Finnair Predicts 2013 Loss as Strike Threat Hurts SalesRobert Wall
Finnair Oyj, Finland’s national carrier, said preparations for a strike will drive it to a full-year operating loss, three weeks after the airline cut its earnings outlook on declining passenger and cargo revenue.
Cabin crew and ground staff gearing up for 12 days of strikes will depress sales below 2012 levels, the Vantaa, Finland-based airline said today in a statement. Actual strike action would cut revenue by 60 million euros ($80 million) and clip the operating result by 30 million euros, it said.
The carrier last month still predicted annual revenue would be at about the same level as 2012’s 2.45 billion euros and that it would report an operational profit for this year. Since then, currency swings and the possibility of the labor disruptions have crimped the outlook.
“Each potential strike day would decrease turnover by approximately 4.5 million euros,” Finnair said. “The labor agreement negotiations are still on going and Finnair hopes that an agreement is reached to avoid the strike.”
The first labor disruption would begin Nov. 15 and run through Nov. 23, with walk outs planned for four more days from Nov. 27.
The revised earnings forecast does not reflect a strike’s long-term impact on bookings, it said. Finnair also downgraded its projection for non-fuel costs which are now expected to increase rather than fall from 2012 levels.
The previous downgrade was linked to a weakening of the yen, which hurt Finnair as it builds Helsinki into a hub for travel to north Asia, exploiting its position on the shortest “Great Circle” routes.