Quarterly Report • Oct 22, 2019
Quarterly Report
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22 October 2019
Quarterly and full-year figures for 2018 have been restated to reflect the adoption of the IFRS 16 standard, changes in accounting principles relating to aircraft components and the changes in the presentation of profit and loss, balance sheet and cash flow statements. The restated figures were published on 21 March 2019. More information on the restatement is available in Note 20 to the Interim Report.
Global airline traffic is expected to continue growing in the latter half of 2019. However, the operating environment is expected to remain volatile also in the second half of the year. The slowdown in the economies of Finnair's key markets and the continued uncertainties surrounding global trade, including the US-China trade talks and Brexit, could impact the demand for air travel and for cargo.
Finnair raises its capacity forecast for 2019 owing mainly to its new service to Beijing Daxing International Airport. Finnair estimates that capacity growth in 2019 will be between 11-12 per cent. Revenue is expected to grow at a somewhat slower pace than capacity in 2019.
While the current outlook for Finnair's seasonally strongest third quarter remains robust, we have started to see increased uncertainty especially in cargo demand. Finnair estimates that its comparable operating result will be between 4.5-6.0% of revenue in 2019, assuming no material changes in fuel prices and exchange rates.
On the whole, Q3 developed according to the expectations we set out in our Q2 report. Finnair's revenue increased by 7.9 per cent to 870.3 million euros and we carried 4.1 million passengers, a new record for the quarter. Our European traffic performed strongly both in terms of growth and yields, and new North American route to Los Angeles has been well-received. In selected Asian routes, most notably Hong Kong, lower demand was experienced. All in all, Finnair's market share growth continued across traffic categories.
Cargo revenue was impacted by weaker demand across the industry, which also compressed yields in the cargo market significantly; however, Finnair's market share in cargo continued to grow slightly. The demand for travel services picked up in Q3 after a challenging first half of the year, signalling more positive development for the rest of the year.
Our comparable operating profit fell short versus the comparison period and totalled 100.7 million euros in Q3. In addition to cargo, the year-on-year increase in jet fuel price paid (incl. hedging), a decline in the dollar-based discount rate on maintenance reserves and negative exchange rate effects compressed our profitability.
We also continued to renew our distribution strategy. Our new distribution model and partnerships, which utilise new distribution capabilities with full-content agreements, went live in early October. It will be, together with our redesigned Finnair.com website, key to driving better customer experience and revenue development.
We see a shift in operating environment where global uncertainties have translated into slower economic growth. In this environment we will pay more focus on value creating growth and cost efficiency. On-time performance, fuel efficiency and automation of processes are examples of this agenda. We will elaborate on this in the upcoming Capital Markets Day on 12th November.
The continuing impact of global uncertainties, such as Brexit and the US-China trade war, was reflected in our operations in Q3. Traffic grew at slower pace than in the comparison period in Finnair's main markets, routes between Asia and Europe.
Competitors' capacity reductions, especially on some Nordic routes and from Finland to the Mediterranean, had a beneficial effect on the competitive situation in European traffic. Measured in available seat kilometres, scheduled market capacity between origin Helsinki and Finnair's European destinations increased by only 0.3 per cent (15.1). Demand developed well in Asia-Europe transfer
traffic and in intra-European and point-to-point traffic. In European traffic, Finnair's market share increased to 59.7 per cent (56.1).1
Direct market capacity between Finnair's Asian and European destinations grew by 4.0 per cent (8.9) year-on-year. Market capacity grew especially between Europe and South-East Asia, whereas Finnair's capacity growth was focused on Hong Kong and on Japanese routes. Competition increased, especially on routes between China and Finland. Demand from Europe to Asian destinations, especially to Hong Kong, softened during the period. In Asian traffic, Finnair's market share increased to 6.1 per cent (5.8).2
Finnair engages in closer cooperation with certain oneworld partners through participation in joint businesses, namely the Siberian Joint Business (SJB) on flights between Europe and Japan, and the Atlantic Joint Businesses (AJB) on flights between Europe and North America. In both joint businesses, revenue growth was close to capacity growth in Q3, resulting in good development within the joint business traffic.
In Finland, customer demand for travel services improved from the previous year, when exceptionally warm weather weakened demand. However, competitive environment for tour operators operating in Finland remained challenging due to high market capacity. The business environment continues to be challenging also internationally, as illustrated by the bankruptcy of tour operator Thomas Cook in September 2019. Despite the recent global market developments, the demand for packaged holidays in Finland remains stable.
The ongoing global air freight market pressure continued in Q3, decreasing industry freight volumes and yields. The weakening demand also clearly supressed Finnair's cargo revenue. Market softness was visible particularly in Finnair's key cargo markets in Asia. Finnair's global cargo volumes continued to grow year-on-year driven by the capacity increase, but the load factor decreased.
The US dollar, which is the most significant expense currency for Finnair after the euro, appreciated by 4.6 per cent against the euro year-on-year. With regard to key income currencies, the Japanese yen was 8.7 per cent stronger against the euro than in the comparison period. The Chinese yuan appreciated by 1.5 per cent against the euro. The market price of jet fuel was 11.5 per cent lower in the third quarter than in the comparison period, but this decline does not fully impact Finnair's Q3 fuel costs due to its hedging policy. Finnair hedges its fuel purchases and key foreign currency items; hence, market fluctuations are not reflected directly in its result. Finnair's Q3 fuel bill was approximately 17% higher than in the comparison period, and capacity growth explains roughly half of this increase.
Finnair revenue grew by 7.9 per cent to 870.3 million euros (806.9). Passenger revenue grew by 8.7 per cent, ancillary revenue by 8.8 per cent and travel services revenue by 8.6 per cent. Cargo revenue decreased by 3.9 per cent.
Unit revenue (RASK) decreased by 1.5 per cent and amounted to 6.89 euro cents (7.00). The unit revenue at constant currency decreased by 2.5 per cent. RASK decline was impacted by changes in traffic mix, especially longer sectors flown, and soft yields on some Asian routes and in cargo.
| EUR million | Q3/2019 | Q3/2018 | Change % |
|---|---|---|---|
| Passenger revenue | 714.7 | 657.4 | 8.7 |
| Ancillary revenue | 45.7 | 42.0 | 8.8 |
| Cargo | 52.8 | 55.0 | -3.9 |
| Travel services | 57.0 | 52.5 | 8.6 |
| Total | 870.3 | 806.9 | 7.9 |
1 Based on external sources (capacity data from SRS Analyser and market share data based on DDS passenger volume estimates for July-August). The basis for calculation is Finnair's non-seasonal destinations.
| Passenger revenue | ASK | RPK | PLF | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Traffic area | MEUR | Change, % | Mill. km | Change, % | Mill. km | Change, % | % | Change, %-p |
|
| Asia | 324.8 | 4.5 | 6,113.6 | 11.1 | 5,330.5 | 8.2 | 87.2 | -2.3 | |
| North Atlantic | 58.5 | 26.0 | 1,153.8 | 28.2 | 1,047.3 | 33.7 | 90.8 | 3.7 | |
| Europe | 284.6 | 10.1 | 5,021.2 | 4.9 | 4,268.5 | 11.9 | 85.0 | 5.3 | |
| Domestic | 32.8 | 0.2 | 335.0 | -0.9 | 230.7 | 6.3 | 68.9 | 4.7 | |
| Unallocated | 14.1 | 57.4 | |||||||
| Total | 714.7 | 8.7 | 12,623.6 | 9.5 | 10,877.0 | 11.6 | 86.2 | 1.7 |
Passenger traffic capacity, measured in Available Seat Kilometres (ASK), grew by 9.5 per cent overall against the comparison period. The number of passengers increased by 11.9 per cent to 4,088,200 passengers, a new record for Q3. Traffic measured in Revenue Passenger Kilometres (RPK) grew by 11.6 per cent and the passenger load factor (PLF) increased by 1.7 percentage points to 86.2 per cent.
In long-haul traffic, capacity increased following the three new A350 aircraft that entered service in December 2018, February 2019 and April 2019 respectively. The maximum weekly number of flights to Asia in summer season 2019 was 104 (97). In Asian traffic, ASKs increased by 11.1 per cent. The capacity growth was allocated, in particular, to routes to Osaka and Hong Kong. In total Asian traffic, RPKs increased by 8.2 per cent and the PLF decreased by 2.3 percentage points to 87.2 per cent.
Capacity in North Atlantic traffic increased by 28.2 per cent year-on-year. The growth was allocated specifically to a new route, Los Angeles, that was opened at the end of March, as well as additional frequencies to San Francisco. In total North Atlantic traffic, RPKs increased by 33.7 per cent and the PLF increased by 3.7 percentage points to 90.8 per cent.
In European traffic, capacity increased due to the additional seats that were installed on some of the existing Airbus narrow-body aircraft, use of wet-leases and on average longer flights than in the comparison period. ASKs grew by 4.9 per cent, and the new capacity was allocated to various destinations. RPKs increased by 11.9 per cent and the PLF was up by 5.3 percentage points to 85.0 per cent. Domestic traffic capacity decreased by 0.9 per cent. RPKs increased in domestic traffic by 6.3 per cent and the PLF increased by 4.7 percentage points to 68.9 per cent.
Ancillary revenue increased by 8.8 per cent and amounted to 45.7 million euros (42.0), or 11.18 euros per passenger (11.50). Advance seat reservations, service charges and excess baggage were the largest ancillary categories.
The slowdown in global air cargo demand was also visible in Finnair's Q3 cargo volumes. Available scheduled cargo tonne kilometres increased by 13.9 per cent, whereas revenue cargo tonne kilometres increased by 8.5 per cent. Cargo revenue decreased by 3.9 per cent, amounting to 52.8 million euros (55.0).
In Q3, travel services performed better than expected despite the market overcapacity and very competitive environment. Total number of Travel Services passengers grew by 10.6 per cent. The load factor in Aurinkomatkat's fixed seat allotment was 95.6 per cent. Travel Services revenue increased by 8.6 per cent to 57.0 million euros (52.5). Positive development in Travel Services passengers and revenue was driven by both fixed allotment-based holidays as well as dynamic products such as Finnair Holidays and Aurinkomatkat City breaks.
Finnair's operating expenses increased by 10.9 per cent to 782.9 million euros (706.2). Unit cost (CASK) increased by 2.0 per cent and totalled 6.10 euro cents (5.97). CASK excluding fuel at constant currency decreased by 0.8 per cent.
Operating expenses excluding fuel increased by 9.1 per cent and amounted to 592.7 million euros (543.4). Fuel costs, including hedging results and emissions trading costs, increased by 16.8 per cent to 190.1 million euros (162.7). The cost was up due to a 13 million euro increase in fuel price2 paid and Finnair's capacity growth. Fuel efficiency (as measured by fuel consumption per ASK) improved by 1.3 per cent. Fuel consumption per RTK, which also accounts for developments in both passenger and cargo load factors, improved by 2.2 per cent.
As of 1 January 2019, staff costs include all staff related costs, whereas earlier staff travel costs and training, for example, were presented in other costs. Staff costs increased by 6.0 per cent to 131.7 million euros (124.3). Staff costs grew with the increase in the average number of people employed and capacity growth (affecting volume related travel costs).
Passenger and handling costs increased by 8.8 per cent to 127.7 million (117.5), driven by increased volumes in both passenger and cargo traffic. The category includes also tour operation expenses.
Aircraft materials and overhaul costs increased by 12.2 per cent to 50.7 million euros (45.2). Fleet growth and price escalations were key drivers behind the growth, but the decline in the USD-based discount rate of maintenance reserves increased costs as well. Fleet growth also increased depreciation and impairment costs. Traffic charges increased due to traffic growth, the strengthening of the US dollar
2 Fuel price including impact of currencies and hedging.
against euro and contractual price escalations. Capacity rents, covering purchased traffic from Norra and any wet leases or cargo rents, were at the comparison period's level. Property, IT and other expenses increased slightly from the comparison period.
Finnair's comparable EBITDA was 181.9 million euros (191.4). The comparable operating result, or operating result excluding changes in the value of foreign currency-denominated fleet maintenance reserves, changes in the fair value of derivatives, capital gains and other items affecting comparability, decreased to 100.7 million euros (118.2).
Unrealised changes in foreign currencies of fleet overhaul provisions were -5.6 million euros (-0.8) and fair value changes of derivatives where hedge accounting is not applied totalled 0.5 million euros (-1.2). Items affecting comparability (sales gains or losses and/or restructuring costs) totalled -0.6 million euros during the quarter (-0.8). The operating result totalled 94.9 million euros (115.5).
Financial expenses were -23.4 million euros (-27.6) and they include also interest expenses related to lease liabilities and foreign exchange losses/gains associated with USD denominated aircraft lease payments and liabilities. In Q3, foreign exchange losses totalled -2.7 million euros (-6.5). In the comparison period, the foreign exchange loss was almost entirely related to unhedged lease liabilities. Finnair's result before taxes was 72.0 million euros (87.7) and the result after taxes was 57.6 million euros (70.2).
Finnair revenue grew by 7.8 per cent to 2,336.2 million euros (2,166.2). Passenger revenue grew by 8.6 per cent, ancillary revenue by 8.2 per cent, cargo revenue by 5.2 per cent and travel services revenue by 1.7 per cent.
Unit revenue (RASK) decreased by 3.3 per cent and amounted to 6.56 euro cents (6.79). The unit revenue at constant currency decreased by 3.7 per cent.
| EUR million | Q1-Q3/2019 | Q1-Q3/2018 | Change % |
|---|---|---|---|
| Passenger revenue | 1,877.4 | 1,728.0 | 8.6 |
| Ancillary revenue | 131.7 | 121.6 | 8.2 |
| Cargo | 154.9 | 147.2 | 5.2 |
| Travel services | 172.3 | 169,4 | 1.7 |
| Total | 2,336.2 | 2,166.2 | 7.8 |
| Passenger revenue | ASK | RPK | PLF | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Traffic area | MEUR | Change, % | Mill. km | Change, % | Mill. km | Change, % | % | Change, %-p |
|
| Asia | 828.2 | 7.4 | 17,561.2 | 10.5 | 14,752.9 | 5.9 | 84.0 | -3.6 | |
| North Atlantic | 136.8 | 27.9 | 3,056.3 | 28.8 | 2,662.1 | 31.3 | 87.1 | 1.7 | |
| Europe | 748.8 | 9.2 | 13,580.3 | 10.8 | 11,056.7 | 13.4 | 81.4 | 1.9 | |
| Domestic | 128.5 | -0.6 | 1,402.8 | 1.5 | 911.3 | 1.5 | 65.0 | 0.0 | |
| Unallocated | 35.0 | 1.1 | |||||||
| Total | 1,877.4 | 8.6 | 35,600.7 | 11.6 | 29,383.0 | 10.4 | 82.5 | -0.8 |
Passenger traffic capacity, measured in Available Seat Kilometres (ASK), grew by 11.6 per cent overall against the comparison period. The number of passengers increased by 10.1 per cent to 11,146,700 passengers, a new record for the period. Traffic measured in Revenue Passenger Kilometres (RPK) grew by 10.4 per cent and the passenger load factor (PLF) decreased by 0.8 percentage points to 82.5 per cent.
In long-haul traffic, capacity increased year-on-year following the three new A350 aircraft that entered service after the comparison period. The maximum weekly number of flights to Asia in the winter season 2018/19 was 101 (89 in 2017/18) and in summer season 2019 it was 104 (97). In Asian traffic, ASKs increased by 10.5 per cent. The capacity growth was allocated especially to additional flights to Hong Kong and to Japanese destinations, and to a new year-round destination, Nanjing. In total Asian traffic, RPKs increased by 5.9 per cent and the PLF decreased by 3.6 percentage points to 84.0 per cent.
Capacity on the North Atlantic traffic increased by 28.8 per cent year-on-year, and additional capacity was directed especially on a new route to Los Angeles that was opened at the end of March and additional frequencies to San Francisco, Miami and Chicago. RPKs increased by 31.3 per cent and the PLF increased by 1.7 percentage points to 87.1 per cent.
In European traffic, capacity increased due to the additional seats that were installed on some of the existing Airbus narrow-body aircraft. ASKs grew by 10.8 per cent. The new capacity was allocated to the longer southern European routes, capacity additions to central European destinations and to the UK and opening of new destinations such as Lisbon. In addition, increased use of wet leases and operating certain routes with widebodies for cargo purposes increased ASKs. RPKs increased by 13.4 per cent and the PLF was up by 1.9 percentage points to 81.4 per cent. Domestic traffic capacity increased by 1.5 per cent. Also RPKs were up by 1.5 per cent and the PLF was flat at 65.0 per cent.
Ancillary revenue increased by 8.2 per cent and amounted to 131.7 million euros (121.6), or 11.81 euros per passenger (12.01). Advance seat reservations, service charges, inflight sales and excess baggage were the largest ancillary categories.
Available scheduled cargo tonne kilometres increased by 17.1 per cent, whereas revenue cargo tonne kilometres increased by 14.4 per cent. The cargo revenue increased by 5.2 per cent, amounting to 154.9 million euros (147.2).
The total number of travel services passengers grew by 8.6 per cent. The load factor in Aurinkomatkat's fixed seat allotment was 93.9 per cent (93.7). The largest passenger growth came from the growth of Finnair Holidays and Aurinkomatkat city holidays. Travel Services revenue increased only by 1.7 per cent to 172.3 million euros (169.4), and it was driven by weak H1 performance.
Finnair's operating expenses increased by 10.7 per cent to 2,245.5 million euros (2,029.4). Unit cost (CASK) increased by 0.1 per cent and totalled 6.19 euro cents (6.19). CASK excluding fuel at constant currency decreased by 2.1 per cent.
Operating expenses excluding fuel increased by 8.5 per cent and amounted to 1,729.6 million euros (1,593.8). Fuel costs, including hedging results and emissions trading costs, increased by 18.4 per cent to 515.9 million euros (435.6). Of this cost increase, 32 million euro is due to the increase in fuel price3 paid and Finnair's capacity growth explains the rest. Fuel efficiency (as measured by fuel consumption per ASK) improved by 1.2 per cent. Fuel consumption per RTK, which also accounts for developments in both passenger and cargo load factors, improved by 0.6 per cent.
As of 1 January 2019, staff costs include all staff related costs, whereas earlier staff travel costs and training, for example, were presented in other costs. Staff costs increased by 4.7 per cent to 398.3 million euros (380.4). Staff costs grew with the increase in the average number of people employed by 6.8 per cent and capacity growth (affecting volume related travel costs), but the growth was in part netted by the cancellation of the pilots' long-term incentive scheme in Q4 2018 and lower volumes of entering flight crew that impacted training costs.
Passenger and handling costs increased by 8.4 per cent to 371.9 million (343.1), driven by increased volumes in both passenger and cargo traffic. The category includes also tour operation expenses.
Fleet growth, annual price escalations, the decline in USD-based discount rate of maintenance reserves and exceptional maintenance events increased aircraft materials and overhaul costs by 23.2 per cent to 147.7 million euros (120.0). Fleet growth also increased depreciation and impairment costs. Traffic charges increased due to traffic growth and contractual price escalations. Increase in capacity rents, covering purchased traffic from Norra and any wet leases or cargo rents, was mainly driven by higher utilisation of wet leases related to regional fleet's upgrade program. Property, IT and other expenses were at the comparison period's level.
3 Fuel price including impact of currencies and hedging.
Finnair's comparable EBITDA was 367.6 million euros (408.5). The comparable operating result, or operating result excluding changes in the value of foreign currency-denominated fleet maintenance reserves, changes in the fair value of derivatives, capital gains and other items affecting comparability, decreased to 131.7 million euros (191.9).
Unrealised changes in foreign currencies of fleet overhaul provisions were -5.7 million euros (-3.8) and fair value changes of derivatives where hedge accounting is not applied totalled 0.5 million euros (-3.9). Items affecting comparability (sales gains or losses or restructuring costs) totalled -1.2 million euros during the period (-1.0). The operating result totalled 125.3 million euros (183.1).
Financial expenses were -65.4 million euros (-96.7) and they include also interest expenses related to lease liabilities and foreign exchange losses associated with USD denominated aircraft lease payments and liabilities. In the current period, impact from currencies on financial expenses was -2.2 million euros, whereas in the comparison period, -33.7 million euros of the expenses related to foreign exchange losses. In the comparison period, the foreign exchange loss was almost entirely related to unhedged lease liabilities. Finnair's result before taxes was 62.6 million euros (85.2) and the result after taxes was 50.1 million euros (68.2).
The Group's balance sheet totalled 4,037.2 million euros at the end of September (31 Dec 2018: 3,943.6). Advance payments related to A350 aircraft and the purchases of two A350 aircraft increased fleet by 174.5 million euros during the first nine months of the year, and right-of-use fleet decreased by 66.5 million euros mainly due to depreciation. Receivables related to revenue increased driven by normal seasonality of the business to 199.5 million euros (31 Dec 2018: 152.4).
The profit for the period increased shareholders' equity, whereas the payment of dividends in early April had the opposite effect. The increase in the fair value of jet fuel used in hedge accounting had a strengthening effect on equity due to the increase in the jet fuel price. Shareholders' equity totalled 921.0 million euros (31 Dec 2018: 918.5), or 7.22 euros per share (31 Dec 2018: 7.20).
Shareholders' equity includes a fair value reserve that is affected by changes in the fair values of jet fuel and currency derivatives used for hedging as well as actuarial gains and losses related to pilots' defined benefit plans according to IAS 19. The value of the item at the end of September was -39.6 million euros after deferred taxes (31 Dec 2018: -27.2).
Finnair has a strong financial position, which supports business development and future investments. Following the adoption of IFRS 16, repayments of lease liabilities were moved from operating cash flow to financing cash flow as of 1 January 2019. In January–September, net cash flow from operating activities amounted to 444.4 million euros (435.3). Net cash flow from investments amounted to - 327.5 million euros (-151.1).
The equity ratio on 30 September 2019 stood at 22.8 per cent (31 Dec 2018: 23.3) and gearing was 73.6 per cent (31 Dec 2018: 76.9). Interest-bearing liabilities amounted to 1,698.7 million euros (31.12.2018: 1,779.8), of which the share of lease liabilities amounted to 1,105.3 million euros (31 Dec 2018: 1,159.3). Interest-bearing net debt was 677.9 million euros (31 Dec 2018: 706.7).
The company's liquidity was strong during the period under review. The Group's cash funds at periodend amounted to 1,020.9 million euros (31 Dec 2018: 1,073.1). During the period, Finnair refinanced its unused 175 million euro unsecured syndicated revolving credit facility, with the same size and terms substantially in line with the previous facility. The new facility has a maturity date in January 2022, and it includes two one-year extension options.
Finnair has a 200 million euro short-term commercial paper program, which was unused at the end of June. Net cash flow from financing amounted to -163.7 million euros (-226.0). Financial income was 2.8 million euros (-1.2), while financial expenses were -65.4 million euros (-96.7).
Capital expenditure excluding advance payments totalled 363.1 million euros (221.6) and was primarily related to fleet investments. Cash flow from investments totalled -333.8 million euros (-72.3), including advance payments. Net change in financial assets maturing after more than three months totalled 6.3 million (-79.6). Net cash flow from investments amounted to -327.5 million euros (-151.1).
Cash flow from investments for the financial year 2019 relate mainly to fleet and are expected to total approximately 480 million euros, including advance payments. Investment cash flow includes both committed investments as well as estimates for planned, but not yet committed, investments.
The current favourable state of the credit markets and Finnair's good debt capacity support the financing of future fixed-asset investments on competitive terms. The company has 40 unencumbered aircraft, which account for approximately 50 per cent of the balance sheet value of the entire fleet of 2,262.5 million euros.4
Finnair's fleet is managed by Finnair Aircraft Finance Oy, a wholly-owned subsidiary of Finnair. At the end of third quarter, Finnair itself operated 59 aircraft, of which 22 were wide-body and 37 narrowbody aircraft. Of these aircraft, 32 were owned by Finnair Aircraft Finance Oy and 27 were leased.
At the end of the third quarter, the average age of the fleet operated by Finnair was 10 years.
| Fleet operated by Finnair* |
Seats | # | Change from |
Own** | Leased | Average age |
Ordered |
|---|---|---|---|---|---|---|---|
| 30.9.2019 | 31.12.2018 | 30.9.2019 | |||||
| Narrow-body fleet | |||||||
| Airbus A319 | 144 | 8 | 7 | 1 | 18.4 | ||
| Airbus A320 | 174 | 10 | 8 | 2 | 17.1 | ||
| Airbus A321 | 209 | 19 | 4 | 15 | 8.3 | ||
| Wide-body fleet | |||||||
| Airbus A330 | 289/263 | 8 | 4 | 4 | 9.9 | ||
| Airbus A350 | 297/336 | 14 | 2 | 9 | 5 | 2.6 | 5 |
| Total | 59 | 2 | 32 | 27 | 10.0 | 5 |
* Finnair's Air Operator Certificate (AOC).
** Includes JOLCO-financed (Japanese Operating Lease with Call Option) A350 aircraft.
Fleet renewal
At the end of the third quarter, Finnair operated fourteen A350 XWB aircraft, which have been delivered between 2015–2019. According to the current delivery schedule, Finnair will receive the remaining five A350 XWB aircraft as follows: two in H1 2020, two in 2021 and one in 2022. Finnair's investment commitments for property, plant and equipment, totalling 849 million euros, include the upcoming investments in the wide-body fleet.
Finnair has the possibility to adjust the size of its fleet in line with demand forecasts through the staggered maturities of its lease agreements and changes in the number of owned aircraft.
4 Fleet value includes right of use assets as well as prepayments of future aircraft deliveries.
Nordic Regional Airlines (Norra) operates a fleet of 24 aircraft for Finnair on a contract flying basis. All of the aircraft operated by Norra are leased from Finnair Aircraft Finance Oy.
| Fleet operated by Norra* |
Seats | # | Change from |
Own** | Leased | Average age |
Ordered |
|---|---|---|---|---|---|---|---|
| 30.9.2019 | 31.12.2018 | 30.9.2019 | |||||
| ATR | 68-72 | 12 | 6 | 6 | 10.2 | ||
| Embraer E190 | 100 | 12 | 9 | 3 | 11.3 | ||
| Total | 24 | 0 | 15 | 9 | 10.7 |
* Nordic Regional Airlines Oy's Air Operator Certificate (AOC).
Finnair is targeting sustainable, profitable growth. Safety is the foundation of Finnair's strategy, and Finnair continues to implement its strategy in four focus areas, namely Growth, Customer experience, People experience and Transformation. Two additional themes – embedded in all operations, supporting strategy implementation and value creation – are Sustainability and Efficiency.
In Q3, Finnair continued to grow its airline business by opening new routes, by focusing on its selected strategic focus markets and by strengthening Finnair's revenue optimisation and distribution. The growth was driven by the increase in capacity. Capacity allocation and traffic development are discussed in detail under Financial performance.
To grow and win in the competitive airline market, Finnair must excel in everyday customer experience. In the review period, focus was put especially on customer care processes, feedback handling and ancillary and on-board service development. Finnair's Net Promoter Score (NPS) measuring customer satisfaction was 38 (49) 5 and Finnair's arrival punctuality was 80.2 per cent (81.8).
Finnair sees that excellent people experience is a prerequisite for excellent customer experience and growth. It is generated by competent and committed personnel. In the review period, development of competencies, leadership, new ways of working and well-being at work were the focus areas in the development of the people experience.
Finnair employed an average of 6,902 (6,499) people in Q3 2019, which is 6.2 per cent more than in the corresponding period. The number of employees decreased during Q3 by 158 or -2.3 per cent, totalling 6,823 at the end of September (6,447). Altogether 80 new people were hired to Finnair in Q3 2019. The increase in personnel was mostly due to growth in the number of Suntours Travel Guides, Finnair Kitchen Catering Workers and Finnair Business Services (FBS) personnel. The attrition rate for the last 12 months was 3.8 per cent (3.0). LTIF (Lost Time Incident Frequency), which measures the frequency of accidents at the company level, was 11.1 (16.4) in Q3, and the number of absences due to illness was slightly higher than in the comparison period and was 4.49 per cent (4.23).
5 A new Customer satisfaction survey was launched in beginning of January 2019. In the new survey, NPS is calculated based on responses from all customers starting from beginning of 2019. In 2018, NPS was calculated based on responses from Finnair Plus members only and therefore these results are not comparable.
Finnair is on a transformation journey towards a more customer-oriented and experience-focused company in all stages of travel. Transformation covers also the development of productivity. Digitalisation is one of the main drivers and enablers in this transformation. In January–September, focus was on developing and providing new digital tools to personnel.
During Q3, the average number of monthly unique website visitors totalled 2.3 million (1.6) 6 . The renewed Finnair.com website, which makes it easier for the customer to buy tickets and services, has already been opened in over 30 markets. The number of active users of the Finnair mobile application increased by 29.9 per cent to 355,000. Direct sales in Finnair's digital channels represented 24.5 per cent (21.8) of all tickets sold and 46.2 per cent of ancillary sales (51.6).
Economic, social and environmental sustainability is integral to Finnair's overall business strategy and operations. Finnair wants to be a responsible global citizen and respond to its stakeholders' needs, including those concerned with corporate responsibility. Finnair cooperates with industry operators and the authorities in areas such as reducing the climate impacts of aviation, promoting equality and inclusion and the consideration of sustainability within the supply chain.
Finnair's corporate responsibility is reflected in its strategy and vision as well as its values of commitment to care, simplicity and courage. Its corporate responsibility strategy is crystallised in a three-pronged commitment: cleaner, caring and collaborative, and it embeds sustainability even deeper into the group strategy, brand and product development. The program measures are geared to contribute to cost containment and risk mitigation as well as value creation.
Finnair's ethical business principles are outlined in its Code of Conduct. The Code applies to all Finnair personnel and all locations. Finnair requires that its suppliers comply with ethical standards essentially similar to those which Finnair complies with in its own operations. Finnair's Supplier Code of Conduct provides clear principles to ensure ethical purchasing, including zero tolerance for corruption.
Safety has the highest priority in Finnair operations. Finnair is committed to implementing, maintaining and constantly developing strategies and processes to ensure that all its aviation activities take place under an appropriate allocation of organisational resources. This is to achieve the highest level of safety performance and compliance with the regulatory requirements while delivering our services.
Finnair is also committed to the sector's common goals of carbon-neutral growth from 2020 onwards and cutting emissions from the 2005 level in half by 2050. In addition, Finnair has set an ambitious target to cut 17 per cent of its carbon dioxide emissions/RTK (Revenue Tonne Kilometre) by 2020 (from the 2013 level). Finnair estimates that this target will not be reached in full, but that its carbon dioxide emissions/RTK will decrease by 12–13 per cent by 2020 from the 2013 level.
From January 2019 on, Finnair has offered its customers the possibility of offsetting the CO2 emissions of their flights through an emissions reduction project, and/or through the support of the use of biofuel on Finnair flights. The Push for Change service is available on our web pages in the Finnair Shop, and can be bought before, during or after a flight. Customers can also use their Finnair Plus points to buy the service. By the end of September, a total of 8,700 products were sold to compensate for emissions through either a carbon reduction project or biofuel. Total funds for emission compensation amounted to 55,000 euros. Finnair flew its first two biofuel flights backed by the "Push for change" carbon decreasing initiative in early August from San Francisco to Helsinki. The flights were flown with a biofuel mix of 12 percent, reducing the total CO2 emissions for the two flights by approximately 32 tons.
The key performance indicators for corporate responsibility are presented in the Key Figures table of this interim report.
6 The measurement method was changed in Q2 2018 due to EU GDPR.
During the third quarter, three members of Finnair's Executive Board changed. Finnair's CFO Pekka Vähähyyppä left the company on July 1, 2019, and his successor Mika Stirkkinen took up the position on the same day. Previously, Mr Stirkkinen was responsible for Finnair's revenue management and pricing, and prior to that he held several financial management positions at Finnair.
Eija Hakakari, Finnair's SVP, Human Resources and Katri Harra-Salonen, Finnair's Chief Digital Officer, left the company on September 30, 2019. Johanna Karppi, appointed Ms Hakakari's successor, and Tomi Pienimäki, appointed successor to Ms Harra-Salonen, took up their duties on 1 October 2019. Johanna Karppi joined Finnair from Terveystalo, where she was SVP, Human Resources. She has previously held HR leadership positions at both Rautaruukki and Orion. Tomi Pienimäki has served as the CEO of Vincit and Jolla, and as the Chief Information Officer of Itella and Hackman.
Finnair's market capitalization was 822.0 million euros at the end of September (31/12/2018: 907.8). The closing price of the share on 30 September 2019 was 6.42 euros (31/12/2018: 7.09 euros). During January–September, the highest price for the Finnair Plc share on the Nasdaq Helsinki was 8.56 euros, the lowest price 5.93 euros and the average price 7.25 euros. Some 29.8 million company shares, with a total value of 215.4 million euros, were traded in Nasdaq Helsinki.
The number of Finnair shares recorded in the Trade Register was 128,136,115 at the end of the period. The Finnish state owned 55.8 per cent (55.8) of Finnair's shares, while 14.9 per cent (19.5) were held by foreign investors or in the name of a nominee.
In Q3, Finnair did not exercise the authorisation granted by the AGM 2019 to acquire or dispose of, its own shares. In Q1, Finnair transferred, using the authorisation granted by the AGM 2018, a total of 105,112 own shares as incentives to the participants of the FlyShare employee share savings plan. It also transferred 149,894 own shares as a reward to the key personnel included in Finnair's sharebased incentive scheme 2015–2017 in March.
The shares remaining on the joint book-entry account, totalling 16,651 after Finnair Plc's AGM 2019 that decided on the forfeiture of the shares registered on the joint book-entry account and the rights carried by such shares, were transferred to Finnair Plc's book-entry account on 9 April 2019. After the transfer the total number of own shares owned by Finnair will be 558,653, which corresponds to 0.44 per cent of Finnair Plc's total number of shares and votes.
Finnair's Annual General Meeting was held in Helsinki on 20 March 2019. The AGM authorised the Board of Directors to decide on the repurchase of the company's own shares and/or on the acceptance as pledge and on the disposal of own shares held by the company. The authorisation shall not exceed 5,000,000 shares, which corresponds to approximately 3.9 per cent of all the shares in the company. The authorisations are effective for a period of 18 months from the resolution of the AGM.
The AGM also authorised the Board of Directors to decide on donations up to an aggregate maximum of EUR 250,000 for charitable or corresponding purposes. The authorisation is effective until the next Annual General Meeting.
The resolutions of the AGM are available in full on the company's website https://investors.finnair.com/en/governance/general-meetings/agm-2019.
Aviation is an industry that is sensitive to global economic cycles and reacts quickly to external disruptions, seasonal variation and economic trends. In the implementation of its strategy, Finnair is faced with various risks and opportunities. Finnair has a comprehensive risk management process to ensure that risks are identified and mitigated as much as possible, although many risks are not within the company's full control.
The risks and uncertainties described below are considered as potentially having a significant impact on Finnair's business, financial result and future outlook within the next 12 months. This list is not intended to be exhaustive.
Exceptional variations in the fuel price affect capacity growth in Finnair's main markets. This together with changes in ticket prices pose a risk to Finnair's revenue development, as do sudden adverse changes in the foreign exchange rates and slowing growth in demand. Generally, Finnair aims to pass exceptional variations in the fuel price to customers via ticket prices, however, in case of intense competition and overcapacity in a market, this may not be possible.
Capacity increases and product improvements among Finnair's existing or new competitors may have an impact on the demand for, and yield of, Finnair's services. In addition, joint operations involving closer cooperation than airline alliances and joint businesses are expected to develop further. Potential industry consolidation could have a significant impact on the competitor landscape.
The achievement of the additional revenue and efficiency improvements sought through Finnair's digital business transformation and new services involves risks, as does the implementation of Finnair's strategy and fleet renewal. Finnair's growth plan and its resourcing could generate further cost pressure and operational challenges in the short term.
The aviation industry is affected by a number of regulatory projects at the EU and international levels. Estimating the impacts of the regulatory changes on airlines' operational activities and/or costs in advance is difficult. Examples of such regulatory projects include international regulation related to emissions trading, noise regulation and other environmental regulation, EU and national regulations on privacy and consumer protection and the decisions made by the Court of Justice of the European Union regarding flight passengers' rights. Interpretation of these decisions involves risks, such as those relating to the injunction sought by the Finnish Consumer Ombudsman regarding Finnair's compensation practices. On 4 January 2019, the Market Court of Justice rejected the Consumer Ombudsman's action against Finnair. The Consumer Ombudsman has applied for a leave to appeal the case in the Supreme Court.
Geopolitical uncertainty, the threat of trade wars, the threat of terrorism and cyber-attacks as well as other potential external disruptions may, if they materialise, significantly affect the demand for air travel and Finnair's operations. Potentially increasing protectionism in the political environment may also hinder the market access required for the implementation of Finnair's growth plan. With respect to Brexit, it is unclear whether, when and on which terms Brexit may occur. In the event of a no-deal Brexit, one of the likely consequences is that the traffic rights of the UK and European airlines regarding flights between and via the UK and EU will be reduced, which may have a considerable effect on the airlines' businesses, including that of Finnair. Such effects may be negative or positive and may not be the same for all airlines.
The construction work associated with the extension of Helsinki Airport, which will continue until 2020, may cause traffic disruptions. Finnair is engaged in close cooperation with Finavia in order to minimise the negative impacts of the expansion project on Finnair's operations. The expansion will facilitate the increase of the airport's annual passenger volume to 20 million and enable the implementation of Finnair's growth strategy.
Finnair's risk management and risks related to the company's operations are described in more detail on the company's website at https://investors.finnair.com/en/governance/risk-management.
Due to the seasonal variation of the airline business, the Group's revenue and profit are generally at their lowest in the first quarter and at their highest in the third quarter of the year. The growing proportional share of Asian traffic increases seasonal fluctuation due to destination-specific seasons in Asian leisure and business travel.
In addition to operational activities and market conditions, the fuel price development has a key impact on Finnair's result, as fuel costs are the company's most significant expense item. Finnair's foreign exchange risk arises primarily from fuel and aircraft purchases, divestments of aircraft, aircraft lease payments, aircraft maintenance, overflight royalties and foreign currency revenue. Significant dollar-denominated expense items are fuel costs and aircraft lease payments. The largest investments, namely the acquisition of aircraft and their spare parts, are also mainly denominated in US dollars. The most significant income currencies after the euro are the Japanese yen, the Chinese yuan, the US dollar and the Swedish krona.
The company hedges its currency, interest rate and jet fuel exposure using a variety of derivative instruments, such as forward contracts, swaps and options, in compliance with the risk management policy approved annually by the Board of Directors. Fuel purchases are hedged for 24 months forward on a rolling basis, and the degree of hedging decreases towards the end of the hedging period. The higher and lower limits of the degree of hedging are 90 and 60 per cent for the following six months.
| Sensitivities in business operations, impact on comparable operating profit | |||||
|---|---|---|---|---|---|
| (rolling 12 months from date of financial statements) | 1 percentage (point) change | ||||
| Passenger load factor (PLF, %) | EUR 31 million | ||||
| Average yield of passenger traffic | EUR 24 million | ||||
| Unit cost (CASK excl. fuel) | EUR 24 million |
| Fuel sensitivities | 10% change | 10% change, taking |
|---|---|---|
| (rolling 12 months from date of financial statements) | without hedging | hedging into account |
| Fuel | EUR 66 million | EUR 31 million |
| Fuel hedging ratios and average hedged price | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (rolling 12 months from date of financial statements) | Hedging ratio | Average hedge price, USD/ton* |
|||||||||
| Q4 2019 | 73% | 681 | |||||||||
| Q1 2020 | 69% | 686 | |||||||||
| Q2 2020 | 59% | 682 | |||||||||
| Q3 2020 | 48% | 670 |
* Average of swaps and bought call options strikes.
| Currency distribution, % |
Q3 2019 |
Q3 2018 |
Q1-Q3 2019 |
Q1-Q3 2018 |
2018 | USD and JPY cash flows) |
Currency sensitivities (rolling 12 months from date of financial statements for operational |
||
|---|---|---|---|---|---|---|---|---|---|
| Sales currencies | 10% change without hedging |
10% change, taking hedging into account |
|||||||
| EUR | 47 | 48 | 52 | 55 | 55 | - | - | ||
| USD* | 6 | 5 | 5 | 4 | 4 | see below | see below | see below | |
| JPY | 14 | 14 | 12 | 11 | 10 | EUR 37 m | EUR 15 m | 66% | |
| CNY | 9 | 10 | 7 | 7 | 7 | - | - | ||
| KRW | 3 | 3 | 3 | 3 | 3 | - | - | ||
| SEK | 2 | 2 | 3 | 3 | 3 | - | - | ||
| Other | 18 | 17 | 18 | 17 | 17 | - | - | ||
| Purchase currencies | |||||||||
| EUR | 56 | 58 | 57 | 61 | 61 | - | - | ||
| USD* | 37 | 35 | 36 | 32 | 32 | EUR 85 m | EUR 26 m | 65% | |
| Other | 7 | 7 | 7 | 7 | 7 |
* Hedging ratio and sensitivity analysis for USD basket, which consists of net cash flows in USD and HKD. The sensitivity analysis assumes that the correlation of the Hong Kong dollar with the US dollar is strong.
Finnair's asset-related foreign currency exposure increased with the recognition of the present value of qualifying operating lease liabilities in balance sheet as right-of-use assets. The sensitivities related to interest expenses (related to lease liabilities) and foreign exchange losses/gains associated with USD denominated aircraft lease payments and liabilities are not included in the sensitivity figures in the above table, that describe impacts on comparable operating result. Unrealized foreign exchange losses/gains caused by the translation of the USD denominated liability will have an impact on Finnair's net result. In the future, the effect and amount of the foreign currency exchange could be positive or negative, depending on the USD-rate at the closing date. As at January 2019, Finnair mitigates the foreign exchange volatility introduced by this difference by using hedges and is looking for alternative solutions to hedge this position. The annual effect in net result going forward is dependent on the size of the qualifying operating lease portfolio, the duration of the leases and hedging ratio. At the end of September 2019, hedging ratio of USD denominated aircraft lease payments and liabilities was approximately 80%.
IFRS interpretation committee (IFRIC) made an agenda decision in September 2019 of Compensations for Delays or Cancellations (IFRS 15 Revenue from Contracts with Customers). IFRIC concluded in its decision that customer compensations for delays or cancellations is a variable consideration in the contract. Therefore, it should be recognized as an adjustment to revenue. Finnair has previously considered the customer compensations as penalties and consequently accounted for those in other operating expenses. In accordance with the IFRIC decision, Finnair will during Q4 2019 revise its accounting and recognize customer compensations for delays and cancellations as an adjustment to revenue. Adjusted amount is not material for Finnair.
Finnair is adding capacity to Japan with daily flights to Tokyo's Haneda Airport as of the start of the 2020 summer season, subject to slot availability. The new frequencies to and from Haneda will be in addition to Finnair's daily flights to Tokyo's Narita Airport. The new flights from Haneda will be codeshare flights with Finnair´s long-term partner, Japan Airlines, which has a wide network of connecting flights from Haneda onwards to other destinations in Japan.
The publication dates of Finnair's financial reports in 2020 are the following:
FINNAIR PLC Board of Directors
-
Finnair will hold a results press conference (in Finnish) on 22 October 2019 at 11:00 a.m. at its office located at Tietotie 9, Vantaa.
An English-language telephone conference and webcast will begin at 1:00 p.m. Finnish time. The conference may be attended by dialling your local access number +358 9 7479 0361 (Finland), 0200 880 389 (Sweden), 0800 358 6377 (UK) or +44 (0)330 336 9105 (all other countries). The confirmation code is 7032340. To join the live webcast, please register at: https://slideassist.webcasts.com/starthere.jsp?ei=1267168
Chief Financial Officer Mika Stirkkinen, tel. +358 9 818 4960 [email protected] Director, Financial Communications Mari Reponen, tel. +358 9 818 2037, [email protected]
| Q1-Q3 | Q1-Q3 | |||||||
|---|---|---|---|---|---|---|---|---|
| Key figures | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 | LTM |
| Revenue and profitability | ||||||||
| Revenue, EUR million | 870.3 | 806.9 | 7.9 | 2,336.2 | 2,166.2 | 7.8 | 2,849.7 | 3,019.7 |
| Comparable operating result, EUR million | 100.7 | 118.2 | -14.8 | 131.7 | 191.9 | -31.4 | 218.4 | 158.2 |
| Comparable operating result, % of revenue | 11.6 | 14.6 | -3.1 %-p | 5.6 | 8.9 | -3.2 %-p | 7.7 | 5.2 |
| Operating result, EUR million | 94.9 | 115.5 | -17.8 | 125.3 | 183.1 | -31.6 | 256.3 | 198.4 |
| Comparable EBITDA, % of revenue | 20.9 | 23.7 | -2.8 %-p | 15.7 | 18.9 | -3.1 %-p | 18.0 | 15.6 |
| Earnings per share (EPS), EUR | 0.43 | 0.52 | -18.6 | 0.32 | 0.46 | -30.8 | 0.70 | 0.56 |
| Unit revenue per available seat kilometre | ||||||||
| (RASK), cents/ASK | 6.89 | 7.00 | -1.5 | 6.56 | 6.79 | -3.3 | 6.72 | 6.55 |
| RASK at constant currency, cents/ASK | 6.83 | 7.00 | -2.5 | 6.53 | 6.79 | -3.7 | 6.72 | 6.54 |
| Unit revenue per revenue passenger kilometre (yield), cents/RPK |
6.57 | 6.75 | -2.6 | 6.39 | 6.49 | -1.6 | 6.52 | 6.43 |
| Unit cost per available seat kilometre (CASK), | ||||||||
| cents/ASK | 6.10 | 5.97 | 2.0 | 6.19 | 6.19 | 0.1 | 6.21 | 6.21 |
| CASK excluding fuel, cents/ASK | 4.59 | 4.56 | 0.6 | 4.74 | 4.82 | -1.6 | 4.84 | 4.78 |
| CASK excluding fuel at constant currency, | ||||||||
| cents/ASK | 4.52 | 4.56 | -0.8 | 4.72 | 4.82 | -2.1 | 4.84 | 4.74 |
| Capital structure | ||||||||
| Equity ratio, % | 22.8 | 26.3 | -3.5 %-p | 23.3 | ||||
| Gearing, % | 73.6 | 57.3 | 16.3 %-p | 76.9 | ||||
| Interest-bearing net debt, EUR million | 677.9 | 605.6 | 11.9 | 706.7 | ||||
| Interest-bearing net debt / Comparable EBITDA, LTM * |
1.4 | - | - | 1.4 | 1.4 | |||
| Gross capital expenditure, EUR million | 51.1 | 113.6 | -55.1 | 363.1 | 221.6 | 63.9 | 474.0 | 615.5 |
| Return on capital employed (ROCE), LTM, % * | 7.4 | - | - | 9.3 | 7.4 | |||
| Growth and traffic | ||||||||
| Passengers, 1,000 | 4,088 | 3,652 | 11.9 | 11,147 | 10,126 | 10.1 | 13,281 | 14,302 |
| Ancillary revenue, EUR million | 45.7 | 42.0 | 8.8 | 131.7 | 121.6 | 8.2 | 160.8 | 170.9 |
| Ancillary revenue per passenger (PAX) | 11.18 | 11.50 | -2.8 | 11.81 | 12.01 | -1.7 | 12.11 | 11.95 |
| Flights, number | 33,881 | 32,916 | 2.9 | 98,885 | 94,759 | 4.4 | 125,848 | 129,974 |
| Available seat kilometres (ASK), million | 12,624 | 11,528 | 9.5 | 35,601 | 31,912 | 11.6 | 42,386 | 46,074 |
| Revenue passenger kilometres (RPK), million | 10,877 | 9,743 | 11.6 | 29,383 | 26,605 | 10.4 | 34,660 | 37,438 |
| Passenger load factor (PLF), % | 86.2 | 84.5 | 1.7 %-p | 82.5 | 83.4 | -0.8 %-p | 81.8 | 81.3 |
| Fuel consumption, tonnes | 302,023 | 279,356 | 8.1 | 856,475 | 776,932 | 10.2 | 1,031,125 | 1,110,668 |
| 0.0754 | 0.0763 | -1.3 | 0.0758 | 0.0767 | -1.2 | 0.0766 | 0.0759 | |
| CO2 emissions, tonnes/ASK | 0.7529 | 0.7695 | -2.2 | 0.7843 | 0.7893 | -0.6 | 0.7917 | 0.7877 |
| CO2 emissions, tonnes/RTK Customer Experience |
||||||||
| Net Promoter Score ** | 38 | 49 | 37 | 47 | 47 | - | ||
| -23.0 | -21.0 | |||||||
| Arrival punctuality, % | 80.2 | 81.8 | -1.6 %-p | 78.0 | 79.9 | -1.9 %-p | 79.7 | 78.2 |
| People Experience | ||||||||
| Average number of employees | 6,902 | 6,499 | 6.2 | 6,771 | 6,340 | 6.8 | 6,360 | 6,684 |
| WeTogether@Finnair Personnel Experience overall grade *** |
- | - | - | - | 3.75 | - | 3.77 | 3.77 |
| Absences due to illness, % | 4.49 | 4.23 | 0.26 %-p | 4.63 | 4.35 | 0.28 %-p | 4.24 | 4,45 |
| LTIF (Lost-time injury frequency) | 11.1 | 16.4 | -32.4 | 10.8 | 12.1 | -11.2 | 11.7 | 10.7 |
| 3.8 | 3.0 | 3.8 | 3.0 | 3.3 | 3.8 | |||
| Attrition rate, LTM, % | 0.9 %-p | 0.9 %-p | ||||||
| Transformation | ||||||||
| Share of digital direct ticket sales, % **** | 24.5 | 21.8 | 2.7 %-p | 25.3 | 23.3 | 2.0 %-p | 23.9 | 25.2 |
| Share of digital direct ancillary sales, % **** Average number of monthly visitors at |
46.2 | 51.6 | -5.5 %-p | 50.9 | 54.7 | -3.8 %-p | 55.1 | 52.2 |
| finnair.com, millions * | 2.3 | 1.6 | 40.4 | 2.0 | 2.1 | -3.9 | 1.9 | 1.9 |
| Active users for Finnair mobile app, thousands | 355.0 | 273.2 | 29.9 | 321.7 | 259.8 | 23.8 | 265.5 | 312.4 |
* Finnair restated key figures that use rolling 12-months income statement figures from 31.12.2018 onwards. Earlier periods were not restated because income statement is restated only from 1.1.2018 onwards.
** New Customer satisfaction survey was launched in beginning of January 2019. Due to renewed research methodology LTM figure cannot currently be calculated, because data in 2018 is not fully comparable to 2019. In the new survey NPS is calculated based on responses from all customers starting from beginning of 2019, including Finnair Plus and non-members. In 2018 NPS was calculated based on responses from Finnair Plus members only and therefore these results are not comparable between each other.
*** Measured in Q2 2018 and Q4 2018.
**** In Finnair's own digital channels.
***** Measurement method changed due to EU GDPR in Q2 2018.
| Q1-Q3 | Q1-Q3 | |||||||
|---|---|---|---|---|---|---|---|---|
| in mill. EUR | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 | LTM |
| Revenue | 870.3 | 806.9 | 7.9 | 2,336.2 | 2,166.2 | 7.8 | 2,849.7 | 3,019.7 |
| Other operating income | 13.3 | 17.5 | -24.0 | 41.0 | 55.1 | -25.6 | 73.7 | 59.6 |
| Operating expenses | ||||||||
| Staff costs | -131.7 | -124.3 | 6.0 | -398.3 | -380.4 | 4.7 | -499.6 | -517.5 |
| Fuel costs | -190.1 | -162.7 | 16.8 | -515.9 | -435.6 | 18.4 | -581.0 | -661.3 |
| Capacity rents | -33.2 | -33.2 | -0.2 | -98.1 | -91.5 | 7.2 | -122.4 | -129.0 |
| Aircraft materials and overhaul | -50.7 | -45.2 | 12.2 | -147.7 | -120.0 | 23.2 | -162.9 | -190.7 |
| Traffic charges | -93.3 | -83.3 | 12.0 | -252.6 | -226.5 | 11.6 | -300.8 | -327.0 |
| Sales, marketing and distribution costs | -43.6 | -37.3 | 17.0 | -127.6 | -118.1 | 8.0 | -159.0 | -168.5 |
| Passenger and handling services | -127.7 | -117.5 | 8.8 | -371.9 | -343.1 | 8.4 | -453.9 | -482.7 |
| Property, IT and other expenses | -31.2 | -29.5 | 5.8 | -97.4 | -97.6 | -0.2 | -131.3 | -131.0 |
| Comparable EBITDA | 181.9 | 191.4 | -4.9 | 367.6 | 408.5 | -10.0 | 512.6 | 471.6 |
| Depreciation and impairment | -81.3 | -73.2 | 11.0 | -235.9 | -216.6 | 8.9 | -294.2 | -313.4 |
| Comparable operating result | 100.7 | 118.2 | -14.8 | 131.7 | 191.9 | -31.4 | 218.4 | 158.2 |
| Unrealized changes in foreign currencies of | ||||||||
| fleet overhaul provisions | -5.6 | -0.8 | <-200 % | -5.7 | -3.8 | -49.9 | -4.9 | -6.8 |
| Fair value changes of derivatives where hedge | ||||||||
| accounting is not applied | 0.5 | -1.2 | > 200 % | 0.5 | -3.9 | > 200 % | 0.2 | 4.6 |
| Sales gains and losses on | ||||||||
| aircraft and other transactions | 0.0 | -0.6 | > 200 % | 0.2 | -0.5 | > 200 % | 42.7 | 43.4 |
| Restructuring costs | -0.6 | -0.2 | -199.6 | -1.4 | -0.5 | -157.3 | -0.1 | -1.0 |
| Operating result | 94.9 | 115.5 | -17.8 | 125.3 | 183.1 | -31.6 | 256.3 | 198.4 |
| Financial income | 0.5 | -0.2 | > 200 % | 2.8 | -1.2 | > 200 % | -2.2 | 1.8 |
| Financial expenses | -23.4 | -27.6 | 15.0 | -65.4 | -96.7 | 32.4 | -126.8 | -95.5 |
| Result before taxes | 72.0 | 87.7 | -17.9 | 62.6 | 85.2 | -26.5 | 127.2 | 104.6 |
| Income taxes | -14.4 | -17.5 | 17.8 | -12.5 | -17.0 | 26.2 | -25.6 | -21.1 |
| Result for the period | 57.6 | 70.2 | -17.9 | 50.1 | 68.2 | -26.6 | 101.6 | 83.5 |
| Attributable to | ||||||||
| Owners of the parent company | 57.6 | 70.2 | -17.9 | 50.1 | 68.2 | -26.6 | 101.6 | 83.5 |
| Earnings per share attributable to | ||||||||
| shareholders of the parent company, EUR | ||||||||
| (basic and diluted) | 0.43 | 0.52 | -18.6 | 0.32 | 0.46 | -30.7 | 0.70 | 0.56 |
| Q1-Q3 | Q1-Q3 | |||||||
|---|---|---|---|---|---|---|---|---|
| in mill. EUR | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 | LTM |
| Result for the period | 57.6 | 70.2 | -17.9 | 50.1 | 68.2 | -26.6 | 101.6 | 83.5 |
| Other comprehensive income items Items that may be reclassified to profit or loss in subsequent periods |
||||||||
| Change in fair value of hedging instruments | 7.7 | 13.6 | -43.1 | 58.9 | 81.4 | -27.6 | -113.5 | -136.0 |
| Tax effect | -1.5 | -2.7 | 43.1 | -11.8 | -16.3 | 27.6 | 22.7 | 27.2 |
| Items that will not be reclassified to | ||||||||
| profit or loss in subsequent periods | ||||||||
| Actuarial gains and losses | ||||||||
| from defined benefit plans | -49.3 | 14.1 | <-200 % | -74.3 | 3.6 | <-200 % | 0.7 | -77.2 |
| Tax effect | 9.9 | -2.8 | > 200 % | 14.9 | -0.7 | > 200 % | -0.1 | 15.4 |
| Other comprehensive income items total | -33.2 | 22.1 | <-200 % | -12.4 | 67.9 | <-200 % | -90.2 | -170.5 |
| Comprehensive income for the period | 24.4 | 92.3 | -73.6 | 37.7 | 136.1 | -72.3 | 11.4 | -87.0 |
| Attributable to | ||||||||
| Owners of the parent company | 24.4 | 92.3 | -73.6 | 37.7 | 136.1 | -72.3 | 11.4 | -87.0 |
| in mill. EUR | 30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 | 31 Dec 2017 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Fleet O |
1,494.7 | 1,280.4 | 1,320.2 | 1,218.2 |
| Right-of-use fleet O |
767.8 | 832.0 | 834.3 | 881.8 |
| Fleet total O |
2,262.5 | 2,112.4 | 2,154.5 | 2,100.1 |
| Other fixed assets O |
182.9 | 171.4 | 173.2 | 171.5 |
| Right-of-use other fixed assets O |
131.1 | 169.2 | 164.3 | 186.4 |
| Other fixed assets total O |
314.1 | 340.6 | 337.5 | 357.9 |
| Other non-current assets O |
44.6 | 6.8 | 53.3 | 8.1 |
| Non-current assets total | 2,621.2 | 2,459.8 | 2,545.3 | 2,466.0 |
| Current assets | ||||
| Receivables related to revenue O |
199.5 | 195.5 | 152.4 | 268.6 |
| Inventories and prepaid expenses O |
91.8 | 69.9 | 120.7 | 61.9 |
| Derivative financial instruments O/I* |
103.8 | 155.0 | 52.1 | 104.5 |
| Other financial assets I |
826.8 | 921.2 | 892.2 | 833.0 |
| Cash and cash equivalents I |
194.1 | 197.5 | 180.9 | 150.2 |
| Current assets total | 1,416.0 | 1,539.2 | 1,398.3 | 1,418.2 |
| Assets held for sale O |
15.4 | 0.1 | 16.7 | |
| Assets total | 4,037.2 | 4,014.4 | 3,943.6 | 3,900.9 |
| EQUITY AND LIABILITIES | ||||
| Equity attributable to owners of the parent | ||||
| Share capital O |
75.4 | 75.4 | 75.4 | 75.4 |
| Other equity O |
845.6 | 980.8 | 843.0 | 884.5 |
| Equity total | 921.0 | 1,056.3 | 918.5 | 960.0 |
| Non-current liabilities | ||||
| Lease liabilities I |
965.5 | 987.9 | 1,034.3 | 1,048.5 |
| Other interest-bearing liabilities I |
498.3 | 576.4 | 514.2 | 539.9 |
| Pension obligations O |
101.0 | 12.1 | 17.0 | 6.4 |
| Provisions and other liabilities O |
150.0 | 100.6 | 107.1 | 94.7 |
| Deferred tax liabilities O |
33.2 | 92.3 | 47.6 | 60.1 |
| Non-current liabilities total | 1,748.1 | 1,769.3 | 1,720.2 | 1,749.6 |
| Current liabilities | ||||
| Lease liabilities I |
139.8 | 105.3 | 125.1 | 68.7 |
| Other interest-bearing liabilities I |
103.2 | 45.8 | 100.5 | 125.6 |
| Provisions O |
19.2 | 27.7 | 30.9 | 25.8 |
| Trade payables O |
84.3 | 108.4 | 72.6 | 90.7 |
| Derivative financial instruments O/I* |
69.1 | 25.3 | 107.1 | 81.3 |
| Deferred income and advances received O |
611.9 | 565.4 | 548.9 | 475.3 |
| Liabilities related to employee benefits O |
107.6 | 116.1 | 105.6 | 139.2 |
| Other liabilities O |
233.1 | 184.2 | 214.2 | 173.4 |
| Current liabilities total | 1,368.1 | 1,178.3 | 1,304.9 | 1,180.1 |
| Liabilities related to assets held for sale O |
10.5 | 11.2 | ||
| Liabilities total | 3,116.1 | 2,958.1 | 3,025.1 | 2,940.9 |
| Equity and liabilities total | 4,037.2 | 4,014.4 | 3,943.6 | 3,900.9 |
| Finnair reports its interest-bearing debt, net debt and gearing to give an overview of Finnair's financial position. Balance sheet items included in | ||||
| interest-bearing net debt are marked with an "I". Other items are marked with an "O". | ||||
| Additional information to Balance Sheet: Interest-bearing net debt and gearing |
30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 | 31 Dec 2017 |
| Lease liabilities | 1,105.3 | 1,093.2 | 1,159.3 | 1,117.2 |
| Other interest-bearing liabilities | 601.5 | 622.2 | 614.7 | 665.5 |
| Cross currency interest rate swaps * | -8.1 | 8.9 | 5.8 | 18.5 |
|---|---|---|---|---|
| Adjusted interest-bearing liabilities | 1,698.7 | 1,724.3 | 1,779.8 | 1,801.2 |
| Other financial assets | -826.8 | -921.2 | -892.2 | -833.0 |
| Cash and cash equivalents | -194.1 | -197.5 | -180.9 | -150.2 |
| Interest-bearing net debt | 677.9 | 605.6 | 706.7 | 818.1 |
| Equity total | 921.0 | 1,056.3 | 918.5 | 960.0 |
| Gearing, % | 73.6 % | 57.3 % | 76.9 % | 85.2 % |
* Cross-currency interest rate swaps are used for hedging the currency and interest rate risk of interest-bearing loans, but hedge accounting is not applied. Changes in fair net value correlate with changes in the fair value of interest-bearing liabilities. Therefore, the fair net value of crosscurrency interest rate swaps recognised in derivative assets/liabilities and reported in Note 8, is considered an interest-bearing liability in the net debt calculation.
| in mill. EUR | Share capital |
Other restricted funds |
Hedging reserve and other OCI items |
Unrestricted equity funds |
Retained earnings |
Hybrid bond | Equity total |
|---|---|---|---|---|---|---|---|
| Equity 31 Dec 2018 | 75.4 | 168.1 | -27.2 | 255.2 | 247.2 | 198.2 | 916.9 |
| Change in accounting principles | 1.6 | 1.6 | |||||
| Equity 1 Jan 2019 | 75.4 | 168.1 | -27.2 | 255.2 | 248.7 | 198.2 | 918.5 |
| Result for the period | 50.1 | 50.1 | |||||
| Change in fair value of hedging instruments | 47.1 | 47.1 | |||||
| Actuarial gains and losses from defined benefit plans |
-59.4 | -59.4 | |||||
| Comprehensive income for the period | 0.0 | 0.0 | -12.4 | 0.0 | 50.1 | 0.0 | 37.7 |
| Dividend | -35.0 | -35.0 | |||||
| Purchase of own shares | -0.5 | -0.5 | |||||
| Share-based payments | 0.3 | 0.3 | |||||
| Equity 30 Sep 2019 | 75.4 | 168.1 | -39.6 | 255.5 | 263.3 | 198.2 | 921.0 |
Retained earnings was adjusted with 1.6 million euros due to implementation of subleases according to IFRS 16 Leases. More detailed information in note 20. Changes in accounting principles and restated financials 2018.
| in mill. EUR | Share capital |
Other restricted funds |
Hedging reserve and other OCI items |
Unrestricted equity funds |
Retained earnings |
Hybrid bond | Equity total |
|---|---|---|---|---|---|---|---|
| Equity 31 Dec 2017 | 75.4 | 168.1 | 63.0 | 250.3 | 205.0 | 198.2 | 960.0 |
| Change in accounting principles | 3.8 | -4.7 | -1.0 | ||||
| Equity 1 Jan 2018 | 75.4 | 168.1 | 63.0 | 254.0 | 200.2 | 198.2 | 959.0 |
| Result for the period | 68.2 | 68.2 | |||||
| Change in fair value of hedging instruments Actuarial gains and losses |
65.1 | 65.1 | |||||
| from defined benefit plans | 2.9 | 2.9 | |||||
| Comprehensive income for the period | 0.0 | 0.0 | 67.9 | 0.0 | 68.2 | 0.0 | 136.1 |
| Dividend | -38.4 | -38.4 | |||||
| Share-based payments | -0.5 | -0.5 | |||||
| Equity 30 Sep 2018 | 75.4 | 168.1 | 130.9 | 253.5 | 230.1 | 198.2 | 1,056.3 |
| Q1-Q3 | Q1-Q3 | |||||
|---|---|---|---|---|---|---|
| in mill. EUR | Q3 2019 | Q3 2018 | 2019 | 2018 | 2018 | LTM |
| Cash flow from operating activities | ||||||
| Result before taxes | 72.0 | 87.7 | 62.6 | 85.2 | 127.2 | 104.6 |
| Depreciation and impairment | 81.3 | 73.2 | 235.9 | 216.6 | 294.2 | 313.4 |
| Items affecting comparability | 5.8 | 2.7 | 6.4 | 8.7 | -37.9 | -40.2 |
| Financial income and expenses | 22.9 | 27.7 | 62.7 | 98.0 | 129.0 | 93.7 |
| Comparable EBITDA | 181.9 | 191.4 | 367.6 | 408.5 | 512.6 | 471.6 |
| Non-cash transactions * | 15.2 | 8.8 | 30.7 | 25.0 | 20.5 | 26.2 |
| Changes in working capital | -97.8 | -82.7 | 69.9 | 66.5 | 50.4 | 53.9 |
| Financial expenses paid, net | 19.8 | -23.2 | -12.9 | -64.7 | -79.9 | -28.1 |
| Income taxes paid | 0.2 | -11.0 | -11.0 | |||
| Net cash flow from operating activities | 119.3 | 94.3 | 444.4 | 435.3 | 503.6 | 512.6 |
| Cash flow from investing activities | ||||||
| Investments in fleet | -57.8 | -38.3 | -326.4 | -153.3 | -309.7 | -482.7 |
| Investments in other fixed assets | -8.1 | -5.0 | -20.4 | -19.0 | -26.0 | -27.4 |
| Divestments of fixed assets | 0.6 | 56.4 | 0.7 | 100.0 | 213.8 | 114.5 |
| Lease and lease interest payments received | 4.0 | 12.3 | 12.3 | |||
| Net change in financial assets maturing after more than three months | -49.2 | -73.4 | 6.3 | -79.6 | -81.8 | 4.0 |
| Change in other non-current assets | 0.2 | 0.4 | 0.0 | 0.8 | 1.2 | 0.4 |
| Net cash flow from investing activities | -110.3 | -60.0 | -327.5 | -151.1 | -202.6 | -379.0 |
| Cash flow from financing activities | ||||||
| Loan repayments and changes | -9.4 | -78.3 | -30.1 | -99.4 | -112.5 | -43.1 |
| Repayments of lease liabilities | -33.4 | -29.5 | -98.2 | -88.2 | -118.9 | -128.8 |
| Hybrid bond interests and expenses | -15.8 | -15.8 | ||||
| Purchase of own shares | -0.5 | -3.7 | -4.3 | |||
| Dividends paid | -35.0 | -38.4 | -38.4 | -35.0 | ||
| Net cash flow from financing activities | -42.8 | -107.8 | -163.7 | -226.0 | -289.2 | -226.9 |
| Change in cash flows | -33.7 | -73.5 | -46.8 | 58.2 | 11.8 | -93.2 |
| Liquid funds, at beginning | 642.7 | 775.7 | 655.8 | 643.9 | 643.9 | 702.2 |
| Change in cash flows | -33.7 | -73.5 | -46.8 | 58.2 | 11.8 | -93.2 |
| Liquid funds, at end ** | 609.0 | 702.2 | 609.0 | 702.2 | 655.8 | 609.0 |
| Notes to consolidated cash flow statement | ||||||
| * Non-cash transactions | ||||||
| Employee benefits | 3.1 | 3.7 | 9.8 | 10.9 | 3.0 | 1.9 |
| Change in provisions | 11.6 | 5.3 | 19.9 | 16.0 | 20.6 | 24.5 |
| Other adjustments | 0.5 | -0.2 | 1.1 | -1.9 | -3.1 | -0.2 |
| Total | 15.2 | 8.8 | 30.7 | 25.0 | 20.5 | 26.2 |
| ** Liquid funds | ||||||
| Other financial assets | 826.8 | 921.2 | 826.8 | 921.2 | 892.2 | 826.8 |
| Cash and cash equivalents | 194.1 | 197.5 | 194.1 | 197.5 | 180.9 | 194.1 |
| Cash funds | 1,020.9 | 1,118.7 | 1,020.9 | 1,118.7 | 1,073.1 | 1,020.9 |
| Maturing after more than three months | -411.9 | -416.5 | -411.9 | -416.5 | -417.3 | -411.9 |
| Liquid funds | 609.0 | 702.2 | 609.0 | 702.2 | 655.8 | 609.0 |
This Consolidated Interim Report has been prepared according to the International (IAS) Standard 34: Interim Financial Reporting. Consolidated income statement includes, in addition to operating result, comparable operating result and EBITDA which are presented to better reflect the Group's business performance when comparing results to previous periods. Comparable operating result does not include capital gains and losses, changes in the value of foreign currency denominated fleet maintenance reserves, changes in the unrealised fair value of derivatives or restructuring costs. The basis for this is explained in more detail in the note 7. Items affecting comparability. Comparable EBITDA is a common measure in airline business which aims to reflect comparable operating result excluding capital cost. Therefore, comparable EBITDA is calculated by excluding depreciations from comparable operating result.
Finnair uses alternative performance measures referred to in the European Securities Markets Authority (ESMA) Guidelines on Alternative Performance Measures to describe its operational and financial performance, to provide a comparable view of its business and to enable better comparability relative to its industry peers. The alternative performance measures do not replace IFRS indicators. Finnair's alternative performance measures reported in financial statements are comparable operating result and EBITDA. Comparable operating result is reconciled in the note 7. Items affecting comparability. Finnair applies consistent principles when excluding items from comparable operating results. The principles are described in more detail in the note 7. Items affecting comparability.
Calculation principles of key ratios are defined in the note 21. Calculation of key ratios. Changes in accounting principles did not have an effect on calculating alternative performance measures. However, due to IFRS 16 implementation, adjusted net debt and adjusted gearing are no longer presented. Further information regarding IFRS 16 impact to key figures is presented in note 20. Changes in accounting principles and restated financials 2018.
Finnair Group adopted the new IFRS 16 standard: Leases on 1 January 2019. The accounting principles applied correspond to the accounting principles disclosed in the 2018 Consolidated Financial Statements. Finnair has also changed its accounting principle relating to aircraft frame components, including cabin components and frame overhauls and made structural changes in its financial reporting chart of accounts, including income statement, balance sheet and cash flow reporting line item changes. Finnair has applied the changes in accounting principles retrospectively in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and each comparative period has been restated accordingly. The changes to the accounting principles and restatement effects to 2018 financials are described in the note 20 Changes in accounting principles and restated financials 2018.
The figures presented in this statement are not rounded; therefore, the total sum of individual figures does not necessarily match the corresponding sum stated herein. The key figures stated here are calculated using the exact figures.
The preparation of the Interim Report requires the company's management to make estimates and assumptions that influence the levels of reported assets and liabilities as well as of revenue and expenses. The actual outcome may differ from the estimates made. The critical accounting estimates and sources of uncertainty are disclosed in the financial statements 2018.
Finnair Executive Board, defined as the chief operative decision maker according to IFRS 8 Segment reporting, considers the business as one operating segment. Therefore, segment information is not reported.
| North | Un | ||||||
|---|---|---|---|---|---|---|---|
| Q3 2019, in mill. EUR | Asia | Atlantic | Europe | Domestic | allocated | Total | Share % |
| Passenger revenue | 324.8 | 58.5 | 284.6 | 32.8 | 14.1 | 714.7 | 82.1 |
| Ancillary and retail revenue | 14.0 | 3.3 | 12.2 | 1.4 | 14.7 | 45.7 | 5.2 |
| Cargo | 39.0 | 3.6 | 8.4 | 0.4 | 1.4 | 52.8 | 6.1 |
| Travel services | 0.2 | 0.3 | 56.3 | 0.2 | 0.0 | 57.0 | 6.6 |
| Total | 378.0 | 65.6 | 361.5 | 34.9 | 30.3 | 870.3 | |
| Share % | 43.4 | 7.5 | 41.5 | 4.0 | 3.5 |
| North | Un | ||||||
|---|---|---|---|---|---|---|---|
| Q3 2018, in mill. EUR | Asia | Atlantic | Europe | Domestic | allocated | Total | Share % |
| Passenger revenue | 310.8 | 46.4 | 258.5 | 32.7 | 9.0 | 657.4 | 81.5 |
| Ancillary and retail revenue | 11.5 | 2.2 | 12.1 | 0.8 | 15.5 | 42.0 | 5.2 |
| Cargo | 40.5 | 3.7 | 8.8 | 0.1 | 1.9 | 55.0 | 6.8 |
| Travel services | 0.0 | 0.0 | 50.6 | 0.3 | 1.6 | 52.5 | 6.5 |
| Total | 362.8 | 52.3 | 330.0 | 33.9 | 27.9 | 806.9 | |
| Share % | 45.0 | 6.5 | 40.9 | 4.2 | 3.5 |
| North | Un | ||||||
|---|---|---|---|---|---|---|---|
| Q1-Q3 2019, in mill. EUR | Asia | Atlantic | Europe | Domestic | allocated | Total | Share % |
| Passenger revenue | 828.2 | 136.8 | 748.8 | 128.5 | 35.0 | 1,877.4 | 80.4 |
| Ancillary and retail revenue | 40.9 | 8.4 | 33.1 | 4.0 | 45.2 | 131.7 | 5.6 |
| Cargo | 113.8 | 9.8 | 24.0 | 1.0 | 6.2 | 154.9 | 6.6 |
| Travel services | 24.6 | 10.4 | 134.6 | 0.7 | 1.9 | 172.3 | 7.4 |
| Total | 1,007.5 | 165.6 | 940.5 | 134.3 | 88.4 | 2,336.2 | |
| Share % | 43.1 | 7.1 | 40.3 | 5.7 | 3.8 |
| North | Un | ||||||
|---|---|---|---|---|---|---|---|
| Q1-Q3 2018, in mill. EUR | Asia | Atlantic | Europe | Domestic | allocated | Total | Share % |
| Passenger revenue | 771.2 | 107.0 | 685.7 | 129.4 | 34.6 | 1,728.0 | 79.8 |
| Ancillary and retail revenue | 33.9 | 5.7 | 30.5 | 2.4 | 49.2 | 121.6 | 5.6 |
| Cargo | 108.0 | 8.5 | 22.4 | 0.5 | 7.8 | 147.2 | 6.8 |
| Travel services | 28.0 | 10.2 | 125.4 | 0.9 | 4.9 | 169.4 | 7.8 |
| Total | 941.0 | 131.4 | 864.0 | 133.2 | 96.6 | 2,166.2 | |
| Share % | 43.4 | 6.1 | 39.9 | 6.1 | 4.5 |
| North | Un | ||||||
|---|---|---|---|---|---|---|---|
| 2018, in mill. EUR | Asia | Atlantic | Europe | Domestic | allocated | Total | Share % |
| Passenger revenue | 999.3 | 137.5 | 898.1 | 178.0 | 46.0 | 2,259.0 | 79.3 |
| Ancillary and retail revenue | 45.3 | 7.5 | 40.7 | 4.4 | 62.9 | 160.8 | 5.6 |
| Cargo | 155.7 | 12.0 | 32.4 | 0.6 | 6.5 | 207.2 | 7.3 |
| Travel services | 35.9 | 13.3 | 165.2 | 1.3 | 7.0 | 222.6 | 7.8 |
| Total | 1,236.2 | 170.3 | 1,136.4 | 184.4 | 122.4 | 2,849.7 | |
| Share % | 43.4 | 6.0 | 39.9 | 6.5 | 4.3 |
| Q1-Q3 | Q1-Q3 | ||||||
|---|---|---|---|---|---|---|---|
| PLF, % | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 |
| Asia | 87.2 | 89.5 | -2.3 %-p | 84.0 | 87.6 | -3.6 %-p | 85.5 |
| North Atlantic | 90.8 | 87.1 | 3.7 %-p | 87.1 | 85.4 | 1.7 %-p | 83.8 |
| Europe | 85.0 | 79.7 | 5.3 %-p | 81.4 | 79.5 | 1.9 %-p | 78.6 |
| Domestic | 68.9 | 64.2 | 4.7 %-p | 65.0 | 65.0 | 0.0 %-p | 64.7 |
| Total | 86.2 | 84.5 | 1.7 %-p | 82.5 | 83.4 | -0.8 %-p | 81.8 |
| Q1-Q3 | Q1-Q3 | ||||||
|---|---|---|---|---|---|---|---|
| ASK, mill. km | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 |
| Asia | 6,113.6 | 5,501.6 | 11.1 | 17,561.2 | 15,895.7 | 10.5 | 21,052.1 |
| North Atlantic | 1,153.8 | 899.8 | 28.2 | 3,056.3 | 2,373.5 | 28.8 | 3,135.6 |
| Europe | 5,021.2 | 4,788.5 | 4.9 | 13,580.3 | 12,261.4 | 10.8 | 16,297.8 |
| Domestic | 335.0 | 338.1 | -0.9 | 1,402.8 | 1,381.8 | 1.5 | 1,900.2 |
| Total | 12,623.6 | 11,528.0 | 9.5 | 35,600.7 | 31,912.4 | 11.6 | 42,385.8 |
| Q1-Q3 | Q1-Q3 | ||||||
|---|---|---|---|---|---|---|---|
| RPK, mill. km | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 |
| Asia | 5,330.5 | 4,926.0 | 8.2 | 14,752.9 | 13,932.5 | 5.9 | 17,999.6 |
| North Atlantic | 1,047.3 | 783.5 | 33.7 | 2,662.1 | 2,027.1 | 31.3 | 2,626.3 |
| Europe | 4,268.5 | 3,816.2 | 11.9 | 11,056.7 | 9,747.4 | 13.4 | 12,804.9 |
| Domestic | 230.7 | 217.0 | 6.3 | 911.3 | 898.1 | 1.5 | 1,229.5 |
| Total | 10,877.0 | 9,742.7 | 11.6 | 29,383.0 | 26,605.0 | 10.4 | 34,660.4 |
| Key figures quarterly, | |||||||
|---|---|---|---|---|---|---|---|
| beginning from 2018 | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 | Q1 2018 |
| Revenue | 870.3 | 793.0 | 672.9 | 683.5 | 806.9 | 718.2 | 641.1 |
| Passenger revenue | 714.7 | 645.5 | 517.2 | 531.1 | 657.4 | 580.3 | 490.2 |
| Ancillary and retail revenue | 45.7 | 45.3 | 40.7 | 39.2 | 42.0 | 40.5 | 39.1 |
| Cargo | 52.8 | 54.7 | 47.4 | 60.0 | 55.0 | 51.7 | 40.5 |
| Travel services | 57.0 | 47.6 | 67.7 | 53.3 | 52.5 | 45.7 | 71.2 |
| Comparable operating result | 100.7 | 47.2 | -16.2 | 26.5 | 118.2 | 59.1 | 14.6 |
| Operating result | 94.9 | 47.9 | -17.6 | 73.1 | 115.5 | 50.8 | 16.9 |
| ASK, mill. km | 12,623.6 | 12,307.3 | 10,669.8 | 10,473.3 | 11,528.0 | 10,718.7 | 9,665.7 |
| RPK, mill. km | 10,877.0 | 10,150.2 | 8,355.8 | 8,055.4 | 9,742.7 | 8,846.5 | 8,015.8 |
| PLF, % | 86.2 | 82.5 | 78.3 | 76.9 | 84.5 | 82.5 | 82.9 |
Earlier periods are not reported, because income statement is restated only from 1.1.2018 onwards.
| Q1-Q3 | Q1-Q3 | ||||||
|---|---|---|---|---|---|---|---|
| in mill. EUR | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 |
| Wages and salaries | -89.2 | -84.8 | 5.2 | -279.3 | -263.1 | 6.2 | -339.2 |
| Defined contribution schemes | -15.8 | -15.6 | 1.4 | -48.0 | -49.3 | -2.6 | -63.2 |
| Defined benefit schemes | -3.1 | -3.1 | 3.0 | -9.4 | -9.2 | 3.0 | -13.2 |
| Pension expenses total | -18.9 | -18.6 | 1.6 | -57.4 | -58.4 | -1.7 | -76.4 |
| Other social expenses | -6.3 | -5.7 | 11.5 | -7.9 | -9.6 | -17.2 | -17.8 |
| Salaries, pension and social costs | -114.4 | -109.1 | 4.9 | -344.7 | -331.1 | 4.1 | -433.4 |
| Operative staff related costs | -10.7 | -8.5 | 24.8 | -32.2 | -25.1 | 28.2 | -34.6 |
| Leased and outsourced crew | -4.1 | -4.4 | -7.0 | -12.1 | -13.3 | -9.1 | -17.3 |
| Other personnel related costs | -2.5 | -2.2 | 13.0 | -9.2 | -10.7 | -14.0 | -14.3 |
| Total | -131.7 | -124.3 | 6.0 | -398.3 | -380.4 | 4.7 | -499.6 |
| Q1-Q3 | Q1-Q3 | ||||||
|---|---|---|---|---|---|---|---|
| in mill. EUR | Q3 2019 | Q3 2018 | Change % | 2019 | 2018 | Change % | 2018 |
| Depreciation of owned fleet | -43.9 | -33.7 | 30.4 | -123.3 | -98.7 | 24.9 | -136.5 |
| Depreciation of other fixed assets | -5.2 | -5.0 | 3.4 | -15.7 | -13.9 | 12.9 | -19.3 |
| Depreciation of right-of-use fleet | -26.5 | -28.5 | -7.2 | -79.3 | -85.0 | -6.6 | -112.9 |
| Depreciation of right-of-use other assets | -5.7 | -6.0 | -4.6 | -17.6 | -19.1 | -7.6 | -25.4 |
| Total | -81.3 | -73.2 | 11.0 | -235.9 | -216.6 | 8.9 | -294.2 |
Comparable operating result aims to provide a comparable view on business development between periods. Therefore, items effecting comparability are excluded from the comparable operating result. The principles related to income statement presentation and principles related to usage of alternative preformance measures are described under Basics of preparation. Calculation principles of alternative performance measures are also defined in Note 21. Calculation of key ratios. The detailed content of items affecting comparability and the reasoning behind exluding those from comparable operating results is described below.
Unrealised exchange rate differences of mainly in US dollars denominated aircraft maintenance provisions are not included in the comparable operating result. These changes are not included in the comparable operating result until the maintenance event or redelivery occurs during a long period of time in the future and the exchange rate differences realise over a long period of time. Finnair provides for the redelivery condition related to leased aircraft according to the principles described in the note 1.3.5. Provisions in the 2018 Consolidated Financial Statements.
Further, unrealised fair value changes of derivatives where hedge accounting is not applied, are not included in the comparable operating result, as the business transactions which they are hedging are recognised to the comparable operating result only when they occur. The treatment of realised gains and losses on these derivatives is described in the note 3.8 Derivatives in the 2018 Consolidated Financial Statements.
In addition to above, gains and losses on aircraft and other transactions and restructuring costs are not included in the comparable operating result. Gains and losses on transactions include sales gains and losses as well as other items that can be considered to be directly related the sale of the asset. For example, a write-down that might occur when an asset is classified as "Assets held for sale" in accordance with IFRS 5, is included in gains and losses on the transactions. Restructuring costs include termination benefits and other costs that directly related to the restructuring of operations.
| Q3 2019 Items |
Compa | Q3 2018 Items |
Compa | ||||
|---|---|---|---|---|---|---|---|
| affecting | rable | affecting | rable | ||||
| in mill. EUR | Operating result |
compa rability |
operating result |
Operating result |
compa rability |
operating result |
Change % |
| Revenue | 870.3 | 870.3 | 806.9 | 806.9 | 7.9 | ||
| Sales gains on aircraft and other transactions | 0.0 | 0.0 | 0.0 | 0.0 | 46.5 | ||
| Other operating income | 13.3 | 13.3 | 17.5 | 17.5 | -24.0 | ||
| Operating expenses | |||||||
| Staff costs | -132.3 | 0.6 | -131.7 | -124.4 | 0.2 | -124.3 | 6.3 |
| Fuel costs | -189.6 | -0.5 | -190.1 | -163.9 | 1.2 | -162.7 | 15.7 |
| Capacity rents | -33.2 | -33.2 | -33.2 | -33.2 | -0.2 | ||
| Aircraft materials and overhaul | -56.4 | 5.6 | -50.7 | -46.0 | 0.8 | -45.2 | 22.6 |
| Traffic charges | -93.3 | -93.3 | -83.3 | -83.3 | 12.0 | ||
| Sales, marketing and distribution costs | -43.6 | -43.6 | -37.3 | -37.3 | 17.0 | ||
| Passenger and handling services | -127.7 | -127.7 | -117.5 | -117.5 | 8.8 | ||
| Sales losses on aircraft and other transactions | -0.6 | 0.6 | -100.0 | ||||
| Property, IT and other expenses | -31.3 | 0.0 | -31.2 | -29.5 | -29.5 | 5.9 | |
| EBITDA | 176.2 | 5.7 | 181.9 | 188.7 | 2.7 | 191.4 | -6.6 |
| Depreciation and impairment | -81.3 | -81.3 | -73.2 | -73.2 | 11.0 | ||
| Operating result | 94.9 | 5.7 | 100.7 | 115.5 | 2.7 | 118.2 | -17.8 |
| Q1-Q3 2019 | Q1-Q3 2018 | ||||||
|---|---|---|---|---|---|---|---|
| Items affecting |
Compa rable |
Items affecting |
Compa rable |
||||
| in mill. EUR | Operating result |
compa rability |
operating result |
Operating result |
compa rability |
operating result |
Change % |
| Revenue | 2,336.2 | 2,336.2 | 2,166.2 | 2,166.2 | 7.8 | ||
| Sales gains on aircraft and other transactions | 0.1 | -0.1 | 0.6 | -0.6 | -87.1 | ||
| Other operating income | 41.0 | 41.0 | 55.1 | 55.1 | -25.6 | ||
| Operating expenses | |||||||
| Staff costs | -399.7 | 1.4 | -398.3 | -381.7 | 1.3 | -380.4 | 4.7 |
| Fuel costs | -515.4 | -0.5 | -515.9 | -438.7 | 3.1 | -435.6 | 17.5 |
| Capacity rents | -98.1 | -98.1 | -91.5 | -91.5 | 7.2 | ||
| Aircraft materials and overhaul | -153.4 | 5.7 | -147.7 | -123.8 | 3.8 | -120.0 | 24.0 |
| Traffic charges | -252.6 | -252.6 | -226.5 | -226.5 | 11.6 | ||
| Sales, marketing and distribution costs | -127.6 | -127.6 | -118.1 | -118.1 | 8.0 | ||
| Passenger and handling services | -371.9 | -371.9 | -343.1 | -343.1 | 8.4 | ||
| Sales losses on aircraft and other transactions | 0.1 | -0.1 | -1.1 | 1.1 | > 200 % | ||
| Property, IT and other expenses | -97.4 | 0.0 | -97.4 | -97.7 | 0.0 | -97.6 | -0.2 |
| EBITDA | 361.2 | 6.4 | 367.6 | 399.8 | 8.7 | 408.5 | -9.7 |
| Depreciation and impairment | -235.9 | -235.9 | -216.6 | -216.6 | 8.9 | ||
| Operating result | 125.3 | 6.4 | 131.7 | 183.1 | 8.7 | 191.9 | -31.6 |
No significant changes have been made to the Group's risk management principles in the reporting period. The objectives and principles of risk management are consistent with the information presented in the Group's 2018 financial statements. The tables below present the nominal value or the amount and net fair value of derivative contracts used in Group's hedge accounting.
| Derivatives, in mill. EUR | 30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 | |||
|---|---|---|---|---|---|---|
| Nominal | Fair net | Nominal | Fair net | Nominal | Fair net | |
| value | value | value | value | value | value | |
| Currency derivatives | ||||||
| Operational cash flow hedging (forward contracts) | 931.3 | 30.7 | 541.2 | 13.5 | 700.1 | 10.1 |
| Operational cash flow hedging (options) | ||||||
| Bought options | 187.5 | 7.9 | 259.5 | 5.6 | 242.6 | 5.6 |
| Sold options | 188.0 | -1.6 | 257.3 | -1.9 | 242.0 | -2.8 |
| Fair value hedging of aircraft acquisitions | 358.2 | 31.1 | 485.2 | 5.9 | 445.4 | 17.5 |
| Currency hedging of lease payments | 50.5 | 5.3 | 114.0 | 2.4 | 107.4 | 5.2 |
| Hedge accounting items total | 1,715.6 | 73.5 | 1,657.2 | 25.5 | 1,737.6 | 35.5 |
| Balance sheet hedging (forward contracts) | 841.7 | 6.3 | 144.0 | 1.0 | 131.8 | 1.7 |
| Items outside hedge accounting total | 841.7 | 6.3 | 144.0 | 1.0 | 131.8 | 1.7 |
| Currency derivatives total | 2,557.3 | 79.7 | 1,801.2 | 26.6 | 1,869.4 | 37.2 |
| Commodity derivatives | ||||||
| Jet fuel forward contracts, tonnes | 896,000 | -52.3 | 821,500 | 95.8 | 924,500 | -74.3 |
| Options | ||||||
| Bought options, jet fuel, tonnes | 75,000 | 0.6 | 180,500 | 12.6 | 169,500 | 0.7 |
| Sold options, jet fuel, tonnes | 75,000 | -1.2 | 180,500 | -0.6 | 169,500 | -11.6 |
| Hedge accounting items total | -53.0 | 107.7 | -85.2 | |||
| Options | ||||||
| Sold options, jet fuel, tonnes | 75,000 | -0.1 | 137,500 | -3.5 | 146,500 | -1.1 |
| Items outside hedge accounting total | -0.1 | -3.5 | -1.1 | |||
| Commodity derivatives total | -53.1 | 104.2 | -86.4 | |||
| Currency and interest rate swaps and options | ||||||
| Cross currency interest rate swaps | 229.8 | 8.1 | 234.7 | -8.9 | 232.7 | -5.8 |
| Items outside hedge accounting total | 229.8 | 8.1 | 234.7 | -8.9 | 232.7 | -5.8 |
| Interest rate derivatives total | 229.8 | 8.1 | 234.7 | -8.9 | 232.7 | -5.8 |
| Equity derivatives | ||||||
| Stock options | ||||||
| Bought options | 3.0 | 8.6 | ||||
| Sold options | 3.0 | -0.7 | ||||
| Hedge accounting items total | 6.0 | 7.9 | ||||
| Equity derivatives total | 6.0 | 7.9 | ||||
| Derivatives total | 34.7 | 129.8 | -54.9 |
| Fair value hierarchy of financial assets and liabilities valued at fair value | |||
|---|---|---|---|
| Fair values at the end of the reporting period, in mill. EUR | 30 Sep 2019 | Level 1 | Level 2 |
| Financial assets at fair value through profit and loss | |||
| Securities held for trading | 826.8 | 762.8 | 64.0 |
| Derivatives held for trading | |||
| Currency and interest rate swaps and options | 8.1 | 8.1 | |
| Currency derivatives | 93.9 | 93.9 | |
| - of which in fair value hedge accounting | 31.1 | 31.1 | |
| - of which in cash flow hedge accounting | 56.5 | 56.5 | |
| Commodity derivatives | 1.8 | 1.8 | |
| - of which in cash flow hedge accounting | 1.8 | 1.8 | |
| Total | 930.6 | 762.8 | 167.8 |
| Financial liabilities recognised at fair value through profit and loss |
| Total | 69.1 | 69.1 |
|---|---|---|
| - of which in cash flow hedge accounting | 54.8 | 54.8 |
| Commodity derivatives | 54.9 | 54.9 |
| - of which in cash flow hedge accounting | 14.1 | 14.1 |
| Currency derivatives | 14.2 | 14.2 |
| Derivatives held for trading |
During the reporting period no significant transfers took place between fair value hierarchy Levels 1 and 2.
The fair values of hierarchy Level 1 are based fully on quoted (unadjusted) prices in active markets of the same assets and liabilities. The fair values of Level 2 instruments are, to a significant extent, based on input data other than the quoted prices included in Level 1, but still mainly based directly observable data (price) or indirectly observable data (derived from price) for the particular asset or liability.
There were no business acquisitions or disposals during three first quarters of 2019.
The effective tax rate for Q1-Q3 2019 was 20.0% (19.9%).
A dividend for 2018 of 0.274 euro per share, amounting to a total of EUR 35.0 million, was decided in the Annual General Meeting on 20 March 2019. The dividend was paid on 2 April 2019.
A dividend for 2017 of 0.30 euro per share, amounting to a total of EUR 38.4 million, was decided in the Annual General Meeting on 20 March 2018. The dividend was paid on 4 April 2018.
| in mill. EUR | 30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 |
|---|---|---|---|
| Carrying amount at the beginning of period | 1,493.5 | 1,389.7 | 1,389.7 |
| Additions | 350.7 | 175.1 | 339.6 |
| Change in advances | -13.4 | 38.7 | 40.7 |
| Currency hedging of aircraft acquisitions | -13.6 | -23.3 | -34.9 |
| Disposals and reclassifications | -0.6 | -15.8 | -85.9 |
| Depreciation | -138.9 | -112.6 | -155.8 |
| Carrying amount at the end of period | 1,677.7 | 1,451.8 | 1,493.5 |
| Proportion of assets held for sale at the beginning of period | 0.1 | 0.1 | 0.1 |
| Proportion of assets held for sale at the end of period | 0.0 | 0.1 |
| in mill. EUR | 30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 |
|---|---|---|---|
| Carrying amount at the beginning of period | 998.6 | 1,068.3 | 1,068.3 |
| New contracts | 13.5 | 37.7 | 122.7 |
| Reassessments and modifications | -1.1 | 8.7 | 11.8 |
| Disposals | -15.1 | -9.5 | -65.8 |
| Depreciation | -97.0 | -104.1 | -138.4 |
| Carrying amount at the end of period | 898.9 | 1,001.2 | 998.6 |
| Non-current assets held for sale | 30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 |
|---|---|---|---|
| Intangible and tangible assets | 0.0 | 0.1 | |
| Assets from subsidiary held for sale | 15.3 | ||
| Total | 15.4 | 0.1 |
| Liabilities of non-current assets held for sale | 30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 |
|---|---|---|---|
| Liabilities from subsidiary held for sale | 10.5 | ||
| Total | 10.5 |
During the first three quarters of 2019 Finnair amortized its loans according to the loan instalment programs.
| 17. CONTINGENT LIABILITIES | |||
|---|---|---|---|
| in mill. EUR | 30 Sep 2019 | 30 Sep 2018 | 31 Dec 2018 |
| Guarantees on behalf of group undertakings | 83.2 | 81.7 | 82.0 |
| Guarantees on behalf of others | 0.6 | ||
| Total | 83.2 | 81.7 | 82.6 |
Investment commitments for property, plant and equipment as at 30 September 2019 totaled 849 million euros (31 December 2018: 975). Lease commitments as at 30 September 2019 for VAT obligations, short-term leases of facilities and leases of low value IT equipment, that do not qualify as IFRS 16 leases, totaled 24 million euros (31 December 2018: 27).
| in mill. EUR | Q1-Q3 2019 | Q1-Q3 2018 | 2018 |
|---|---|---|---|
| Sales of goods and services | |||
| Associates and joint ventures | 19.9 | 33.0 | 44.1 |
| Pension fund | 0.4 | 0.0 | 0.2 |
| Purchases of goods and services | |||
| Associates and joint ventures | 79.9 | 78.9 | 105.4 |
| Pension fund | 10.7 | 10.9 | 15.1 |
| Financial income and expenses | |||
| Associates and joint ventures | 2.9 | 2.0 | |
| Pension fund | -0.2 | -0.1 | -0.1 |
| Receivables | |||
| Non-current receivables from joint ventures | 37.1 | ||
| Current receivables from associates and joint ventures | 22.3 | 9.2 | |
| Liabilities | |||
| Non-current liabilities to joint ventures | 3.6 | 3.6 | |
| Non-current liabilities to pension fund | 99.8 | 9.0 | 16.5 |
| Current liabilities to associates and joint ventures | 0.3 | 2.1 |
There have not been any material events after the closing date.
As of 1 January 2019, Finnair has adopted the new IFRS 16 Leases standard using the full retrospective method. Finnair has also changed its accounting principle relating to aircraft frame components, including cabin components and frame overhauls, and made structural changes in its financial reporting chart of accounts, including income statement, balance sheet and cash flow reporting changes. Finnair´s financial reporting for 2018 has been restated to account for the new reporting practices.
Finnair has published a separate Stock Exchange Release 21st March 2019 related to the changes, which encloses the restated financials, including also tables where the different restatement effects to 2018 are specified separately for each restatement. Tables are available also in excel-format on Finnair´s investor relations website at https://investors.finnair.com/en
Below is presented the summary of changes to figures and accounting principles as well as the restatement effects tables for each quarter of 2018 with combined effect of all three restatements.
The new leasing standard IFRS 16 is effective from 2019 onwards. It replaces the previous standard (IAS 17 Leases). Finnair has adopted the standard from 2019 onwards and has applied the full retrospective method to each prior reporting period presented.
The new standard has a significant impact to Finnair Group financial statements and key ratios. The present value of the future operating lease payments for aircraft, real estate and other qualifying operating lease arrangements are recognized as right-of-use assets with corresponding interest-bearing lease liabilities on the balance sheet. Previously, future lease payments for operating leases were presented in the notes as operating lease commitments at their nominal value.
Assets at 31.12.2018 increased by 992.3 million euros due to the recognition of right-of-use assets, of which approximately 80 % are aircraft. Liabilities increased in total by 1,091.6 million euros due to the recognition of the present value of qualifying operating lease liabilities. The comparative information was restated, and the cumulative effect of initially applying IFRS 16 was made as an adjustment to opening equity of 2018. The change decreased Finnair´s equity at 31.12.2018 by 99.3 million euros.
Although the assets associated with operating leases are denominated in Euros when converted into right of use assets, the majority of Finnair's aircraft lease contracts will remain payable in US dollars. As of January 2019, Finnair has mitigated the foreign exchange volatility introduced by this difference by adjusting its hedging policy.
The change had significant impacts to Finnair´s 2018 key figures reported. The increase of interest-bearing net debt reflected to key figure Gearing %, which increased by 115.6 p.p. due to the implementation of IFRS 16. Equity ratio decreased by 11.3 p.p. due to the implementation of IFRS 16. Due to the implementation of IFRS 16, Finnair also gave up on reporting two alternative key performance indicators from 1st January 2019 onwards. Adjusted net debt and adjusted gearing, where the operating lease payments for aircraft have been previously adjusted, are no longer presented. Interest-bearing lease liability is now recognized on the balance sheet and therefore already included in the interest-bearing net debt and gearing, without any separate adjustment needed.
The leasing standard had also impact to Finnair's income statement. From 2019 onwards, operating lease expenses are divided into the depreciation of the right-of-use asset (affecting the comparable operating result) and the interest costs associated with the liability (affecting finance net). The interest costs for the liability are at their highest in the beginning of the lease term, decreasing towards the end of the term as the lease liability is amortized. Previously, operating lease expenses were accrued over the lease term primarily on a straight-line basis and recognized in the operating result as lease payments for aircraft and other rents, according to the lease contract terms. In addition to the impact on operating result and EBITDA, cash flow from operating activities also increases, as the amortization of lease liabilities is transferred from operating activities to financing activities in cash flow.
Finnair 2018 comparable operating result improved by 54.7 million euros and operating resuld improved by 54.8 million euros due to the implementation of the new standard. Depreciation increased due to depreciation of right of use assets, but the qualifying operating lease payments are no longer be included in operating result and are instead included in lease liability repayments and financial expenses. Finnair's net result in 2018 however decreased by 44.3 million euros due to interest expenses and foreign exchange losses associated with USD denominated aircraft lease payments and liability. The majority of the decrease in Finnair's net result is derived from unrealized foreign exchange losses caused by the translation of the USD denominated liability. The amount of the foreign currency exchange effect could be positive or negative, depending on the USD-rate at the closing date. As of January 2019, Finnair has mitigated the foreign exchange volatility introduced by this difference by adjusting its hedging policy. The annual effect in net result going forward is dependent on the size of the qualifying operating lease portfolio and the duration of the leases.
In the cash flow statement, repayments of lease liabilities are moved from operating cash flow to financing cash flow in accordance with IFRS 16. Operating cash flow increased by 111.9 million euros, with a corresponding reduction in financing cash flow.
The leases recognized as right-of-use assets under IFRS 16 at Finnair are comprised of operating leased aircraft and spare engines, real estate, cars and ground equipment. Aircraft accounts for the majority (~80%) of the right-of-use asset and lease liability balance sheet value. The majority of the remaining (~20%) is real estate contracts.
Finnair uses the exemption provided by the standard not to account for lease liability for operating leases which have a term of 12 months or less, and which do not include an option to purchase the underlying asset. In addition, Finnair does not account for IFRS 16 lease liability for leases for which the underlying asset is not material to Finnair. The assessment of whether the underlying asset is material and is within the scope or excluded from the recognition requirements of IFRS 16 is based on the concept of materiality in the Conceptual Framework and IAS 1. Finnair recognizes the lease payments associated with such short-term and immaterial leases as an expense on a straight-line basis.
Lease term: For the aircraft operating lease contracts, the lease term corresponds to the non-cancellable duration of the contracts signed except in cases where the Group is reasonably certain of exercising either an extension option or an early termination option that is included in the contract. At the initial measurement of the lease, Finnair does not normally include any option period in the lease term as there is significant uncertainty whether Finnair will continue the lease term, even if the lease allows for extensions. The negotiation of possible extension typically begins 12-18 months prior to the initial operating lease term expiry. Finnair remeasures the lease liability when it decides to use the extension option or when there is some other significant indication that the lease period will be extended. For example, major modifications to leased aircraft may be considered as indications of extending the lease, especially if done close to the end of leasing period.
Discount rate: Aircraft lease agreements do not clearly define the interest rate implicit in a lease. Since the fair values of the aircraft are provided publicly by third parties, Finnair is able to calculate the implicit interest rate for each qualifying aircraft operating lease. The rate implicit in the lease is defined as the rate that causes the sum of the present value of the lease payments and the present value of the residual value of the underlying asset at the end of the lease to equal the fair value of the underlying asset.
Maintenance costs: Finnair recognizes provisions for leased aircraft to maintain the aircraft during the period of the lease. For owned aircraft, provisions are not recognized because the cost is avoidable, by for instance selling the asset. IFRS 16 requires including restoration costs in the right-of-use asset. Finnair uses the criteria of whether the maintenance cost is avoidable or unavoidable in determining whether the maintenance cost is capitalized to the RoU asset or not.
Finnair is obliged to return leased aircraft and their engines according to the redelivery condition set in the lease agreement. If at the time of redelivery, the condition of the aircraft and its engines differs from the agreed redelivery condition, Finnair needs to either maintain the aircraft so that it meets the agreed redelivery condition or settle the difference in cash to the lessor. The maintenance costs can be divided into two main groups:
1)costs that incur independent of the usage of the aircraft / leasing period and
2)costs that incur dependent on the usage of the aircraft / leasing period
The final check and painting required at redelivery are considered unavoidable maintenance costs that realize when the aircraft is redelivered to the lessor, irrespective of the time or flight hours. The counterpart of the provision is recorded in the book value of the right-of-use asset at the commencement of the lease in accordance with IFRS 16 (IFRS 16:25).
Respectively, costs depending on the usage of the aircraft are not considered as part of the right-of-use asset cost.
Excluded contracts: Excluded, non-qualifying, aircraft lease contracts include wet leases and spare engines that have been mainly excluded based on short-term exemption. Finnair analyses the lease term separately for each lease based on contract term and possible extension and early termination options. When the lease term is 12 months or less and Finnair does not intend to continue the lease period after that, the lease agreement is excluded from lease liabilities.
Wet lease agreements are made to lease airline capacity typically on a short-term basis, for example when there are shortages in resourcing. The lease term of a typical wet lease agreement can vary from one day to one year.
Spare engines that have been leased on short-term basis in exceptional cases (e.g., when the owned engine is broken), are excluded from the lease liability. The lease term is usually only few days up to few months and Finnair does not intend to lease the spare engines for a longer period of time than they are needed.
Lease term: The lease term corresponds to the non-cancellable duration of the contracts signed, except in cases where Finnair is reasonably certain of exercising either an extension option or an early termination option included in the contract.
Discount rate: Since facility agreements do not clearly specify the implicit interest rate in the lease contracts, Finnair uses an estimate of incremental borrowing cost for a portfolio of facilities, meaning that all of the facilities' (land and real estate) lease contracts are discounted using the same discount rate. A management estimate of the incremental borrowing cost is used in determining the interest rate.
Excluded contracts: Based on Finnair's evaluation, service contracts that relate to the usage of airports and terminals (HEL hub) do not qualify as lease arrangements for IFRS 16 purposes. In the contracts, the lessor has a substitution right to substitute the leased area with another area, which leads to classifying the contracts as non-leases. As an exception from this principle, there are specific lounge areas at Helsinki-Vantaa airport that are dedicated for Finnair's use, and these are therefore included in lease contracts.
Finnair has analyzed lease contracts where the lease term is not fixed but both the lessor and lessee have an option to terminate the lease within 1-12 months' notice and has concluded that these contracts are not material and termination of these contracts is practically realistic within the time of the notice (e.g. small storage space). Therefore, these contracts have been mainly excluded from the lease liability.
Other leases constitute mainly of company cars and ground equipment, where the lease is considered long term and therefore qualify as IFRS 16 leases.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. Finnair has used this practical expedient for those company car and ground equipment leases that include service components.
The lease term corresponds to the non-cancellable duration of the contracts signed except in cases where Finnair is reasonably certain of exercising either an extension option or an early termination option included in the contract. Current lease contracts do not include such options that would be reasonably certain to be exercised, so the lease term of the current contracts corresponds to the lease duration of the signed contract. Finnair uses an estimate of incremental borrowing cost for each portfolio of cars and ground equipment, meaning that all the lease contracts are discounted using the same discount factor. A management estimate is used to determine the incremental interest rate. Lease contracts that individually (or by asset class) are not material to Finnair have been excluded from the lease liability. These contracts include small IT-equipment and office equipment.
IFRS 16 did not change substantially how a lessor accounts for leases. Under IFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently. Under IFRS 16, an intermediate lessor is required to classify the sublease as a finance or operating lease by reference to the right-of-use asset arising from the head lease (and not by reference to the underlying asset as was the case under IAS 17). Because of this change, Finnair has reclassified certain of its sublease agreements as finance leases as at 1st January 2019.
Finnair subleases 9 (nine) aircraft and a small amount of ground equipment, where by reference to the head lease, the lease term is for the majority of the remaining economic life arising from the Right-of-use asset and therefore these are classified as finance leases in accordance with IFRS 16. The right-of-use asset arising from the head lease is derecognized and a net investment corresponding to the discounted lease payments is recognized on the Finnair balance sheet.
In accordance with IFRS 16, for subleases where Finnair is the lessor and are reclassified from operating subleases to finance leases due to IFRS 16, contracts ongoing at 1.1.2019 (date of initial application) are accounted for as new finance leases and the gain arising on the subleases is included in the cumulative catch-up adjustment in retained earnings.
Finnair has revised the accounting principles of its aircraft frame components and overhauls. Finnair´s financial reporting has been restated to each prior reporting period presented. Previously, only the heavy maintenance of airframes had been separated out into maintenance components. From 1st January 2019 onwards, other material maintenance and cabin components, such as landing gear and business class seats, are accounted for as separate components. The different components are depreciated based on their economic useful lives or during their maintenance period. Previously, overhauls have been booked as expenses as occurred.
Finnair also changed its accounting principle for leased aircraft, so that a provision is recognized following the same principle that Finnair applies to the maintenance of its owned aircraft.
Assets at 31.12.2018 increased by 4.0 million euros. The acquisition cost of the capitalized overhauls increased the assets, and the shorter depreciation period of the cabin components compared to the old policy decreased the asset value. Liabilities increased by 7.9 million euros due to the recognition of provisions for maintenance events. The comparative information was restated, and the cumulative effect of initially applying the accounting principle was made as an adjustment to opening equity of 2018. The change decreased Finnair´s equity at 31.12.2018 by 3.9 million euros.
The change had also some impact to income statement and key ratios reported. 2018 comparable operating result decreased because of the change by 5.7 million euros, operating result decreased by 6.0 million euros and net result decreased by 4.7 million euros. Equity ratio decreased by 0.2 p.p. and gearing decreased by 0.1 p.p. In cash flow, the investments to owned aircraft maintenance events are now presented in investing cash flow instead of operating cash flow.
Finnair has renewed the presentation of its consolidated income statement, balance sheet and cash flow statement by grouping costs in the consolidated income statement to better reflect business development and operations and to include the new line items required by the IFRS 16 standard. In all statements, the lines are named to be clearer. Structural changes did not have effect on figures, but rather the line items in income statement, balance sheet and cash flow.
In the new income statement structure, customer compensations have been transferred from revenue to passenger and handling expenses. The volume-driven operating expenses have been transferred from other expenses to relevant line items:
• Personnel related expenses and hired and outsourced crew have been transferred to staff costs.
• Booking fees and credit card commissions have been transferred to sales, marketing and distribution costs.
• Lounge costs, cancellations costs, rerouting compensations, wifi-costs and IT fees based on passengers' amount have been transferred to passenger and handling services.
Groupings and naming have been changed to be more relevant:
• Other rents account name has been changed to capacity rents. Property related costs have been transferred to account property, IT and other expenses.
• Ground handling, catering and tour operation expenses have been combined to account passenger and handling services.
Due to implementing IFRS 16, lease payments are no longer presented in operating result so lease payments for aircraft account has been removed.
In non-current assets the fixed assets have been split to fleet and to other fixed assets, which include other than fleet related tangible and intangible assets. Due to IFRS 16 implementation, additional accounts for the right-of-use assets of fleet and other fixed assets have been added. Respectively, additional accounts have been added for the non-current and current lease liabilities.
In non-current assets the investments in associates and joint ventures have been combined to other non-current assets. In current assets the inventories have been combined with prepaid expenses. The new account receivables related to revenue include trade receivables and accrued income. In non-current liabilities the other non-current liabilities have been combined to the new account provisions and other noncurrent liabilities.
Cash flow structure has been changed to begin from result before taxes and line item income taxes has been removed from the structure. Comparable EBITDA, which is presented in the Finnair income statement, has been added to the structure and EBITDA, that is not presented in the income statement, is removed. Items affecting comparability, that are specified in a separate note of interim and financial statements, have been added as a new line item to cash flow and the gains and losses on aircraft and other transactions, that belong to the items affecting comparability account group, have been moved there.
In net cash flow from investing activities, the structure has been changed to correspond to the balance sheet presentation of fleet and other fixed assets. Divestments of fixed assets are now presented separately from divestments of group shares. Investments and divestments of group shares have been moved to line item change in other non-current assets.
Due to implementing IFRS 16, a new line item for repayments of lease liabilities has been added to the net cash flow from financing activities.
IFRS interpretation committee (IFRIC) made an agenda decision in September 2019 of Compensations for Delays or Cancellations (IFRS 15 Revenue from Contracts with Customers). IFRIC concluded in its decision, that customer compensations for delays or cancellations is a variable consideration in the contract. Therefore, it should be recognized as an adjustment to revenue.
Finnair has previously considered the customer compensations as penalties and consequently accounted for those in passenger and handling expenses. In accordance with the IFRIC decision, Finnair will revise its accounting during Q4 2019 and will reclassifiy customer compensations for delays and cancellations as an adjustment to revenue. Amount is not material for Finnair.
| Reported | Restated | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q1-Q2 | Q1-Q3 | Q1-Q4 | Q1 | Q1-Q2 | Q1-Q3 | Q1-Q4 | ||
| Key figures | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | |
| Revenue, EUR million | 635.3 | 1,350.4 | 2,151.5 | 2,834.6 | 641.1 | 1,359.3 | 2,166.2 | 2,849.7 | |
| Operating expenses total, EUR million | 651.2 | 1,336.2 | 2,046.4 | 2,739.0 | 646.3 | 1,323.2 | 2,029.4 | 2,705.1 | |
| Operating expenses excl. fuel, EUR million | 523.8 | 1,063.3 | 1,610.8 | 2,158.0 | 518.9 | 1,050.4 | 1,593.8 | 2,124.0 | |
| Comparable operating result, EUR million | 3.9 | 51.8 | 160.2 | 169.4 | 14.6 | 73.7 | 191.9 | 218.4 | |
| Comparable operating result, % of revenue | 0.6 | 3.8 | 7.4 | 6.0 | 2.3 | 5.4 | 8.9 | 7.7 | |
| Operating result, EUR million | 6.0 | 45.9 | 151.7 | 207.5 | 16.9 | 67.7 | 183.1 | 256.3 | |
| DEL | Comparable EBITDAR, % of revenue | 12.3 | 14.9 | 17.9 | 16.8 | ||||
| NEW | Comparable EBITDA, % of revenue | 13.5 | 16.0 | 18.9 | 18.0 | ||||
| Earnings per share (EPS), EUR | -0.01 | 0.18 | 0.79 | 1.08 | 0.08 | -0.07 | 0.46 | 0.70 | |
| Equity per share, EUR | 7.60 | 8.21 | 9.02 | 8.01 | 7.26 | 7.53 | 8.26 | 7.20 | |
| Unit revenue per available seat kilometre | |||||||||
| (RASK), cents/ASK | 6.57 | 6.62 | 6.74 | 6.69 | 6.63 | 6.67 | 6.79 | 6.72 | |
| RASK at constant currency, cents/ASK | 6.71 | 6.73 | 6.85 | 6.78 | 6.77 | 6.78 | 6.90 | 6.81 | |
| Unit revenue per revenue passenger kilometre (yield), cents/RPK |
6.05 | 6.30 | 6.44 | 6.48 | 6.12 | 6.35 | 6.49 | 6.52 | |
| Unit cost per available seat kilometre (CASK), cents/ASK | 6.53 | 6.37 | 6.24 | 6.29 | 6.48 | 6.31 | 6.19 | 6.21 | |
| CASK excluding fuel, cents/ASK | 5.21 | 5.03 | 4.88 | 4.92 | 5.16 | 4.97 | 4.82 | 4.84 | |
| CASK excluding fuel at constant currency, cents/ASK | 5.31 | 5.03 | 4.86 | 4.89 | 5.26 | 4.96 | 4.81 | 4.81 | |
| Equity ratio, % | 32.6 | 33.9 | 37.5 | 34.7 | 23.4 | 23.7 | 26.3 | 23.3 | |
| Gearing, % | -28.0 | -39.1 | -37.4 | -38.9 | 80.4 | 65.6 | 57.3 | 76.9 | |
| 76.7 | 60.7 | 55.2 | 67.2 | ||||||
| DEL | Adjusted gearing, % | ||||||||
| Interest-bearing net debt, EUR million | -272.1 | -410.5 | -431.4 | -397.9 | 746.8 | 631.7 | 605.6 | 706.7 | |
| DEL | Adjusted net debt, EUR million | 746.0 | 637.3 | 636.7 | 686.8 | 746.8 | 631.7 | 605.6 | 706.7 |
| DEL | Adjusted net debt / Comparable EBITDAR, LTM | - | - | - | 1.4 | ||||
| NEW | Interest-bearing net debt / Comparable EBITDA, LTM * | - | - | - | 1.4 | ||||
| Gross capital expenditure, EUR million | 55.8 | 85.5 | 168.5 | 331.0 | 64.2 | 108.0 | 221.6 | 474.0 | |
| Return on capital employed (ROCE), LTM, % * | - | - | - | 11.9 | - | - | - | 9.3 |
| Reported | Restated | |||||||
|---|---|---|---|---|---|---|---|---|
| Key figures | Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
| Revenue, EUR million | 635.3 | 715.0 | 801.2 | 683.1 | 641.1 | 718.2 | 806.9 | 683.5 |
| Operating expenses total, EUR million | 651.2 | 685.0 | 710.3 | 692.5 | 646.3 | 676.9 | 706.2 | 675.7 |
| Operating expenses excl. fuel, EUR million | 523.8 | 539.6 | 547.5 | 547.1 | 518.9 | 531.5 | 543.4 | 530.2 |
| Comparable operating result, EUR million | 3.9 | 47.9 | 108.4 | 9.2 | 14.6 | 59.1 | 118.2 | 26.5 |
| Comparable operating result, % of revenue | 0.6 | 6.7 | 13.5 | 1.3 | 2.3 | 8.2 | 14.6 | 3.9 |
| Operating result, EUR million | 6.0 | 39.9 | 105.7 | 55.9 | 16.9 | 50.8 | 115.5 | 73.1 |
| Comparable EBITDAR, % of revenue | 12.3 | 17.2 | 23.0 | 13.2 | ||||
| Comparable EBITDA, % of revenue | 13.5 | 18.2 | 23.7 | 15.2 | ||||
| Earnings per share (EPS), EUR | -0.01 | 0.19 | 0.60 | 0.29 | 0.08 | -0.15 | 0.52 | 0.24 |
| Unit revenue per available seat kilometre (RASK), cents/ASK |
6.57 | 6.67 | 6.95 | 6.52 | 6.63 | 6.70 | 7.00 | 6.53 |
| RASK at constant currency, cents/ASK | 6.71 | 6.75 | 7.06 | 6.56 | 6.77 | 6.78 | 7.11 | 6.56 |
| Unit revenue per revenue passenger kilometre (yield), cents/RPK |
6.05 | 6.52 | 6.69 | 6.59 | 6.12 | 6.56 | 6.75 | 6.59 |
| Unit cost per available seat kilometre (CASK), cents/ASK | 6.53 | 6.22 | 6.01 | 6.43 | 6.48 | 6.15 | 5.97 | 6.27 |
| CASK excluding fuel, cents/ASK | 5.21 | 4.87 | 4.60 | 5.05 | 5.16 | 4.79 | 4.56 | 4.88 |
| CASK excluding fuel at constant currency, cents/ASK | 5.31 | 4.77 | 4.57 | 4.98 | 5.26 | 4.70 | 4.53 | 4.82 |
| Gross capital expenditure, EUR million | 55.8 | 29.7 | 83.0 | 162.5 | 64.2 | 43.8 | 113.6 | 252.4 |
* Finnair restated key figures that use rolling 12-months income statement figures from 31.12.2018 onwards. Earlier periods were not restated because income statement is restated only from 1.1.2018 onwards.
| Reported Restated |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q1-Q2 | Q1-Q3 | Q1-Q4 | Q1 | Q1-Q2 | Q1-Q3 | Q1-Q4 | ||
| in mill. EUR | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | |
| Revenue | 635.3 | 1,350.4 | 2,151.5 | 2,834.6 | 641.1 | 1,359.3 | 2,166.2 | 2,849.7 | |
| Other operating income | 19.8 | 37.6 | 55.1 | 73.7 | 19.8 | 37.6 | 55.1 | 73.7 | |
| Operating expenses | |||||||||
| Staff costs | -106.3 | -222.1 | -331.1 | -433.4 | -123.3 | -256.1 | -380.4 | -499.6 | |
| Fuel costs | -127.4 | -272.8 | -435.6 | -581.0 | -127.4 | -272.8 | -435.6 | -581.0 | |
| DEL | Other rents | -36.5 | -74.8 | -114.0 | -154.9 | ||||
| NEW | Capacity rents | -28.2 | -58.3 | -91.5 | -122.4 | ||||
| Aircraft materials and overhaul | -38.8 | -75.1 | -122.0 | -169.1 | -38.2 | -74.8 | -120.0 | -162.9 | |
| Traffic charges | -65.1 | -143.2 | -226.5 | -300.8 | -65.1 | -143.2 | -226.5 | -300.8 | |
| DEL | Sales and marketing expenses | -22.7 | -45.2 | -67.2 | -92.4 | ||||
| NEW | Sales, marketing and distribution costs | -40.8 | -80.9 | -118.1 | -159.0 | ||||
| DEL | Ground handling and catering expenses | -63.7 | -127.0 | -191.5 | -256.9 | ||||
| DEL | Expenses for tour operations | -33.1 | -55.8 | -85.6 | -113.4 | ||||
| NEW | Passenger and handling services | -119.7 | -225.6 | -343.1 | -453.9 | ||||
| DEL | Other expenses | -83.1 | -170.5 | -247.8 | -330.9 | ||||
| NEW | Property, IT and other expenses | -31.6 | -68.1 | -97.6 | -131.3 | ||||
| DEL | Comparable EBITDAR | 78.3 | 201.3 | 385.4 | 475.4 | ||||
| NEW | Comparable EBITDA | 86.5 | 217.1 | 408.5 | 512.6 | ||||
| DEL | Lease payments for aircraft | -38.8 | -78.3 | -116.5 | -155.0 | ||||
| Depreciation and impairment | -35.6 | -71.2 | -108.7 | -151.1 | -72.0 | -143.4 | -216.6 | -294.2 | |
| Comparable operating result | 3.9 | 51.8 | 160.2 | 169.4 | 14.6 | 73.7 | 191.9 | 218.4 | |
| Unrealized changes in foreign currencies | |||||||||
| of fleet overhaul provisions | 2.4 | -2.9 | -3.6 | -4.7 | 2.6 | -3.0 | -3.8 | -4.9 | |
| Fair value changes of derivatives where | |||||||||
| hedge accounting is not applied | -0.4 | -2.7 | -3.9 | 0.2 | -0.4 | -2.7 | -3.9 | 0.2 | |
| Sales gains and losses on aircraft and other transactions | 0.2 | 0.1 | -0.5 | 42.7 | 0.2 | 0.1 | -0.5 | 42.7 | |
| Restructuring costs | -0.1 | -0.3 | -0.5 | -0.1 | -0.1 | -0.3 | -0.5 | -0.1 | |
| Operating result | 6.0 | 45.9 | 151.7 | 207.5 | 16.9 | 67.7 | 183.1 | 256.3 | |
| Financial income | -0.7 | -1.4 | -1.7 | -2.9 | -0.6 | -1.1 | -1.2 | -2.2 | |
| Financial expenses | -3.4 | -7.9 | -12.6 | -16.0 | 0.5 | -69.2 | -96.7 | -126.8 | |
| Result before taxes | 2.0 | 36.7 | 137.3 | 188.6 | 16.8 | -2.6 | 85.2 | 127.2 | |
| Income taxes | -0.4 | -7.3 | -27.5 | -37.9 | -3.3 | 0.6 | -17.0 | -25.6 | |
| Result for the period | 1.6 | 29.3 | 109.8 | 150.7 | 13.4 | -2.0 | 68.2 | 101.6 | |
| Attributable to | |||||||||
| Owners of the parent company | 1.6 | 29.3 | 109.8 | 150.7 | 13.4 | -2.0 | 68.2 | 101.6 | |
| Earnings per share attributable to | |||||||||
| shareholders of the parent company, | |||||||||
| EUR (basic and diluted) | -0.01 | 0.18 | 0.79 | 1.08 | 0.08 | -0.07 | 0.46 | 0.70 |
| Reported | Restated | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||
| in mill. EUR | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | 2018 | |
| Revenue | 635.3 | 715.0 | 801.2 | 683.1 | 641.1 | 718.2 | 806.9 | 683.5 | |
| Other operating income | 19.8 | 17.9 | 17.5 | 18.6 | 19.8 | 17.9 | 17.5 | 18.6 | |
| Operating expenses | |||||||||
| Staff costs | -106.3 | -115.7 | -109.1 | -102.3 | -123.3 | -132.8 | -124.3 | -119.2 | |
| Fuel costs | -127.4 | -145.4 | -162.7 | -145.4 | -127.4 | -145.4 | -162.7 | -145.4 | |
| DEL | Other rents | -36.5 | -38.3 | -39.2 | -40.9 | ||||
| NEW | Capacity rents | -28.2 | -30.1 | -33.2 | -30.9 | ||||
| Aircraft materials and overhaul | -38.8 | -36.4 | -46.9 | -47.1 | -38.2 | -36.5 | -45.2 | -42.9 | |
| Traffic charges | -65.1 | -78.1 | -83.3 | -74.4 | -65.1 | -78.1 | -83.3 | -74.4 | |
| DEL | Sales and marketing expenses | -22.7 | -22.5 | -22.0 | -25.2 | ||||
| NEW | Sales, marketing and distribution costs | -40.8 | -40.1 | -37.3 | -40.9 | ||||
| DEL | Ground handling and catering expenses | -63.7 | -63.3 | -64.5 | -65.4 | ||||
| DEL | Expenses for tour operations | -33.1 | -22.7 | -29.8 | -27.8 | ||||
| NEW | Passenger and handling services | -119.7 | -105.9 | -117.5 | -110.8 | ||||
| DEL | Other expenses | -83.1 | -87.3 | -77.3 | -83.1 | ||||
| NEW | Property, IT and other expenses | -31.6 | -36.6 | -29.5 | -33.6 | ||||
| DEL | Comparable EBITDAR | 78.3 | 123.0 | 184.0 | 90.0 | ||||
| NEW | Comparable EBITDA | 86.5 | 130.6 | 191.4 | 104.1 | ||||
| DEL | Lease payments for aircraft | -38.8 | -39.5 | -38.1 | -38.5 | ||||
| Depreciation and impairment | -35.6 | -35.6 | -37.5 | -42.4 | -72.0 | -71.5 | -73.2 | -77.5 | |
| Comparable operating result | 3.9 | 47.9 | 108.4 | 9.2 | 14.6 | 59.1 | 118.2 | 26.5 | |
| Unrealized changes in foreign currencies | |||||||||
| of fleet overhaul provisions | 2.4 | -5.3 | -0.7 | -1.1 | 2.6 | -5.6 | -0.8 | -1.1 | |
| Fair value changes of derivatives where | |||||||||
| hedge accounting is not applied | -0.4 | -2.3 | -1.2 | 4.1 | -0.4 | -2.3 | -1.2 | 4.1 | |
| Sales gains and losses on aircraft and other transactions | 0.2 | -0.2 | -0.6 | 43.2 | 0.2 | -0.2 | -0.6 | 43.2 | |
| Restructuring costs | -0.1 | -0.2 | -0.2 | 0.4 | -0.1 | -0.2 | -0.2 | 0.4 | |
| Operating result | 6.0 | 39.9 | 105.7 | 55.9 | 16.9 | 50.8 | 115.5 | 73.1 | |
| Financial income | -0.7 | -0.7 | -0.3 | -1.1 | -0.6 | -0.5 | -0.2 | -1.0 | |
| Financial expenses | -3.4 | -4.5 | -4.8 | -3.4 | 0.5 | -69.6 | -27.6 | -30.1 | |
| Result before taxes | 2.0 | 34.7 | 100.6 | 51.3 | 16.8 | -19.4 | 87.7 | 42.0 | |
| Income taxes | -0.4 | -6.9 | -20.1 | -10.5 | -3.3 | 3.9 | -17.5 | -8.6 | |
| Result for the period | 1.6 | 27.8 | 80.5 | 40.8 | 13.4 | -15.5 | 70.2 | 33.4 | |
| Attributable to | |||||||||
| Owners of the parent company | 1.6 | 27.8 | 80.5 | 40.8 | 13.4 | -15.5 | 70.2 | 33.4 | |
| Earnings per share attributable to | |||||||||
| shareholders of the parent company, | |||||||||
| EUR (basic and diluted) | -0.01 | 0.19 | 0.60 | 0.29 | 0.08 | -0.15 | 0.52 | 0.24 |
| Reported | Restated | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Q4 | Q1 | Q2 | Q3 | Q4 | Q4 | Q1 | Q2 | Q3 | Q4 | ||
| in mill. EUR | 2017 | 2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2018 | 2018 | 2018 | |
| ASSETS | |||||||||||
| Non-current assets | |||||||||||
| Intangible assets | 15.5 | 17.3 | 19.2 | 20.8 | 20.4 | ||||||
| Tangible assets | 1,422.1 | 1,444.9 | 1,450.1 | 1,485.8 | 1,526.6 | ||||||
| NEW | Fleet | 1,218.2 | 1,246.4 | 1,244.3 | 1,280.4 | 1,320.2 | |||||
| NEW | Right-of-use fleet | 881.8 | 856.6 | 839.9 | 832.0 | 834.3 | |||||
| Fleet total | 2,100.1 | 2,103.0 | 2,084.2 | 2,112.4 | 2,154.5 | ||||||
| Other fixed assets | 171.5 | 169.2 | 172.0 | 171.4 | 173.2 | ||||||
| Right-of-use other fixed assets | 186.4 | 181.4 | 175.9 | 169.2 | 164.3 | ||||||
| Other fixed assets total | 357.9 | 350.5 | 347.9 | 340.6 | 337.5 | ||||||
| Investments in associates and joint ventures |
2.5 | 2.5 | 2.5 | 2.5 | 3.3 | ||||||
| Loan and other receivables | 5.6 | 4.9 | 4.6 | 4.3 | 4.3 | ||||||
| Other non-current assets | 8.1 | 7.4 | 7.1 | 6.8 | 53.3 | ||||||
| Non-current assets total | 1,445.7 | 1,469.6 | 1,476.3 | 1,513.3 | 1,554.7 | 2,466.0 | 2,460.9 | 2,439.2 | 2,459.8 | 2,545.3 | |
| Current assets | |||||||||||
| Inventories | 17.2 | 23.1 | 24.7 | 24.6 | 25.1 | ||||||
| Trade and other receivables | 319.8 | 381.3 | 318.1 | 248.8 | 242.2 | ||||||
| Receivables related to revenue | 268.6 | 285.6 | 243.1 | 195.5 | 152.4 | ||||||
| Inventories and prepaid expenses | 61.9 | 112.4 | 93.2 | 69.9 | 120.7 | ||||||
| Derivative financial instruments | 104.5 | 102.3 | 149.3 | 155.0 | 52.1 | 104.5 | 102.3 | 149.3 | 155.0 | 52.1 | |
| Other financial assets | 833.0 | 822.7 | 907.4 | 921.2 | 892.2 | 833.0 | 822.7 | 907.4 | 921.2 | 892.2 | |
| Cash and cash equivalents | 150.2 | 163.8 | 211.9 | 197.5 | 180.9 | 150.2 | 163.8 | 211.9 | 197.5 | 180.9 | |
| Current assets total | 1,424.6 | 1,493.2 | 1,611.4 | 1,547.1 | 1,392.5 | 1,418.2 | 1,487.0 | 1,604.9 | 1,539.2 | 1,398.3 | |
| Assets held for sale | 16.7 | 16.7 | 15.3 | 15.4 | 0.1 | 16.7 | 16.7 | 15.3 | 15.4 | 0.1 | |
| Assets total | 2,887.1 | 2,979.5 | 3,103.1 | 3,075.8 | 2,947.3 | 3,900.9 | 3,964.6 | 4,059.5 | 4,014.4 | 3,943.6 | |
| EQUITY AND LIABILITIES Equity attributable to owners of the parent |
|||||||||||
| Share capital | 75.4 | 75.4 | 75.4 | 75.4 | 75.4 | 75.4 | 75.4 | 75.4 | 75.4 | 75.4 | |
| Other equity | 940.3 | 897.1 | 975.2 | 1,078.2 | 946.2 | 884.5 | 853.3 | 888.1 | 980.8 | 843.0 | |
| Equity total | 1,015.7 | 972.6 | 1,050.6 | 1,153.7 | 1,021.7 | 960.0 | 928.7 | 963.5 | 1,056.3 | 918.5 | |
| Non-current liabilities | |||||||||||
| Lease liabilities | 1,048.5 | 1,023.9 | 993.6 | 987.9 | 1,034.3 | ||||||
| Other interest-bearing liabilities | 586.2 | 571.4 | 579.2 | 624.8 | 561.0 | 539.9 | 527.5 | 529.3 | 576.4 | 514.2 | |
| Pension obligations | 6.4 | 14.0 | 23.1 | 12.1 | 17.0 | 6.4 | 14.0 | 23.1 | 12.1 | 17.0 | |
| Provisions | 79.0 | 75.1 | 95.7 | 87.3 | 91.3 | ||||||
| Other liabilities | 1.1 | 1.1 | 1.1 | 1.3 | 4.8 | ||||||
| Provisions and other liabilities | 94.7 | 89.9 | 109.0 | 100.6 | 107.1 | ||||||
| Deferred tax liabilities | 73.9 | 71.9 | 91.2 | 116.7 | 73.5 | 60.1 | 61.0 | 69.4 | 92.3 | 47.6 | |
| Non-current liabilities total | 746.7 | 733.5 | 790.3 | 842.0 | 747.6 | 1,749.6 | 1,716.4 | 1,724.3 | 1,769.3 | 1,720.2 | |
| Current liabilities | |||||||||||
| Lease liabilities | 68.7 | 45.3 | 106.2 | 105.3 | 125.1 | ||||||
| Other interest-bearing liabilities | 132.4 | 118.6 | 119.3 | 53.6 | 108.4 | 125.6 | 112.1 | 111.6 | 45.8 | 100.5 | |
| Provisions | 21.1 | 21.0 | 15.6 | 16.5 | 21.2 | 25.8 | 28.2 | 26.5 | 27.7 | 30.9 | |
| Trade payables | 90.7 | 91.7 | 113.2 | 108.4 | 72.6 | 90.7 | 91.7 | 113.2 | 108.4 | 72.6 | |
| Derivative financial instruments | 81.3 | 94.4 | 40.1 | 25.3 | 107.1 | 81.3 | 94.4 | 40.1 | 25.3 | 107.1 | |
| Deferred income and advances received | 475.3 | 613.4 | 679.8 | 565.4 | 548.9 | 475.3 | 613.4 | 679.8 | 565.4 | 548.9 | |
| Liabilities related to employee benefits | 139.2 | 129.1 | 116.4 | 116.1 | 105.6 | 139.2 | 129.1 | 116.4 | 116.1 | 105.6 | |
| Other liabilities | 173.4 | 194.4 | 167.0 | 184.2 | 214.2 | 173.4 | 194.4 | 167.0 | 184.2 | 214.2 | |
| Current liabilities total | 1,113.4 | 1,262.5 | 1,251.4 | 1,069.6 | 1,178.0 | 1,180.1 | 1,308.6 | 1,360.7 | 1,178.3 | 1,304.9 | |
| Liabilities related to assets held for sale | 11.2 | 10.9 | 10.8 | 10.5 | 11.2 | 10.9 | 10.8 | 10.5 | |||
| Liabilities total | 1,871.4 | 2,007.0 | 2,052.5 | 1,922.1 | 1,925.6 | 2,940.9 | 3,035.9 | 3,095.9 | 2,958.1 | 3,025.1 | |
| Equity and liabilities total | 2,887.1 | 2,979.5 | 3,103.1 | 3,075.8 | 2,947.3 | 3,900.9 | 3,964.6 | 4,059.5 | 4,014.4 | 3,943.6 |
| Reported | Restated | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Additional information to Balance Sheet: Interest-bearing net debt and gearing |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
|
| NEW | Lease liabilities | 1,117.2 | 1,069.2 | 1,099.8 | 1,093.2 | 1,159.3 | |||||
| Other interest-bearing liabilities | 718.6 | 690.0 | 698.4 | 678.4 | 669.4 | 665.5 | 639.6 | 640.9 | 622.2 | 614.7 | |
| Cross currency Interest rate swaps | 18.5 | 24.5 | 10.3 | 8.9 | 5.8 | 18.5 | 24.5 | 10.3 | 8.9 | 5.8 | |
| Adjusted interest-bearing liabilities | 737.1 | 714.5 | 708.8 | 687.3 | 675.2 | 1,801.2 | 1,733.4 | 1,751.0 | 1,724.3 | 1,779.8 | |
| Other financial assets | -833.0 | -822.7 | -907.4 | -921.2 | -892.2 | -833.0 | -822.7 | -907.4 | -921.2 | -892.2 | |
| Cash and cash equivalents | -150.2 | -163.8 | -211.9 | -197.5 | -180.9 | -150.2 | -163.8 | -211.9 | -197.5 | -180.9 | |
| Interest-bearing net debt | -246.0 | -272.1 | -410.5 | -431.4 | -397.9 | 818.1 | 746.8 | 631.7 | 605.6 | 706.7 | |
| DEL | 7 x Lease payments for aircraft for the last twelve months |
956.4 | 1,018.1 | 1,047.8 | 1,068.2 | 1,084.7 | |||||
| DEL | Adjusted interest-bearing net debt | 710.3 | 746.0 | 637.3 | 636.7 | 686.8 | 818.1 | 746.8 | 631.7 | 605.6 | 706.7 |
| Equity total | 1,015.7 | 972.6 | 1,050.6 | 1,153.7 | 1,021.7 | 960.0 | 928.7 | 963.5 | 1,056.3 | 918.5 | |
| DEL | Adjusted gearing, % | 69.9 % | 76.7 % | 60.7 % | 55.2 % | 67.2 % | |||||
| NEW | Gearing, % | -24.2 % | -28.0 % | -39.1 % | -37.4 % | -38.9 % | 85.2 % | 80.4 % | 65.6 % | 57.3 % | 76.9 % |
| Reported | Restated | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| in mill. EUR | Q1 2018 |
Q1-Q2 2018 |
Q1-Q3 2018 |
Q1-Q4 2018 |
Q1 2018 |
Q1-Q2 2018 |
Q1-Q3 2018 |
Q1-Q4 2018 |
|
| Cash flow from operating activities | |||||||||
| DEL | Result for the period | 1.6 | 29.3 | 109.8 | 150.7 | ||||
| NEW | Result before taxes | 16.8 | -2.6 | 85.2 | 127.2 | ||||
| Depreciation and impairment | 35.6 | 71.2 | 108.7 | 151.1 | 72.0 | 143.4 | 216.6 | 294.2 | |
| DEL | Other adjustments to result for the period | ||||||||
| NEW | Items affecting comparability | -2.3 | 6.0 | 8.7 | -37.9 | ||||
| Financial income and expenses | 4.1 | 9.3 | 14.4 | 18.9 | 0.1 | 70.2 | 98.0 | 129.0 | |
| DEL | Income taxes | 0.4 | 7.3 | 27.5 | 37.9 | ||||
| DEL | EBITDA | 41.6 | 117.1 | 260.4 | 358.6 | ||||
| NEW | Comparable EBITDA | 86.5 | 217.1 | 408.5 | 512.6 | ||||
| DEL | Sales gains and losses on aircraft and other transactions | -0.2 | -0.1 | 0.5 | -42.7 | ||||
| Non-cash transactions * | -0.1 | 18.9 | 30.2 | 25.7 | 3.5 | 16.2 | 25.0 | 20.5 | |
| Changes in working capital | 40.5 | 149.1 | 65.1 | 50.0 | 40.3 | 149.2 | 66.5 | 50.4 | |
| Financial expenses paid, net | -3.8 | -4.0 | -10.6 | -8.4 | -22.3 | -41.4 | -64.7 | -79.9 | |
| Net cash flow from operating activities | 78.0 | 281.2 | 345.6 | 383.1 | 108.0 | 341.1 | 435.3 | 503.6 | |
| Cash flow from investing activities | |||||||||
| DEL | Investments in intangible assets | -2.4 | -4.7 | -7.2 | -9.8 | ||||
| DEL | Investments in tangible assets | -63.3 | -119.9 | -158.5 | -317.3 | ||||
| NEW | Investments in fleet | -60.8 | -115.0 | -153.3 | -309.7 | ||||
| NEW | Investments in other fixed assets | -7.5 | -14.0 | -19.0 | -26.0 | ||||
| DEL | Investments in group shares | 0.1 | 0.1 | 0.1 | 0.1 | ||||
| DEL | Divestments of fixed assets and group shares | 1.9 | 43.6 | 100.0 | 214.1 | ||||
| NEW | Divestments of fixed assets | 1.9 | 43.6 | 100.0 | 213.8 | ||||
| Net change in financial assets maturing | |||||||||
| after more than three months | 9.9 | -6.1 | -79.6 | -81.8 | 9.9 | -6.1 | -79.6 | -81.8 | |
| DEL | Change in non-current receivables | 0.0 | 0.3 | 0.8 | 0.8 | ||||
| NEW | Change in other non-current assets | 0.1 | 0.4 | 0.8 | 1.2 | ||||
| Net cash flow from investing activities | -53.9 | -86.7 | -144.5 | -194.0 | -56.5 | -91.1 | -151.1 | -202.6 | |
| Cash flow from financing activities | |||||||||
| Loan repayments and changes | -10.0 | -24.3 | -104.5 | -119.4 | -8.2 | -21.1 | -99.4 | -112.5 | |
| NEW | Repayments of lease liabilities | -29.1 | -58.7 | -88.2 | -118.9 | ||||
| Hybrid bond interests and expenses | -15.8 | -15.8 | |||||||
| Purchase of own shares | -3.7 | -3.7 | |||||||
| Dividends paid | -38.4 | -38.4 | -38.4 | -38.4 | -38.4 | -38.4 | |||
| Net cash flow from financing activities | -10.0 | -62.7 | -142.9 | -177.3 | -37.3 | -118.2 | -226.0 | -289.2 | |
| Change in cash flows | 14.1 | 131.8 | 58.2 | 11.8 | 14.1 | 131.8 | 58.2 | 11.8 | |
| Liquid funds, at beginning | 643.9 | 643.9 | 643.9 | 643.9 | 643.9 | 643.9 | 643.9 | 643.9 | |
| Change in cash flows | 14.1 | 131.8 | 58.2 | 11.8 | 14.1 | 131.8 | 58.2 | 11.8 | |
| Liquid funds, at end ** | 658.1 | 775.7 | 702.2 | 655.8 | 658.1 | 775.7 | 702.2 | 655.8 | |
| Notes to consolidated cash flow statement | |||||||||
| * Non-cash transactions | |||||||||
| Employee benefits | 3.6 | 7.2 | 10.9 | 3.0 | 3.6 | 7.2 | 10.9 | 3.0 | |
| Change in provisions | -3.9 | 10.7 | 16.9 | 24.9 | 0.0 | 10.8 | 16.0 | 20.6 | |
| Other adjustments | 0.3 | 1.0 | 2.4 | -2.1 | -0.1 | -1.7 | -1.9 | -3.1 | |
| Total | -0.1 | 18.9 | 30.2 | 25.7 | 3.5 | 16.2 | 25.0 | 20.5 | |
| ** Liquid funds | |||||||||
| Other financial assets | 822.7 | 907.4 | 921.2 | 892.2 | 822.7 | 907.4 | 921.2 | 892.2 | |
| Cash and cash equivalents | 163.8 | 211.9 | 197.5 | 180.9 | 163.8 | 211.9 | 197.5 | 180.9 | |
| Cash funds | 986.5 | 1,119.3 | 1,118.7 | 1,073.1 | 986.5 | 1,119.3 | 1,118.7 | 1,073.1 | |
| Maturing after more than three months | -328.5 | -343.6 | -416.5 | -417.3 | -328.5 | -343.6 | -416.5 | -417.3 | |
| Liquid funds | 658.1 | 775.7 | 702.2 | 655.8 | 658.1 | 775.7 | 702.2 | 655.8 |
| Reported | Restated | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| in mill. EUR | Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
|
| Cash flow from operating activities | |||||||||
| DEL | Result for the period | 1.6 | 27.8 | 80.5 | 40.8 | ||||
| NEW | Result before taxes | 16.8 | -19.4 | 87.7 | 42.0 | ||||
| Depreciation and impairment | 35.6 | 35.6 | 37.5 | 42.4 | 72.0 | 71.5 | 73.2 | 77.5 | |
| DEL | Other adjustments to result for the period | ||||||||
| NEW | Items affecting comparability | -2.3 | 8.3 | 2.7 | -46.6 | ||||
| Financial income and expenses | 4.1 | 5.2 | 5.1 | 4.5 | 0.1 | 70.1 | 27.7 | 31.1 | |
| DEL | Income taxes | 0.4 | 6.9 | 20.1 | 10.5 | ||||
| DEL | EBITDA | 41.6 | 75.5 | 143.2 | 98.2 | ||||
| NEW | Comparable EBITDA | 86.5 | 130.6 | 191.4 | 104.1 | ||||
| DEL | Sales gains and losses on aircraft and other transactions | -0.2 | 0.2 | 0.6 | -43.2 | ||||
| Non-cash transactions * | -0.1 | 19.0 | 11.3 | -4.5 | 3.5 | 12.8 | 8.8 | -4.5 | |
| Changes in working capital | 40.5 | 108.7 | -84.0 | -15.1 | 40.3 | 108.9 | -82.7 | -16.1 | |
| Financial expenses paid, net | -3.8 | -0.2 | -6.6 | 2.2 | -22.3 | -19.1 | -23.2 | -15.2 | |
| Net cash flow from operating activities | 78.0 | 203.2 | 64.4 | 37.5 | 108.0 | 233.1 | 94.3 | 68.3 | |
| Cash flow from investing activities | |||||||||
| DEL | Investments in intangible assets | -2.4 | -2.3 | -2.5 | -2.7 | ||||
| DEL | Investments in tangible assets | -63.3 | -56.6 | -38.6 | -158.8 | ||||
| NEW | Investments in fleet | -60.8 | -54.2 | -38.3 | -156.3 | ||||
| NEW | Investments in other fixed assets | -7.5 | -6.5 | -5.0 | -7.0 | ||||
| DEL | Investments in group shares | 0.1 | |||||||
| DEL | Divestments of fixed assets and group shares | 1.9 | 41.7 | 56.4 | 114.2 | ||||
| NEW | Divestments of fixed assets | 1.9 | 41.7 | 56.4 | 113.8 | ||||
| Net change in financial assets maturing | |||||||||
| after more than three months | 9.9 | -16.0 | -73.4 | -2.3 | 9.9 | -16.0 | -73.4 | -2.3 | |
| DEL | Change in non-current receivables | 0.0 | 0.3 | 0.4 | 0.0 | ||||
| NEW | Change in other non-current assets | 0.1 | 0.3 | 0.4 | 0.4 | ||||
| Net cash flow from investing activities | -53.9 | -32.8 | -57.8 | -49.5 | -56.5 | -34.6 | -60.0 | -51.5 | |
| Cash flow from financing activities | |||||||||
| Loan repayments and changes | -10.0 | -14.3 | -80.1 | -14.9 | -8.2 | -12.9 | -78.3 | -13.1 | |
| NEW | Repayments of lease liabilities | -29.1 | -29.6 | -29.5 | -30.7 | ||||
| Hybrid bond interests and expenses | -15.8 | -15.8 | |||||||
| Purchase of own shares | -3.7 | -3.7 | |||||||
| Dividends paid | -38.4 | -38.4 | |||||||
| Net cash flow from financing activities | -10.0 | -52.7 | -80.1 | -34.4 | -37.3 | -80.8 | -107.8 | -63.2 | |
| Change in cash flows | 14.1 | 117.7 | -73.5 | -46.4 | 14.1 | 117.7 | -73.5 | -46.4 | |
| Liquid funds, at beginning | 643.9 | 658.1 | 775.7 | 702.2 | 643.9 | 658.1 | 775.7 | 702.2 | |
| Change in cash flows | 14.1 | 117.7 | -73.5 | -46.4 | 14.1 | 117.7 | -73.5 | -46.4 | |
| Liquid funds, at end ** | 658.1 | 775.7 | 702.2 | 655.8 | 658.1 | 775.7 | 702.2 | 655.8 | |
| Notes to consolidated cash flow statement | |||||||||
| * Non-cash transactions | |||||||||
| Employee benefits | 3.6 | 3.6 | 3.7 | -7.9 | 3.6 | 3.6 | 3.7 | -7.9 | |
| Change in provisions | -3.9 | 14.6 | 6.2 | 7.9 | 0.0 | 10.7 | 5.3 | 4.6 | |
| Other adjustments | 0.3 | 0.8 | 1.3 | -4.5 | -0.1 | -1.6 | -0.2 | -1.2 | |
| Total | -0.1 | 19.0 | 11.3 | -4.5 | 3.5 | 12.8 | 8.8 | -4.5 | |
| ** Liquid funds | |||||||||
| Other financial assets | 822.7 | 907.4 | 921.2 | 892.2 | 822.7 | 907.4 | 921.2 | 892.2 | |
| Cash and cash equivalents | 163.8 | 211.9 | 197.5 | 180.9 | 163.8 | 211.9 | 197.5 | 180.9 | |
| Cash funds | 986.5 | 1,119.3 | 1,118.7 | 1,073.1 | 986.5 | 1,119.3 | 1,118.7 | 1,073.1 | |
| Maturing after more than three months | -328.5 | -343.6 | -416.5 | -417.3 | -328.5 | -343.6 | -416.5 | -417.3 | |
| Liquid funds | 658.1 | 775.7 | 702.2 | 655.8 | 658.1 | 775.7 | 702.2 | 655.8 |
| Alternative performance |
Reference to reason to use the | ||
|---|---|---|---|
| measures | Calculation | measure | Reference to reconciliation |
| Items affecting comparability |
Unrealized changes in foreign currencies of fleet overhaul provisions + Fair value changes of derivatives where hedge accounting is not applied + Sales gains and losses on aircraft and other transactions + Restructuring costs |
Note 1. Basics of preparation, Note 7. Items affecting comparability |
Note 7. Items affecting comparability |
| Comparable operating result |
Operating result - Items affecting comparability |
Note 1. Basics of preparation | Income statement, Note 7. Items affecting comparability |
| Comparable EBITDA | Comparable operating result + Depreciation and impairment |
Note 1. Basics of preparation | Income statement |
| Adjusted interest bearing liabilities |
Other interest-bearing liabilities + Cross currency interest rate swaps in derivative financial instruments |
Component used in calculating gearing |
Additional information to Balance Sheet: Interest-bearing net debt and gearing |
| Cash funds | Cash and cash equivalents + Other financial assets |
Component used in calculating gearing. Liquid funds represent the total amount of financial assets that are available for use within short notice. Therefore, liquid funds provide the true and fair view of the Group's financial position. |
Additional information to Balance Sheet: Interest-bearing net debt and gearing, Notes to consolidated cash flow statement |
| Interest-bearing net debt |
Adjusted interest-bearing liabilities - Cash funds |
Note 1. Basics of preparation | Additional information to Balance Sheet: Interest-bearing net debt and gearing |
| Gearing, % | Interest-bearing net debt / Equity x 100 |
Note 1. Basics of preparation | Additional information to Balance Sheet: Interest-bearing net debt and gearing |
| Other key ratios - Revenue and profitability | |
|---|---|
| Earnings per share (EPS) |
(Result for the period - Hybrid bond expenses net of tax) / Average number of outstanding shares during the period |
| Unit revenue per available seat kilometre (RASK) |
Unit revenue (RASK) represents the Group's revenue divided by available seat kilometres (ASK). Unit revenue (RASK) with constant currency aims to provide a comparative, currency neutral measurement for unit revenues. All the currency changes and currency hedging results are excluded from the measurement. |
| Unit revenue per revenue passenger kilometre (yield) |
Passenger Revenue by product divided by Revenue passenger kilometres (RPK). |
| Unit cost per available seat kilometre (CASK) |
Unit cost (CASK) represents the Group's operational costs divided by available seat kilometres. Other operating income is deducted from operational costs. Unit cost (CASK) with constant currency aims to provide a comparative, currency neutral measurement for unit costs. All the currency changes and currency hedging results are excluded from the measurement. |
| EBITDA | Operating result + Depreciation and impairment |
| Other key ratios - Capital structure | |
|---|---|
| Equity ratio, % | Equity + Equity and liabilities total x 100 |
| Gross capital expenditure |
Investments in intangible and tangible assets excluding advance payments |
| Return on capital employed (ROCE) |
(Result before taxes + Financial expenses) / (Equity + Other interest-bearing liabilities, average of reporting period and comparison period) |
| Other key ratios - Growth and traffic | |||||
|---|---|---|---|---|---|
| Available seat kilometres (ASK) |
Total number of seats available × kilometres flown | ||||
| Revenue passenger kilometres (RPK) |
Number of revenue passengers × kilometres flown | ||||
| Passenger load factor (PLF) |
Share of revenue passenger kilometres of available seat kilometres |
The figures of the Interim Report are unaudited.
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