Finland’s national carrier Finnair, mired in years of losses, posted a surprise profit in what it calls its operational results in the second quarter thanks to higher passenger numbers and lower fuel costs.
Finnair posted an operational profit of EUR€14.7 million (USD$18.1 million) in April-June, compared with a loss of EUR€13.8 million a year ago.
The airline defines its ‘operational’ result as earnings before interest and tax (EBIT) excluding non-recurring items, capital gains and changes in the fair value of derivatives and some exchange rates.
Turnover grew 10 percent to EUR€594.4 million.
The airline posted an operating loss, which includes one-off costs, the change in the fair value of derivatives and in the value of foreign currency denominated fleet maintenance reserves, of EUR€18.1 million compared with a loss of EUR€25.2 million loss a year ago.
Nordea analyst Pasi Vaisanen said good April-June results increased investors’ expectation that Finnair could put an end to its four-year long losses.
“Share rise of 5-10 percent is justified considering the results and the outlook for this year,” he said.
The airline is tackling weak profitability by cutting costs and jobs.
It is handing over a third of its European routes to low-cost British airline Flybe and last week announced Lufthansa’s LSG Sky Chefs will buy its catering division.
Finnair repeated that it expected operational profitability to improve in the second half of the year.