Asian tsunami cost Finnair two million euros

Government has promised to pay expenses caused by catastrophe

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The Boxing Day tsunami in southeast Asia caused Finnair additional expenses of up to EUR two million. The Finnish government has promised to pick up the tab.
      Finnair started rescue flights to the Asian disaster areas on the day of the catastrophe, Sunday December 26th. The government took over the responsibility of coordinating the evacuation efforts the very next day.
      In one week, Finnair flew over 2,600 people out of Thailand and Sri Lanka with ten flights and one ambulance flight.
      "With a clear conscience we can say the job was done as well as was possible in those circumstances", said Finnair CEO Keijo Suila on Thursday.
      Suila said that though the tsunami was a cataclysmic event of global proportions, its economic impact on Finnair is not significant.
     
Last year Asia was Finnair's most attractive destination, as marked by a 44% rise in passenger figures to the area.
      This growth figure is further enhanced by the fact that the preceding year's numbers were exceptionally poor because of the SARS epidemic.
      Finnair continues to rely on the attractions of the Orient. In September it will open a new route to Canton.
      Asian flights already make for a quarter of Finnair's profits from passenger and cargo traffic. Domestic flights contribute a fifth, whereas one half of Finnair's takings come from flights to and from Europe.
     
According to Suila, Finnair's ticket prices this year will remain more or less at last year's level.
      In June last year Finnair slightly increased the ticket prices because of the rise in the price of fuel. This price increase strained Finnair, with an addition bill of EUR 55 million compared with the year before, in spite of hedging operations.
      Finnair aims to reduce the number of its employees again this year, but no redundancies are to be expected.
      In the past two years Finnair has reduced its personnel by 1,200 people. Today the company employs 9,522 individuals.
     
There is a lot of competition in the Nordic skies these days. Finnair has received eight new competitors, four of which have already closed down their operations.
      "The rest are struggling as well, and more bankruptcies are to be expected. Finnair is the only listed airline in the North that currently makes a profit", Suila concludes.
      The company reported operating profit of EUR 17 million (2003: EUR 19 million loss) on turnover of nearly EUR 1,700 million (up by 9%).


Links:
  Finnair
  Forbes: Finnair Reports Growing Revenues in 2004

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