Results are "sad reading" - Hienonen
Finnair predicted a full-year loss today (April 28) after first quarter results revealed a 10% decline in turnover to €515.7m.
The struggling airline reported a €47.5m operating loss for the three months to March 31 while revenue from flight operations declined 9.1%.
"The figures for our sector make for sad reading wherever one looks. The demand base and price levels have softened and it is proving difficult to find solid ground underfoot," Finnair's president and ceo Jukka Hienonen said.
"Airlines have adopted defence positions and are trying to adjust to the situation as best they can."
Mr Hienonen said there was little "no prospect" of a full-year profit as price levels collapse and demand continues to weaken.
Capacity was cut 6% in response to a 5% decline in passenger demand, resulting in a steady load factor year-on-year.
"We are adjusting to the present situation by cutting our capacity and costs without," Mr Hienonen said.
"We capacity cuts at the end of last year, but cost flexibility, particularly in scheduled passenger traffic, is poor."
Finnair recently announced a €100m cost cutting programme, half of which will result from staff cuts.
The airline said around 600 jobs had been "permanently cut" and more than 6,000 lay-offs are expected.
Mr Hienonen said: "The programmes initiated will bring relief to the cost side with a delay. In cutting personnel expenses we have used mainly lay-offs, whose impact on costs is faster than redundancies.
"However, continuing structural reforms are also needed to allow us to build future success."
Despite the poor results and staff cuts, Finnair said it plans to go ahead with a €400m fleet renewal this year.
"Our funding for this year has been safeguarded," Mr Hienonen said.