Finnair Group Interim Report 1 January - 30 September 2014

Regulatory News:

Finnair OYJ (HEX:FIA)

Third-quarter operational result declined to 26.7 million euros - product upgrades announced and savings agreements negotiated during the period will have an effect on the result from 2015 onwards

Finnair Plc. Interim report 31 October 2014 at 09:30 EET

1 July - 30 September 2014

· Turnover declined by 2.2 per cent year-on-year to 622.7 million euros (636.9).

· The operational result was 26.7 million euros (43.0).

· Net cash flow from operating activities stood at -8.9 million euros (38.7), and cash flow from investments totalled -15.1 million euros (-85.3).

· Unit cost per available seat kilometre excluding fuel (CASK excl. fuel) decreased by 0.4 per cent from the previous year’s level.

· Unit revenue per available seat kilometre (RASK) fell by 1.6 per cent.

1 January – 30 September 2014

· Turnover declined by 5.9 per cent year-on-year to 1,731.8 million euros (1,839.8).

· The operational result was -27.1 million euros (33.0).

· Net cash flow from operating activities stood at 39.8 million euros (128.4), and cash flow from investments totalled 126.3 million euros (-141.0).

· Unit cost per available seat kilometre excluding fuel (CASK excl. fuel) decreased by 1.0 per cent from the previous year’s level.

· Unit revenue per available seat kilometre (RASK) fell by 3.7 per cent.

· Guidance remains unchanged: Finnair estimates its turnover in 2014 to be significantly lower than in 2013 and its 2014 operating result to show a significant loss.

CEO Pekka Vauramo:

"Finnair’s passenger and cargo revenue for July–September declined year-on-year, causing our turnover to decrease to 622.7 million euros. The decline in unit revenue, caused primarily by the strengthening of the euro against key Asian currencies, continued in the third quarter, although at a slower rate than earlier in the year. Growth in passenger volume and the progress of cost reduction measures were not sufficient to compensate for the weak revenue development, as our operational result fell to 26.7 million euros.

In order for Finnair’s profitability to improve, it is essential that we increase unit revenues and maintain tight control over costs. By the end of September, we had nearly achieved the overall target for our 200-million-euro cost reduction program. The program will be completed by the end of the year. The savings agreements we concluded with pilots and cabin crew in September and October will contribute to our cost competitiveness from 2015 onwards. I am very pleased with the outcome of the negotiations, as they not only produce cost savings, but also enable us to continue to develop our operations together with our personnel.

In August, we announced a number of product upgrades with which we pursue additional revenue. We expect our first A350 aircraft, which join our fleet in late 2015, to show an impact on our profitability from 2016 onwards. A significant improvement in revenue before that, however, would require a substantial recovery in domestic market demand and a substantial decrease in the world market price of fuel.”

Outlook unchanged

The ongoing uncertain economic outlook in Europe and Asia is contributing to weak consumer demand in our main markets. Air traffic is expected to grow moderately in 2014. Finnair, however, will not be able to benefit from that growth without progress in its cost reduction program and its target cost structure in place.

Finnair estimates its turnover in 2014 to be significantly lower than in 2013. Fuel costs are expected to remain high. Due to delays in the personnel cost reduction negotiations and the unfavourable market conditions driving the decline in unit revenue, Finnair estimates that its 2014 operational result will show a significant loss.

Financial reporting

Finnair’s financial statements bulletin for 2014 will be published on Wednesday 11 February 2015.

FINNAIR PLC

Board of Directors

Briefings

Finnair will hold a press conference on 31 October 2014 at 11:00 a.m. and an analyst briefing at 12:30 p.m. at its office at Tietotie 9. An English-language telephone conference for analysts will begin at 3:30 p.m. Finnish time. The conference may be attended by dialling your local access number +358 800 770 306 and using the PIN code 255856#

FINNAIR PLC

Further information:

Finnair communications, 358 9 818 4020, comms(a)finnair.com

Distribution:

NASDAQ OMX Helsinki

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