Finnair Oyj (FIA1S), Finland’s biggest airline, posted a narrower second-quarter loss as passenger traffic increased and it deepened a cost-cutting plan.
Shares of Finnair rose as much as 8.9 percent after the Vantaa-based carrier said its loss was cut to 19.9 million euros ($24 million) from 23.1 million euros a year earlier,
“The result reflects not only increased demand but also the successful progress of our structural change and cost reduction program,” Chief Executive Officer Mika Vehvilainen said in a statement. “We have taken definite steps forward, although the majority of cost savings are still being realized.”
Finnair, which has established Helsinki as a hub for travel from European to China, Japan and Korea, lifted passenger numbers almost 11 percent in the quarter. The company hasn’t posted an annual profit since 2007 as competition with Norwegian Air Shuttle AS (NAS) and Stockholm-based SAS Group (SAS) weighs on margins.
The stock was trading 5.9 percent higher at 2.15 euros as of 10:42 a.m. in Helsinki, paring the decline this year to 6.5 percent and valuing the company at 276 million euros.
Finnair is seeking to create a joint venture that would expand its presence across the Nordic region and stem losses from short-haul operations, it said in February.
“This analysis will be continued and our goal is to find solutions that would be in line with the overall interests of the company and would promote our operations as a network company,” Vehvilainen said today.
Finnair, a member of the Oneworld alliance that includes British Airways, aims to shave 140 million euros from costs by 2014 in a program begun last year. Measures include cutting 100 cabin-crew jobs starting in 2014.
Analysts had predicted a quarterly loss of 4.33 million euros, the average of three estimates in a Bloomberg survey.
To contact the reporter on this story: Ola Kinnander in Stockholm at firstname.lastname@example.org