Finnair’s half year results announcement today showed that the airline has been losing around two million euros per day ($2.32 million). Despite this, the airline has taken a firm stance on paying back its customers for canceled flights, refunding a total of €270 million ($313 million) between February and June.
Three years’ worth of refund requests
Finnair has been working hard to refund passengers whose flights have been affected by COVID. Between February and June this year, the airline paid back more than €270 million ($313 million) in refunds for canceled flights.
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While this is impressive, the airline says its job is not done yet. Around two-thirds of the received refund requests have been paid out, and Finnair estimates it will still need to pay around €100 million ($116 million) more before everyone is reimbursed. CEO Topi Manner explained the severity of the situation in a statement sent to Simple Flying, saying,
“In four months, we have received as many refund requests as we normally get in three years.”
Finnair notes that this has been an exceptional situation and that there have been some delays in handling customer refunds. However, it says it is doing everything within its power to minimize these delays, and that additional personnel have been employed to assist in processing refunds. The airline has even developed robots to speed up the process. Manner continued,
“I want to apologise to our customers for the delays and thank them sincerely for their patience. We will ensure that all customers get their refunds as soon as possible.”
Glimmers of hope
The impact of COVID on Finnair’s first half results cannot be avoided. At one point, the airline was operating just three percent of its usual capacity, maintaining only critical flights. This was reflected in the low passenger numbers and available seat kilometers, both of which were down more than 97% on last year’s results.
Revenue decreased 91.3% in the second quarter, and the airline lost a post-tax total of €172.1 million ($199.6 million). Finnair finished the half year with a loss of €314.6 million ($365 million). Despite this, Manner stated that the period also contained “many glimmers of hope.”
Finnair has been incredibly proactive in stepping up cargo operations to mitigate the impact of COVID, and throughout the second quarter, its cargo only flight operations remained strong. The airline flew more than 600 flights for cargo over the three months, mostly between Asia and Finland, and cargo accounted for more than 70% of its quarterly revenue.
Looking forward, Finnair is making some positive steps to ramp operations back up again. In July, around 25% of its usual flights will be operated, increasing to a target to 50% by September. In July and August, the airline has scheduled around 70 – 80 daily flights across its European and Asian network.
However, despite this, Finnair acknowledges the expenses involved in a restart of operations. As such, it warns that losses for the third quarter will likely be comparable to those presented today.
