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UPDATE 1-Finnair speeds up growth, aims to double operational profit in 2017
July 20, 2017 / 10:40 AM / 2 months ago

UPDATE 1-Finnair speeds up growth, aims to double operational profit in 2017

(Adds CEO comments, share price reaction)

By Boleslaw Lasocki and Pawel Goraj

July 20 (Reuters) - Finnair said on Thursday it expects full-year operational profit to double in 2017 after it flew a record number of passengers in the second quarter, boosting operational profit more than 11-fold.

Second-quarter operational profit surged to 37.5 million euros ($43.15 million), well above the 23.7 million euros expected by analysts polled by Reuters, lifted by Asia and Europe.

The results and forecast propelled the Finnish airline’s shares 5.5 percent higher to a 9-year high.

The company wants to further strengthen its Asia routes, which represent about half its total capacity, aiming to fly 20 million passengers annually by 2030, Chief Executive Pekka Vauramo told Reuters, adding that the goal was “realistic”. Finnair now flies roughly 11 million passengers a year.

The airline, majority owned by the Finnish state, reiterated its 2017 capacity growth outlook of 8-10 percent, due to fleet renewal and introduction of new aircraft.

The company said it expected its comparable operating profit for 2017 to broadly double from last year’s 55 million euro figure. That would exceed analysts’ expectations of 92.4 million euros in a Reuters poll.

Finnair has struggled in recent years with tough competition from discount carriers, but cost savings and more flights to Asia has helped it swing back into profit.

Last week, rival Norwegian Air Shuttle said it expects lower 2017 growth, after publishing disappointing second-quarter results.

Cautious comments by British budget airline easyJet on the outlook for summer pricing hit its shares and those of some rival airlines on Thursday, overshadowing its increased profit target after a strong quarter. ($1 = 0.8691 euros) (Reporting by Boleslaw Lasocki and Pawel Goraj in Gdynia; editing by Jason Neely and Adrian Croft)

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