Finnair - EBIT landed right next to estimates
Finnair’s Q1 earnings were in line with estimates even though top line came in a bit lower than estimated. The report doesn’t seem to contain many surprises, although Finnair appears slightly more cautious towards capacity increases (and hence revenue) than before.
- Finnair’s Q1 revenue decreased by 1.9% y/y to EUR 681.5m vs the EUR 709.8m/698.2m Evli/consensus estimates. Passenger revenue decreased by 2.5% y/y to EUR 539.3m. Political strikes in Finland had a negative effect on revenue. Yields remained strong despite a slight y/y decrease.
- Comparable EBIT amounted to EUR -11.6m, compared to the EUR -12.9m/-8.3m Evli/consensus estimates. Operating expenses remained unchanged y/y due to strict cost control and lower fuel prices even though capacity increased.
- Fuel costs were EUR 210m vs our EUR 212m estimate, whereas staff costs amounted to EUR 130m vs our EUR 138m estimate. All other OPEX+D&A were EUR 386m, compared to our EUR 399m estimate.
- Cost per Available Seat Kilometer was 7.77 eurocents vs our estimate of 8.10 eurocents.
- Finnair updates its guidance and now plans to increase its total capacity (ASK) by some 10% this year, including the agreed wet leases. Growth mainly focuses on Asia and Europe, and revenue is expected to grow at a slower pace than capacity in 2024. Finnair previously planned to increase capacity by more than 10% while revenue was expected to grow at a somewhat slower pace than capacity. Finnair provides full-year comparable EBIT guidance in connection with the Q2 report in July. Summer season sales look good while winter season trips have been booked well in advance.