Finnair sales down, SARS to blame

  • 2003-06-19
  • Agence France-Presse
HELSINKI

Finnair, Finland's national carrier, recently reported a slump in numbers of passengers, blaming SARS for wreaking havoc on its Asian routes.
Finnair said overall passenger traffic fell to 517,000 in May, a decline of 20 percent compared with the same month a year earlier.
Traffic on its profitable Asian routes was down by 50 percent.
"This is not a good situation, especially on the Far Eastern traffic, which indicates pretty much the effect of SARS, where about half of the traffic has disappeared," Taneli Hassinen, Finnair's financial spokesman, said.
The airline was already carrying out an aggressive cost-cutting program to reduce staff and expenses by 10 percent each and as a result had warned that the full-year result for 2003 would be negative.
With the outbreak of SARS in Asia, the state-controlled airline's financial situation has become even more precarious, costing it tens of millions of euros.
"It's more a question of tens of millions than a few million," Hassinen said, declining to be more specific on the losses due to the epidemic.
Finnair's share price on the Helsinki stock exchange fell over 2 percent on the news, trading at about 3.6 euros late last week.
To combat the situation the airline has instituted temporary lay-offs in addition to the earlier planned restructuring program.
But these have been contentious with the staff, which means there is more trouble ahead.
A two-day strike, begun June 10 by 3,000 of its ground personnel virtually ground the airline, forcing it to cancel almost 100 flights per day.
The strike action could cost Finnair about 3 million euros, Hassinen estimated.
In the first quarter of 2003, Finnair's net loss grew to 9.9 million euros from 4.1 million in the same period a year earlier.
Sales in the quarter however, boosted by increased charter traffic, were up 2.4 percent to 400 million euros.
The company also announced on June 16 that it will restart direct Helsinki-Miami flights later this year to take advantage of the favorable euro-dollar exchange rate for European travelers. ish state holds a 58.5 percent stake.
"Miami and its surroundings have many places of interest," the company said in a statement.