Finnair (FIA1S) Q2 2022 earnings summary

Executive summary

• Q2 revenue rose 392.0% YoY to €550.3m as passenger demand recovered and cargo remained strong; adjusted operating loss narrowed to €84.2m from €151.3m.

• Passenger volumes reached 2.4m; own-flight capacity was 64% of Q2 2019 ASK, with 6% leased to partner airlines.

• Russia’s airspace closure, record fuel prices and uncertainty kept profitability under pressure; the full-year adjusted result was expected to be significantly loss-making for a third consecutive year.

Financial highlights

• Q2 reported operating loss was €92.9m, pretax loss €169.3m and net loss €279.5m; diluted EPS was -€0.20.

• H1 revenue was €950.1m; adjusted operating loss narrowed to €217.1m from €294.5m, while net loss was €492.3m.

• Q2 capacity (ASK) rose 452.9% YoY to 7,841m km; load factor gained 36.6pp to 67.3%.

• Operating cash flow was €182.0m in Q2 and €217.3m in H1, supported by ticket sales and working capital despite losses.

• Q2 operating expenses included ~€10m of exceptional costs; FX losses were €41.5m, mainly reflecting USD-denominated debt movements.

Outlook and guidance

• Q3 capacity was forecast at ~70% of 2019 ASK and Q4 at the same or slightly higher level; wet leases could lift utilized capacity above 80% in Q3 and to 80–85% in Q4.

• Full-year 2022 comparable result was expected to be significantly loss-making for a third consecutive year; the difficult operating environment was expected to persist.

• A new strategy to improve profitability and strengthen the financial position was targeted for completion in autumn 2022; guidance was to be updated with the Q3 interim report.