Finnair - Strong Q1 due to low costs
Finnair’s EUR -0.6m comparable EBIT was a strong result for Q1 and was a bit above estimates. Revenue was as estimated, and the Iran war actually helped Finnair’s performance a bit as capacity moderations between Europe and Asia bolstered Finnair’s Asian demand. The positive earnings surprise was driven by lower costs, and Finnair retains its financial guidance for the year although there are still increased risks related to fuel availability even if the situation is stable for now.
- Finnair Q1 revenue grew by 12.1% y/y to EUR 778.1m vs the EUR 775.3m/776.5m Evli/consensus estimates as passenger revenue gained by 14.0% y/y when average ticket fares started to increase (already up some 4% y/y).
- Comparable EBIT was EUR -0.6m vs the EUR -17.8m/-4.8m Evli/consensus estimates. Successful cost management and increased demand for Asian flights counterbalanced higher jet fuel prices’ negative impact.
- Fuel costs were EUR 227m, compared to our EUR 250m estimate, whereas staff costs amounted to EUR 148m vs our EUR 141m estimate. All other OPEX+D&A landed at EUR 440m vs our EUR 424m estimate.
- Cost per Available Seat Kilometer was 8.24 eurocents, compared to our estimate of 8.39 eurocents.
- Finnair expects its revenue to be EUR 3.3-3.4bn and comparable EBIT to be EUR 120-190m in FY’26 (guidance unchanged). The guidance is based on the assumption that there will be no significant disruptions in fuel availability. So far fuel availability at Helsinki airport is stable. Fuel availability could however become a new risk factor if the war prolongs.