Finnair's steep slide continues in September

Demand off year-on-year by 14%

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The steep slide in demand for the flights of national carrier Finnair continued in September. The airline reported that passenger demand was down from September 2008 by almost 14%, and the passengers carried in the first three quarters of 2009 fell by 8.9% on the previous year.
      Almost equally precipitate was the fall in the average return; scheduled passenger traffic's unit revenues in passenger kilometres fell in the third quarter of 2009 by nearly 12 per cent, according to Finnair's SVP Communications Christer Haglund.
     
The numbers are grim, but no longer quite as bleak as in the early part of the year. In the first six months of 2009 the equivalent drop in revenues was of the order of 18%.
      Against this background, the company is trying to stir up flagging optimism where it can.
      "Finnair's cargo traffic reaches bottom", reads the headline in Wednesday's stock exchange announcement.
      There is some truth in this, however, as there was indeed an increase in tonne-kilometres revenue, of a full 1.2%.
     
It is nonetheless hard to generate much wild celebration over this, since cargo accounts for only around 10% of the company's revenues.
      The other 90% delivered rather ugly figures. Scheduled traffic in September was down by 10.9% year-on-year in passengers carried.
      Only on North American routes was demand up in terms of passengers carried, thanks to a second daily flight to New York and back.
      For the same reason, the supply of seats grew even more, and the average passenger load-factor on the North Atlantic side dipped a fraction below 80%, down by 4.1%-points.
     
What is very troubling is the continued decline in the Asian market.
      The carrier's entire strategy is based on traffic between European and Asian airports, and the passengers carried figure here was off by 14% compared with last year, while revenue was down 12.2%.
      Such big numbers awaken doubts about a possible loss of market share.
      Wednesday also saw the publication of traffic figures from Air France KLM, one of Finnair's main competitors on the Europe-Asia axis.
      Air France KLM's Asian demand was down by just 3.6%.
      All is not well in their camp, either, for Air France KLM's cargo business in September posted a hefty 17% fall.
     
In the early part of this year, Finnair's leisure flights held up better than did scheduled traffic, but in September the roles were reversed.
      Leisure traffic demand slumped by 30% and the number of passengers carried to and from holiday destinations fell by nearly a third.
      Finnair has responded to the declining demand by cutting its services across the board.
      In the scheduled traffic the supply and demand curves ran more or less in parallel, and consequently the passenger load factor remained practically unchanged at 76.4%.
     
Another carrier publishing hair-raising figures today was SAS. It will probably come as scant consolation to Finnair to read that their Scandinavian rivals are flying even closer to the ground: SAS reported that the number of paid passenger kilometres in September fell by 18% from the same period last year.
      SAS, too has slashed its supply of flights to match passenger demand, and the load factor for September was steady at 70.6%.
      This compares with 68.3% for the period from January to June.


Previously in HS International Edition:
  Finnair CEO Jukka Hienonen resigns; new co-determination talks imminent (7.8.2009)
  Decreasing demand brings decline in Finnair services (8.9.2009)

Links:
  Finnair Group stock exchange release
  Finnair Group

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