Finnish flag carrier Finnair has raised its profit forecast for the full-year 2023 after saying that its post-Russia turnaround strategy had “progressed better than anticipated”.
The Helsinki-based airline has been forced to rewrite its money-making long-haul business plan after the closure of Russian airspace ruined its strategic advantage of operating flights from Europe to Asia.
Finnair had been hit hard by the pandemic and extended border closures across Asia, and just as those restrictions were being lifted, its strategy was dealt a further blow when Russia closed its airspace in February 2022.
As a result, Finnair flights to and from Asia must now fly much longer routes which has significantly increased fuel burn for the airline and made flights less desirable for passengers.
Topi Manner, the airline’s beleaguered CEO, announced a turnaround strategy last year, which focused on cost-cutting and building a broader long-haul strategy with a key emphasis on moving from East to West.
Finnair has also pursued a so-called ‘wet lease’ business in which the airline leases out its aircraft and crew to other carriers. So far, Finnair has secured several lucrative contracts, including an ongoing short-haul agreement with British Airways and a contract to lease out two Airbus A330 planes to Qantas in early 2024.
“Contrary to the previous guidance, the company estimates that the comparable operating result will probably reach or even exceed the 2019 level of 162.8 million euros,” the airline said on Tuesday.
Finnair is anticipating better-than-expected profits despite forecast revenues still being below pre-pandemic levels. The airline said it had been helped by strong travel demand and lower-than-anticipated fuel costs.
Nonetheless, Finnair said it was concerned about the impact that rising inflation could have on demand, as well as fuel costs.
