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Omicron knocks Finnair recovery off course

 

 

Finnair’s 2021 revenue was less than 30% of the level achieved in pre-pandemic 2019 as Omicron hit pandemic recovery efforts at the end of the year.

The total of €838.4 million came as the airline reported a “heavy” annual operating loss of almost €470 million.

Cost cuts of €200 million helped reduce the loss and the airline agreed a €400 million government loan early last year which remains undrawn.

Finnair also implemented a $400 million sale and leaseback covering four Airbus A350s and issued a €400 million bond.

The airline’s recovery was hit as the emergence of the Omicron variant of Covid-19 at the end of the last three months of the year triggered the reintroduction of tighter travel curbs impacting air travel demand.

Chief executive Topi Manner said: “Increased Omicron-related sick leaves caused unexpected resourcing issues not only at Finnair but also in our partners’ operations.

“Ramping up flights after a long period of low traffic brought operational challenges, which were further amplified by the unanticipated impacts of the Omicron variant at the end of the year.

“This was reflected in weaker on-time performance and in congestion in our customer service channels when many customers changed their travel dates.”

Manner added: “This year, ensuring high-quality customer service and on-time performance are in special focus for us, as they are integral for Finnair’s recovery from the pandemic.

“Omicron has proven to be milder than the previous variants and as the Omicron wave starts to wane, European countries are removing restrictions. The pandemic is turning into an endemic phase, where Covid-19 is treated as a regular respiratory infection.

“We estimate that, aside from China and Hong Kong, by next summer we will be closer to a normal operating environment, even though the opening of Asia is delayed from our earlier estimate.

“The latter half of 2021 proved that there is great pent-up demand. We are preparing for the increasing demand for summer 2022 by calling employees back from furloughs and the opening of our new long-haul routes to Busan, Dallas, Seattle and Tokyo Haneda.”

He admitted that 2021 was, like its predecessor, a difficult one for Finnair.

“The prolonged pandemic and the rapid changes in our operating environment were wearing for our personnel,” Manner said.

“I believe that 2022 will bring better predictability and joy of achievement to our employees as we take significant steps forward in recovering from the pandemic.”

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