Finnair Q1 2025 results and Q&A
Industrial action and increased costs weighed on the seasonally weak Q1 result as anticipated
We published the Interim Report for January–March 2025 on 29 April.
The first, seasonally weakest quarter of the year was tough for Finnair. Industrial action impacted our operations and had a negative effect on our financial result, while our operating cash flow was strong, driven by sales intake. Our revenue increased by 1.9% from the comparison period, mainly thanks to growth in ancillary revenue. At the same time, the number of passengers increased by 2.6% and available seat kilometres (ASK) by 2.3%.
However, our comparable operating result decreased significantly. The weakening of the result was particularly affected by the industrial action of the Finnish Transport Pilots' Association, which had a negative impact of approximately 31 million euros on revenue, approximately 4 million euros on other operating income and approximately 22 million euros on comparable operating result. As expected, the result was also negatively impacted by costs related to the use of sustainable aviation fuel, driven by changes in environmental regulation, and changes in the EU emissions trading system, which together weakened the comparable operating result by a total of approximately 10 million euros from the comparison period, as well as higher landing and navigation fees, which also increased costs by approximately 10 million euros. Nevertheless, the comparable operating result was in line with our expectations, apart from the effects of industrial action.
Travel demand remained healthy during the first quarter and contributed to the strong cash flow. However, at the start of the second quarter, the threat of trade wars and uncertainty related to economic development have increased significantly, which may weaken demand. At the same time, the price of fuel has declined. Securing profitability, ensuring competitiveness through continuous improvement and optimising our network are at the heart of our work in this uncertain situation.
Finnair’s guidance regarding capacity, revenue and comparable operating result for 2025, excluding any impact of industrial action, is unchanged. Excluding the impact of industrial action, we have planned to increase our total capacity, measured by ASKs, by c. 10% in 2025. The capacity estimate includes the agreed wet leases. We have anticipated our revenue to be within the range of 3.3–3.4 billion euros and its comparable operating result to be within the range of 100–200 million euros in 2025. It is important to note that the estimates regarding capacity, revenue and comparable operating result do not include impacts of industrial action. In the first quarter of 2025, industrial action had a negative impact of around 31 million euros on revenue and around 22 million euros on the comparable operating result. In April 2025, industrial action is estimated to have a negative impact of around 15 million euros on revenue and around 10 million euros on the comparable operating result. In addition, regardless of the duration of industrial action, Finnair has decided to cancel 230 flights scheduled for the summer season due to a temporary lack of resources following the industrial action, which is estimated to negatively impact revenue by approximately 30 million euros and the comparable operating result by approximately 10 million euros. Based on the cancellations already confirmed, industrial action is estimated to have a negative impact of approximately 5% on the total capacity in 2025, measured by ASKs.
Q&A
Below you can find some questions and answers regarding the report.
What did the -22 million euro result impact of industrial action consist of?
The negative result impact was the result of many factors. The amount consisted of lost ticket revenue, passenger compensation, rerouting costs, and accommodation and care costs.
Did the rise in navigation and landing charges occur across traffic areas? Is the cost increase permanent?
This cost increase is permanent. There are now fewer users of the Northern European airspace than before the Russian airspace closure, and our relative share of the airspace usage has gone up, which means that we need to proportionately carry a bigger portion of the costs. However, we now have more time to react, as we head into the seasonally stronger quarters of the year.
Given the recent trade tensions and tariff announcements, have you seen any indication of slowing demand towards the U.S.?
It is still too early to tell whether trade have an impact on demand. In the big scheme of things, we haven't identified major changes in booking patterns. Having said that, as we also said in our guidance, the risk level has gone up. We, of course, continue to monitor the situation.
When will you announce an updated strategy? What will be your new focus areas?
Our current strategy period ends at the end of 2025. An updated strategy will be communicated during this year. At the heart of the strategy that is currently being finalized is understanding the needs of customers, especially the customers who fly the most.