Finnair reports that it has been able to increase capacity by up to 8% using its existing fleet, as the airline awaits the arrival of its new Airbus A350-900 in the fourth quarter (Q4) of 2024.
Based on the strong demand it saw in 2023, the Oneworld alliance member said it increased its capacity for 2024 by improving aircraft utilization more efficiently and by deploying aircraft that were returned from British Airways wet leases, which had been transferred back to Finnair’s use by the end of the first quarter.
“This creates 6% additional capacity,” Finnair CEO Turkka Kuusisto said during the airline’s half-year financial results call July 19. “Including [Finnair’s] other wet-lease cooperation with Qantas, then it will be 8%.”
“Roughly half of this growth is coming from the new wet-lease agreement with Qantas,” CFO Kristian Pullola said. “The Qantas deal enabled us to take into use our full widebody fleet.” Since March 30, two Finnair A330s have been flying routes from Sydney to both Bangkok and Singapore for Qantas, which—like Finnair—is part of Oneworld.
The capacity increase is not only in line with the market, Kuusisto said, it is also based at a competitive cost level despite the capacity constraints prevailing in the aircraft market. Finnair said it has also implemented faster, standardized turnarounds at airports along with the improved aircraft utilization. “I do not see [us growing] our capacity through investments,” Pullola said, ruling out adding more aircraft.
For the full year 2024, Finnair plans to increase its capacity by more than 10%. Regarding the next two A350s Finnair has on order, the first is scheduled to be delivered in Q4 2024 and the second is set for the second quarter (Q2) of 2026.
As Finnair’s existing fleet is operating more intensely, maintenance has become crucial, the airline said. Finnair’s maintenance costs increased by €10 million ($10.9 million) in Q2 2024 compared to the same quarter a year earlier.
“We had some pressure on maintenance, coming from the discount rate changes that have an impact on maintenance reserves and then on costs,” Kuusisto said. Finnair had some engine-related maintenance issues on one of its widebody aircraft. “It is a cost line item which is volatile; there is some pressure still also through the supply chain and availability of spare parts,” he said.
At the end of June, Finnair operated 55 aircraft, comprising five A319s, 10 A320s, 15 A321s, eight A330-300s and 17 A350-900s. The average age of the fleet operated by Finnair is 13 years old. Finnair’s regional fleet—operated by Nordic Regional Airlines (Norra)—includes 12 ATR turboprops and 12 Embraer E190s.
Asked about Q2 business in general, Kuusisto said, “it was a busy, and in many cases, a good quarter for Finnair.” For the three months ending June 30, Finnair’s total revenue decreased 2.3% year-overo-year to €766.1 million. The airline’s comparable operating result dropped to €43.6 million, compared to €66.2 million in Q2 2023. Its Q2 net profit was €17.9 million, compared to €138.6 million the year prior.
Runway renovation at Helsinki Airport from May until mid-summer negatively impacted the carrier’s on-time performance and increased costs in the form of re-routing customers to their connecting flights. On-time performance was also affected by challenging weather conditions that delayed flights and increased Finnair’s costs.
Looking ahead, the airline’s priorities are to continuously improve competitiveness and profitability, “as well as to take care of our cash flow and balance sheet, without forgetting growth,” Kuusisto said.
Related Content
