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Summary of first quarter 2009 key figuresTurnover fell by 10.0 per cent to 515.7 million euros (572.9 million) Passenger traffic, i.e. revenue passenger kilometres, volume was the same as the previous year, and passenger load factor rose from the previous yearby 1.1percentage points to 75.9% (74.8)
Unit revenue per available tonne kilometre for flight operations declined9.1%, unit’s costs remained nearly at last year's level, rising 0.6%. The operating loss was 24.3 million euros (operating profit 8.8million). The operational result, i.e. EBIT excluding non-recurring items, capital gains and changes in the fair value of derivatives, was a loss of EUR47.5 million (7.8 million), i.e. -9.2% of turnoverThe result before taxes was a loss of EUR25.0 million (4.3 million loss)Gearing at the end of the period was 14.9% (-16.1%) and gearing adjusted for leasing liabilities was 91.5% (43.1%)
Balance sheet cash and cash equivalents at the end of the period totaled EUR374.8 million (461.1 million) Equity ratio 34.0% (43.0%) Equity per share EUR5.82 (7.42) Earnings per share EUR-0.15 (0.03) Return on capital employed -5.4% (14.2%)
In this interim statement, figures for 2008 are presented in brackets after the 2009 figures.
President and CEO Jukka Hienonen on the interim result The figures for oursector make for sad reading wherever one looks. The demandbase and price levels have softened and it is proving difficult to findsolidground underfoot. Airlines have adopted defence positions and are trying to adjust to the situation as best they can.
Our results from the first quarter reflect the situation of the entireairline industry regrettably well. The potential for profitability has run into sand due to feeble demand and a collapse in price levels. The weak figures hold true for both passenger and cargo traffic.
We initiated capacity cuts at the end of last year, but cost flexibility, particularly in Scheduled Passenger Traffic, is poor. The EUR50 million programme initiated last year and a second profit improvement programme ofthe same magnitude launched this year will in time bring some relief on the cost side.
In cutting personnel expenses we have used mainly lay-offs, whose impact oncosts is faster than redundancies. However, continuing structural reformsare also need to allow to build future success. With our present structures, we will not do well in the hard struggle ahead.
A long-lived airline has many operating practices that make the coststructure inflexible. Breaking free from these structures requires long-term work. The prolonged collective employment agreement negotiations with pilots
are only one example of the difficulty of change. Agreements that arose in a completely different world are unsustainable in the present situation in terms of cost level, productivity and flexibility.
Over the years and in many areas, good results have been achieved within Finnair to improve work productivity. In Finnair Technical Services, for example, work productivity and job satisfaction have increased.
2009 is a big year for Finnair in terms of investments. In practice, ourlong-haul fleet will be completely renewed by the end of the year. Despite the difficult situation in the financial markets, our funding for this yearhas been safeguarded. Furthermore, flexibility is enhanced by the fact that all seven lease agreements of our leisure traffic Boeing 757 fleet expire next year. We can therefore consider whether we will extend the agreements or replace the aircraft with an Airbus fleet.
We are adjusting to the present situation by cutting our capacity and costs without, however, jeopardising our Asian strategy over the longer term. At the same time, we are seeking areas of business where we have the opportunity even in these conditions to fare better than our competitors. Our goal is to safeguard and improve our competitiveness for a future upturn
in prospects.
(c) Centre for Asia Pacific Aviation. Date posted: 28-Apr-09
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Finnair First quarter clearly loss-making 
