Finnair Q4 2024 results and Q&A

We published the Financial Statements Release for 2024 today.

In the fourth quarter, the number of passengers increased by 9.1 per cent from the comparison period. Our capacity increased by 3.3 per cent, and by 4.1 per cent when taking wet lease outs into account.

Our revenue increased by 7.7 per cent. The improved passenger load factor supported an increase in unit revenue, while the decline in average ticket fares stabilised.

Our comparable operating result more than doubled. In addition to higher revenue, the improved passenger load factor and a lower fuel price contributed to the increase. However, the result was negatively impacted by weather-related disruptions and industrial action by the Finnish Air Line Pilots' Association related to the pilots' collective bargaining, which led to the cancellation of approximately 300 flights during two days in December and more than 200 flights outside those two days in November and December. Reported operating result was further negatively impacted by the partial return of indexation of the obligations of Finnair Pension Fund. In addition, comparability of the result for the period was affected by the deferred tax assets that supported the result for the comparison period.

Our net cash flow from operating activities was strong, and our balance sheet is in good shape to support the implementation of Finnair's strategy. Thanks to the positive result and our strong financial position, we have the opportunity to reward our shareholders after a long time with a return of capital of 0.11 euros per share as proposed by the Board of Directors. 

In 2025, we plan to increase our total capacity by c. 10 per cent. The growth focuses on North Atlantic traffic and supports revenue growth. We expect our revenue to be within the range of 3.3–3.4 billion euros and our comparable operating result to be within the range of 100–200 million euros. In 2025, profitability is burdened particularly by additional costs caused by the sustainable aviation fuel distribution obligation introduced in the EU, as well as rising navigation and landing charges, which will weigh on the comparable operating result especially for the seasonally low first quarter. In addition, the first quarter’s comparable operating result will be negatively impacted by the timing of Easter. The estimates regarding capacity, revenue and comparable operating result do not include impacts of industrial action. In January 2025, the estimated negative impact of industrial action on comparable operating result was around 5 million euros. 

We are currently finalising a strategy update with a particular focus on Finnair's core customers’ needs, operational development and cost competitiveness to maintain and strengthen our position as a safe and high-quality airline and a trusted partner for our customers. As part of this, we are also preparing a partial renewal of our narrow-body fleet.

Q&A

Below you can find some questions and answers regarding the financial report. 

Finnair expects its revenue to be within the range of 3.3-3.4 billion euros in 2025, which implies growth of around 10%. What is this estimate based on? 

Our revenue guidance is in line with the anticipated increase in capacity. The capacity increase is driven by the new A350 aircraft, two A330s returned from Qatar Airways in January and improved fleet utilisation. 

Your EBIT guidance range of 100-200 M€ is very wide – why? 

We expect general market uncertainty to continue in 2025. There are multiple uncertainties regarding volumes, yields and fuel costs. The range includes our worst- and best-case scenarios for the year. 

What was the impact of the pilots' industrial action on the Q4 result? What about now in Q1? 

The industrial action led to the cancellation of around 300 flights during two days in December and more than 200 flights outside those two days in November and December. The impact on the Q4 result was around -5 million euros. Cancellations have continued in Q1 and will have an impact on the quarter’s result. In January 2025, the estimated impact of industrial action on comparable operating result was around -5 million euros. 

How do you see Q1 yield development compared to a year ago? 

We do not expect any major changes in ticket fares in the near future, as prices have already declined from the record highs of 2023. A lot depends on the development of the demand situation. Looking further ahead, increasing environmental costs will put upward pressure on ticket prices. 

Your ticket liability decreased from the previous quarter. How is this expected to be reflected in your Q1 figures? 

The unflown ticket liability decreased by 25 M€, which is less than in the previous year (-59 M€ in Q4/23) due to higher sales intake. On the other hand, more and more customers are now booking months in advance and, therefore, the higher intake is not reflected in the next quarter’s figures only. 

What do you mean when talking about partial renewal of your narrow-body fleet? 

Only a half of our narrow-body fleet of 30 aircraft is over 20 years old, while the other half is less than ten years old. Therefore, the need for renewal is limited. The timing and number of aircraft to be renewed will be shared once the decision is made.