FNNNF - Finnair shares fall on continued losses capacity concerns

Finnair Oyj ( OTCPK:FNNNF ) fell sharply on Tuesday after posting a disappointing earnings result that included persistent net losses and capacity still well below 2019 levels.

For the first six months of 2022, the national air carrier of Finland posted a €0.36 loss despite a significant jump in revenue from the prior year. Additionally, the carrier’s passenger occupancy rate was 67.3%, continuing to trend below the pre-pandemic level.

“In the second quarter, Finnair moved from one crisis to another,” CEO Topi Manner said in a statement. “The effects of the heavy pandemic that lasted more than two years began to ease as demand recovered, but at the same time, the effects of the war in Ukraine were felt with their full weight.

He noted that operating income was hit by the rerouting of certain flight paths to avoid Russian airspace as well as the high price of fuel. Manner noted that the cost of fuel has “almost doubled from the end of 2021” for the European carrier. The reorientation of flight paths also effectively cut off routes to Japan and South Korea that had traditionally been profitable for the carrier.

Amid these changes and crises, Manner said he expects another full-year loss. Shares fell over 8% in European trading after the inauspicious earnings result and forecast. Management forecast significant changes to come in order to shore up the adverse results that threaten many European airlines, but impact Finnair ( OTCPK:FNNNF ) to an even greater degree..

“These changes require a new strategy and significant structural renewal from Finnair,” Manner declared. “We are therefore currently working on a thorough strategy reassessment, and our goal is to tell you more about our direction and the changes it causes in the fall.”

Further details on the shifts were not made available.

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