Demand for air services recovering: Finavia
The third quarter confirmed the notion that the industry is slowly recovering from the recession, which had hit it hard.
From Finavia's perspective, the road to the pre-recession level does not seem long, but on the other hand, the loss of revenues due to the price reductions makes the journey longer from the point of profitability. Efficiency measures and improved demand have nevertheless improved the Group's profit more than expected.
Group revenues in January-September dropped by 3.8 per cent to EUR 231.8 million (EUR 241.1 million in the previous year). The operating result excluding non-recurring items fell on the previous year and stood at EUR 27.0 million (25.5). Profit before taxes was EUR 38.3 million. The result includes non-recurring items totalling EUR 16.7 million. Non-recurring items are mainly capital gains from sale of assets. The revaluation of balance sheet items, which was performed at the start of the year, had an impact on the depreciable amount and reduced depreciation and amortisation expenses from the beginning of January to the end of September by EUR 13.2 million. Arrangements have been made in Finavia and its subsidiaries during the summer that affect both the Group structure and the consolidated income statement.
The third quarter of the year was a record quarter for Finland's international air traffic. The solid growth of 8.7% ensured the fact that the nearly 3.4 million passengers recorded during the third quarter was a higher figure than ever before achieved during any quarter. However, the trend in domestic traffic remained negative by -1.6%. The total number of passengers, 4.3 million, was only a fraction smaller than the record level achieved during the third quarter of 2008.
The third quarter marked a distinct turning point in the number of commercial air traffic landings in Finland. The trend in domestic traffic remained negative at -4.6%, but there was considerable growth in the number of international traffic landings, 10.4%. The average size of aircraft expressed as tonnes increased by 3.7%. This is due to the increased share of European traffic where the planes are larger than in domestic traffic.
After four more modest quarters, overflights in Finnish air space showed excellent growth of 5.9% during the third quarter of 2010. The first six months were nevertheless a bit more quiet, which means that the cumulative growth for January-September was only +2.8%.
The demand for air traffic picked up in May, and the trend is expected to remain strong. In particular the passenger numbers in international traffic are clearly better than the expectations at the beginning of the year and also better than could be expected on the basis of the first six months. The impact of the ash crisis in April on people's willingness to travel seems to have remained minor. The current forecasts indicate that the Group will make a clearly positive operating result.