Aug. 14 (Bloomberg) -- Finnair Oyj suffered its biggest decline in three months in Helsinki trading after the airline said full-year revenue will miss targets as a weaker yen crimps the value of sales from the key Japanese market.
Finnair dropped 8.7 percent, the most since April 26, before trading 5.9 percent lower at 3:03 euros as of 11:16 a.m. local time. That limits gains this year to 27 percent and values the Vantaa-based company at 388 million euros ($515 million).
Annual revenue will be around the same level as 2012’s 2.45 billion euros after the yen slid 26 percent against the euro in the second quarter, Finnair said today, scrapping a prediction for higher full-year sales. Japan has become a major market as the carrier builds Helsinki into a hub for travel to north Asia, exploiting its position on the shortest “Great Circle” routes.
“We did have solid growth on passenger numbers in Asia and in Europe, but the Japanese yen is an important currency for us, we sell quite a lot of tickets in Japan and in Japanese yen, and when we convert them to euros it doesn’t contribute as much,” Chief Executive Officer Pekka Vauramo said in a telephone interview.
The carrier, a Oneworld-alliance member that competes with Stockholm-based SAS Group and Norwegian Air Shuttle AS in local markets, posted net income of 1.2 million euros in the first half, versus a year-earlier loss of 37.9 million euros. Full-year results should show a profit at operating level, it said in a statement today.
Finnair will focus on boosting labor productivity as it seeks 60 million euros in savings on top of 140 million euros secured, Vauramo said. The carrier will first discuss salary reductions and other measures to trim labor costs before considering job cuts, he said. Talks with labor groups and unions have already begun, the airline said separately.
“We are growing, even at this moment we are growing our passenger volumes and we do have the potential, provided we can reduce some of our costs and reach a more competitive cost level we don’t have to go through the job cuts,” he said.
To contact the reporter on this story: Kari Lundgren in London at firstname.lastname@example.org
To contact the editor responsible for this story: Benedikt Kammel at email@example.com