Source = e-Travel Blackboard: J.C
Fuel, says Finnair President and CEO Jukka Hienonen, is the reason why the airline’s earnings before interest and tax for 2006 is in the red. Hienonen explained to a transport industry forum in Kirkkonummi, Finland, the airline’s results and shed some light on the airline industry outlook on Tuesday.
“Finnair’s fuel bill for last year was almost one hundred million euros higher than the previous year, but recent decreases in the price of oil have had a positive effect on cost development in the transportation sector,” he explained. “Finnair’s operational result for last year will, in accordance with previously given guidance, be profitable. Due to costs from structural arrangements and changes in the fuel derivative market value, Finnair’s earnings before interest and tax will be in the red.”
The airline sees 2006 as an “interim year in Finnair’s result development.” The airline saw changed in structure and the outlook for 2007 is positive and the result is expected to be significantly better.
This can be seen by the way that the airline is boosting its long-haul network and changing the routes so that all Asian flights will be flown direct from spring this year. As most flights will be operated daily, Mumbai will be added to this repertoire with its launch this year. With this, it is expected that Finnair’s Asian traffic capacity will increase by approximately 30% in 2007.
“The structural changes begun last year give justified reason to believe that the result for 2007 will be significantly better than in the previous year.”