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Finnair has reported a small profit in the first half of the year after cutting its workforce by 16 per cent as part of a €140m cost saving programme.
The airline made €2.5m before tax in the six months to the end of June, compared with a loss of €48.7m in the same period the year before. Turnover was up 1.4 per cent to €1.2 billion. Finnair carried 4.56 million passengers in this period, a 5.2 per cent increase and recorded load factors of 65.4 per cent, an increase of 1.1 percentage points.
Finnair operates a number of flights to Asia, attracting business travellers from Europe with a claimed fastest flying time across the polar region via its Helsinki hub. The airline said that during the second quarter, the total market for flights between Helsinki and European destinations grew by 4.6 per cent, while the market between Asian and European destinations contracted by 2.1 per cent. However, the airline was able to increase its market share in both sectors.
Finnair said jet fuel remained at a high level but that the euro had appreciated nearly 26 per cent against the Japanese yen – one of its key markets - and approximately two per cent against the US dollar compared to the corresponding period in 2012.
Finnair’s cost-cutting programme, which began exactly two years ago, achieved its €140m target six months early, with the workforce now down to under 6,000 and an outsourcing programme underway.
It added that the long-term objective is an operational profit margin of six per cent with an additional €60m in savings by the end of 2014. This will come via “substantial savings” in personnel costs.
“The objective is to achieve the level of market wages and labour costs in the industry, primarily by implementing changes to wage structures and working hours,” it said.