Finnair Faces Turbulence: Profit Warning Amidst North Atlantic Challenges
Finnair warns of financial strain due to weakened demand for North Atlantic flights, declining ticket prices, and labor strikes. The airline's North American traffic growth underperformed, affecting its shares and quarterly earnings, prompting a revision of its full-year profit forecast. Concerns include U.S. border controls affecting European travelers.
On Wednesday, Finnair issued a profit warning as weaker-than-expected demand for North Atlantic flights, coupled with falling ticket prices and the impact of strikes, threaten the airline's 2025 comparable operating profit. This announcement caused Finnair's shares to drop by up to 9%.
The Finnish carrier indicated that North American traffic growth was more moderate in the second quarter than estimated, with average ticket fares declining and booking windows shortening amid overall market uncertainties.
CEO Turkka Kuusisto noted that demand for North Atlantic routes is being moderated by customer sentiment influenced by media coverage of the U.S., particularly in Finland. With border control concerns and President Donald Trump's policies impacting European travel to the United States, lower transatlantic airfares are a result, as preliminary data showed.
Following the airline's reporting of weaker-than-expected quarterly core earnings, impacted by labor disputes, Finnair's shares fell 5.8% by 0848 GMT. The second-quarter comparable operating profit was reported at 10.3 million euros, a decrease from the previous year's 43.6 million euros.
Finnair revised its full-year comparable operating profit forecast to be closer to the lower end of their previously guided range of 100 million euros to 200 million euros.
(With inputs from agencies.)
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