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Finnair Group Interim results January-June 2001. A strong downturn in the industry - Finnair one of the best performers. Industry market conditions. Total demand has clearly slowed down Airline profitability has weakened drastically Passenger and cargo volumes are declining
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A strong downturn in the industry - Finnair one of the best performers
Industry market conditions • Total demand has clearly slowed down • Airline profitability has weakened drastically • Passenger and cargo volumes are declining • Cabin factors among European airlines has fallen, especially on North American routes
Finnair at the forefront • Finnair´s strong market position well maintained • Profitability well above the industry average • Healthy cashflow, strong balance sheet • Cost per unit trend good for eight quarters already • Improved productivity • Strong growth in on-line sales • Quality of operations on target • punctuality and quality among best in Europe
Wind chill factors • First weaker quarter since autumn 1999 • Business travel on the decline, weaker domestic demand • High cost of fuel and the dollar • Low visibility due to uncertainty of global economy • Operating result expected to fall clearly below 2000 result
Key figures MEUR
Operating result for H1/2001 remained at the previous year’s level, but Q2 was weaker • January-June 2001 profit after financial items and excluding revenues from the sale of assets, amounted to EUR 28.6 million (MEUR 28,1), Q2 MEUR 22,6 (33,9 MEUR) • Q2 yield: -1.6 % (per RPK), +2.6 % (per RTK) • Q2 unit costs: -1,0 % • Q2 operating costs +9.5 %, excl. jet fuel +7.8 % • Q2 jet fuel costs +24.9 % (9.4 MEUR) • H1 Staff productivity +5 %
Finnair trafficJanuary-July 2001 CF %: Cabin factor
Growth in Business and Tourist class International scheduled traffic % 20,0 15,0 10,0 5,0 0,0 -5,0 -10,0 -15,0 -20,0 01.00 02.00 03.00 04.00 05.00 06.00 07.00 08.00 09.00 10.00 11.00 12.00 01.01 02.01 03.01 04.01 05.01 06.01 07.01 Business class Tourist class
Cabin factor January-July 2001 & 2000 %
Demand (RPK) and production (ASK) January-July 2001 %
Yield and unit cost developmentYear on year change % 2001 1999 2000
EBIT per quarter MEUR 1998 1999 2001 2000
Change in EBIT per quarterExcluding book gains from asset disposals MEUR * * 2001 2000 1998 1999 * Change excl. exceptional items in the closing of accounts and due to change of fiscal year
Cash flow and Capex MEUR
Group personnel -2,3%
From here onward • Increase of capacity for winter season approx. 2% in tonne and 6% in passenger kilometers • New growth in Asia and Baltic region • fourth MD-11 into regular scheduled service • two leased B757 into leisure traffic • Startup of Aero and development of feeder traffic • More in-depth cooperation within alliance • Operating costs • distribution and purchasing • Electronic and mobile eFinnair “Wind chill foreseen, but long term confidence remains”
Changes in Passenger Traffic & Capacity TOTAL TRAFFIC % 25 1998 2000 2001 1999 20 Traffic - Revenue Passenger-Km 15 Capacity - Available Seat-Km 10 5 0 -5 -10 -15 jun apr jun feb jun feb jun feb apr oct apr oct apr oct dec dec dec aug aug aug
Changes in Passenger Traffic & Capacity % EUROPE 20 1998 1999 2000 2001 15 10 5 0 -5 Traffic - Revenue Passenger-Km -10 Capacity - Available Seat-Km -15 -20 feb feb feb apr apr apr apr jun jun jun jun oct oct oct aug aug aug dec dec dec
Changes in Passenger Traffic & Capacity ATLANTIC % 40 1999 2000 2001 1998 30 20 10 0 -10 -20 -30 Traffic - Revenue Passenger-Km -40 Capacity - Available Seat-Km -50 -60 jun jun jun jun oct feb oct feb oct feb apr apr apr apr dec dec dec aug aug aug
Changes in Passenger Traffic & Capacity FAR EAST % 50 2001 1998 1999 2000 40 30 20 10 0 -10 Traffic - Revenue Passenger-Km Capacity - Available Seat-Km -20 -30 -40 feb feb feb oct oct oct jun jun jun jun apr apr apr apr dec dec dec aug aug aug
Changes in Passenger Traffic & Capacity DOMESTIC % 30 1998 1999 2000 2001 20 10 0 -10 -20 Traffic - Revenue Passenger-Km -30 Capacity - Available Seat-Km -40 -50 -60 jun oct jun oct jun oct jun feb feb feb apr apr apr apr dec dec dec aug aug aug
Changes in Passenger Traffic & Capacity LEISURE % 50 1999 2000 1998 2001 40 30 Traffic - Revenue Passenger-Km 20 Capacity - Available Seat-Km 10 0 -10 -20 -30 feb feb feb apr apr apr apr jun jun jun jun oct oct oct aug aug aug dec dec dec
SHARE OF BUSINESS CLASS International scheduled traffic - 12 mths rolling average 26,5 26,0 25,5 % 25,0 24.7 24,5 24.3 24,0 23,5 23,0 01.00 02.00 03.00 04.00 05.00 06.00 07.00 08.00 09.00 10.00 11.00 12.00 01.01 02.01 03.01 04.01 05.01 06.01 07.01
TRAFFIC GROWTH vs PASSENGER CABIN FACTOR RPK 12 m rolling sum cf % Y-o-y growth % 16,0 76,0 14,0 74,0 12,0 72,0 10,0 70,0 8,0 68,0 6,0 66,0 4,0 64,0 2,0 62,0 0,0 60,0 -2,0 -4,0 58,0 01.96 01.97 01.98 01.99 01.00 01.01 change, y-o-y (left) cabin factor (right)