Finnair has warned it expects to report an overall loss for 2009, after the group's turnover fell by 18.5% to €1.838m. The airline's traffic fell by 9% in 2009, and it made a loss before tax of €134m.
Finnair's CEO Mika Vehviläinen said the predicted loss was a result of overcapacity and a decline in business travel.
"2009 was a historically difficult year for the whole of air transport. For Finnair the situation was made particularly difficult by a sharp fall in demand in Finland as well as price competition, resulting from overcapacity in the sector, on many of our main routes
"The decline in price level resulted to a large extent from a reduction in business travel and a shift to cheaper price classes. In an airline, it is hard to cut costs to match falling revenues."
The average price of flight tickets fell by 12% last year, while Finnair's passenger numbers flights fell by 10%, to under 7.5 million.
Finnair maintained a load factor of 76%, by cutting capacity.
The airline has seen some signs of improvement, however. "Positive signs are perceptible in increased demand, particularly in business travel and in cargo in markets outside
Finland. We will continue implementing the Europe-Asia strategy," said Vehviläinen.
Finnair is marketing itself as a faster option from Europe to Asia, as it claims it flies a shorter route via the Arctic circle.
www.finnair.com