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Finnair is expecting to make a “significant loss” this year due to a weak economy and tougher competition on long-haul routes.
The Oneworld member said that it had made an operating loss of €19.6 million in the three months between April and June, compared to a profit of €7.5 million for the same quarter in 2013.
Finnair’s turnover fell by 7.2% to €566 million, even though the airline carried 4.9% more passengers (2.5 million) during the quarter than last year.
The airline said that turnover in 2014 would be “significantly lower” than last year and it would be making a “significant loss”.
Finnair CEO Pekka Vauramo said: “The impact of the weak economic prospects in Finland on domestic demand and intensified international competition, particularly in long-haul traffic, had a negative effect on our unit revenue.
“The ongoing uncertain economic outlook in Europe and Asia is contributing to weak consumer demand in our main markets. Air traffic is expected to grow moderately in 2014.
“Finnair, however, will not be able to benefit from that growth without progress in its cost reduction program and its target cost structure in place.”
Vauramo said that the airline had met its cost reduction targets but these savings were “not sufficient to compensate for the drop in revenue”.
Earlier this week, Finnair unveiled details and images of the cabins for its new Airbus A350XWB aircraft which are due to be introduced to its fleet in 2015.