By Ritsuko Ando
HELSINKI Oct 26 Finnair Oyj said it
was likely to turn profitable this year on an underlying basis
for the first time since 2008, as its cost-cutting plans were
proceeding faster than expected.
It also announced a new restructuring plan aiming to save an
additional 60 million euros in costs through 2014, on top of an
existing plan to cut 140 million by end-2013, to help pay for
The airline, facing tough competition from discount
carriers, has been cutting costs and focusing on profitable
long-haul flights to Asia to turn itself around.
It recently handed over operations of a third of its
European routes to British low-cost airline Flybe Group Plc
The company also said on Friday its third-quarter underlying
profit rose 7 percent from a year earlier to 49 million euros
Its underlying, or operational, results exclude
non-recurring items, capital gains and changes in the fair value
The company, whose shares rose 5 percent to 2.20 euros in
early trade, said it was likely to save 90 million euros this
year, 10 million more than previously planned. It said it would
start talks with labour representatives but gave no details of
what it would propose.
"While we achieved a profitable result in the most recent
quarter, Finnair is still a long way from reaching its long-term
profit target of 6 percent operating profit margin," Chief
Executive Mika Vehvilainen said in a statement.
"High fuel prices, tightening competition and cost savings
measures implemented by our competitors urge further measures
The company said its new cost saving plan would help it pay
for the five Airbus 321 ER aircraft and some Airbus 350 XWB
planes it plans to buy over the next few years. Airbus is a unit
It said the fleet renewal was crucial for its Asia business.