | | |
| profit or | | | | | | |
| loss | | | | | | |
--------------------------------------------------------------------------------
| Total | 20.0 | 0.7 | 20.0 | 1.0 | 20.0 | 0.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share | | | | | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Shares | | | | | | |
--------------------------------------------------------------------------------
| Call options, | 15.9 | 3.0 | 0.0 | 0.0 | 16.1 | 8.4 |
| share | | | | | | |
--------------------------------------------------------------------------------
6. COMPANY ACQUISITIONS AND SALES
On 23 October 2007, the Group subsidiary Oy Aurinkomatkat - Suntours Ltd Ab
signed an agreement by which it purchased a majority shareholding of all three
Russian companies belonging to the Calypso Group. 80 per cent of the share stock
and control was transferred in January 2008, at which time the company became
part of the Group. The gross investment in the shares was 2.5 million euros.
7. INCOME TAXES
Income taxes have been entered in the income statement using the tax rates that
will be applied to the expected total profit for the year.
8. DIVIDEND PER SHARE
The Annual General Meeting decided on 27 March 2008 to distribute a dividend of
0.25 euros per share. The total dividend was 31.9 million euros, based on the
number of shares registered on 1 April 2008. The dividend was paid on 7 April
2008.
9. CHANGE IN INTANGIBLE AND TANGIBLE ASSETS EUR mill.
--------------------------------------------------------------------------------
| | 31 March | 31 March | 31 Dec |
| | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Carrying amount at beginning of | 1 250.2 | 1 067.4 | 1 067.4 |
| period | | | |
--------------------------------------------------------------------------------
| Fixed asset investments | 66.9 | 52.3 | 326.3 |
--------------------------------------------------------------------------------
| Change in advances | 30.7 | 19.9 | 35.8 |
--------------------------------------------------------------------------------
| Disposals | -3.6 | -4.7 | -66.7 |
--------------------------------------------------------------------------------
| Depreciation | -27.7 | -27.3 | -112.6 |
--------------------------------------------------------------------------------
| Carrying amount at end of period | 1 316.5 | 1 107.6 | 1 250.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Proportion of assets held for sale | 34,7 | 7.6 | 7.6 |
| at beginning of period | | | |
--------------------------------------------------------------------------------
| Proportion of assets held for sale | 32,8 | 7.6 | 34.7 |
| at end of period | | | |
--------------------------------------------------------------------------------
10. INTEREST-BEARING LIABILITIES
In the first quarter of 2008, Group loans were repaid in accordance with a
repayment programme. The rest of the loan transactions presented in the accounts
relate to old secured loans, which owing to their exceptional agreement
structure have a net repayment entered gross both as a withdrawal and a
repayment.
11. CONTINGENT LIABILITIES EUR mill.
--------------------------------------------------------------------------------
| | 31 March | 31 March | 31 Dec |
| | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Other contingent liabilities | | | |
--------------------------------------------------------------------------------
| Pledges on own behalf | 250.8 | 234.7 | 263.1 |
--------------------------------------------------------------------------------
| Guarantees on group undertakings | 67.5 | 65.6 | 67.5 |
--------------------------------------------------------------------------------
| Total | 318.3 | 300.3 | 330.6 |
--------------------------------------------------------------------------------
Investment commitments for property, plant and equipment on 31 March 2008
totalled 1,263.1 million euros (31 December 2007: 1,311.1 million euros)
12. LIABILITIES (EUR million)
--------------------------------------------------------------------------------
| | 31 March | 31 March | 31 Dec |
| | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Fleet lease payment liabilities | 299.1 | 367.3 | 324.8 |
--------------------------------------------------------------------------------
| Other liabilities | 239.0 | 169.9 | 177.7 |
--------------------------------------------------------------------------------
| Total | 538.1 | 537.2 | 502.5 |
--------------------------------------------------------------------------------
13. RELATED PARTY TRANSACTIONS
Related party transactions are presented in Finnair's 2007 Annual Report. There
have been no substantial changes after the closing date.
Transactions and open balances with associated undertakings were of very minor
significance in the reporting period.
14. AIR TRAFFIC 1 January - 31 March 2008
--------------------------------------------------------------------------------
| | Total | Europ | Nort | Asia | Domes- | Schedu- | Leisu | Cargo |
| | traff | e | h | | tic | led | re | |
| | ic | | Am | | | Traf-fi | | |
| | | | eric | | | c Total | | |
| | | | a | | | | | |
--------------------------------------------------------------------------------
| Passengers | 2 023 | 880 | 28 | 304 | 466 | 1 679 | 344 | |
| (1000) | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | -7.7 | -17.2 | 3.2 | 18.3 | -16.0 | -11.8 | 19.4 | |
--------------------------------------------------------------------------------
| Cargo and | 25 | 5 361 | 1 | 16 | 747 | 24 141 | 107 | 25 |
| mail | 167 | | 563 | 470 | | | | 167 |
| (tonnes) | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | 15.9 | 4.4 | 1.1 | 36.1 | -19.7 | 22.5 | -9.9 | 15.9 |
--------------------------------------------------------------------------------
| Available | 7 515 | 1 945 | 229 | 2 973 | 457 | 5 604 | 1 911 | |
| seat-kilom | | | | | | | | |
| etres mill | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | 13.9 | -1.6 | 0.7 | 30.3 | -7.9 | 12.5 | 18.3 | |
--------------------------------------------------------------------------------
| Revenue | 5 626 | 1 187 | 186 | 2 201 | 277 | 3 851 | 1 775 | |
| passenger | | | | | | | | |
| kilometres | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | 12.5 | -5.3 | 3.2 | 23.4 | -8.1 | 9.5 | 19.6 | |
--------------------------------------------------------------------------------
| Passenger | 74.9 | 61.0 | 81.3 | 74.0 | 60.5 | 68.7 | 92.9 | |
| load | | | | | | | | |
| factor % | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | -1.0 | -2.3 | 2.0 | -4.2 | -0.1 | -1.9 | 1.0 | |
--------------------------------------------------------------------------------
| Available | 1 119 | | | | | | | 242 |
| tonne-kilo | | | | | | | | |
| metres | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | 14.7 | | | | | | | 18.1 |
--------------------------------------------------------------------------------
| Revenue | 647 | | | | | | | 143 |
| tonne-kilo | | | | | | | | |
| metres | | | | | | | | |
| mill | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | 14.6 | | | | | | | 22.5 |
--------------------------------------------------------------------------------
| Overall | 57.8 | | | | | | | 58.9 |
| load | | | | | | | | * |
| factor % | | | | | | | | |
--------------------------------------------------------------------------------
| %-change | 0.0 | | | | | | | 2.1 |
--------------------------------------------------------------------------------
* Operational calculatory capacity
15. EVENTS AFTER THE REVIEW PERIOD
The Finnair Group's Finnair Aircraft Finance Oy has on 11 April 2008 sold the
six Boeing MD-80 aircraft and three spare engines it owns to the Allegiant
Travel Company's low-cost carrier Allegiant Air. Last year Finnair recognised
excess depreciation amounting three million euros for the aircraft now sold, so
the aircraft sales are not expected to have any significant impact on Finnair's
result.
