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Results hit by high fuel price in 2008
Finnair is the latest airline to report a full year operating loss caused by the high oil prices seen in 2008.
The carrier recorded an operating loss of €52.1m, a significant difference compared to the €141.5m profit made in 2007.
Finnair said expensive fuel and cheap flight tickets had "undermined profitability" resulting in a fall in flight operations revenue of 3.5%.
Jukka Hienonen, Finnair's president and ceo, said:
"The airline industry's profitability weakened rapidly during 2008. We enter the new year 2009 facing the most gloomy outlook for some time.
"Both passenger and cargo demand fell strongly at the end of last year. Forecasts suggest that the trend will continue this year.
"Not all airlines will survive. The industry will experience an unprecedented thinning out. Large mergers and acquisitions have already happened in Europe.
"Finnair's situation as this relegation battle begins is stronger than many others. The company's balance sheet and cash position are strong and its strategy is working.
"We are not, however, immune to powerful changes in the market situation."
While passenger traffic grew 7.8% compared to 2007, the load factor, a measure of capacity, fell 0.3% to 75.2%.
Finnair's operational result, or EBIT excluding non-recurring items, capital gains and changes in the fair value of derivatives, fell from €96.6m in 2007to €6.6m last year, or 0.3% of turnover.
The airline's gearing, a ratio of capital against borrowed funds, stood at -11.6% not taking into account leasing liabilities.