Finnair: Quite the party – could be quite a hangover

研报英文原文证据摘录

Finnair: Quite the party – could be quite a hangover

Barclays | Finnair

the current forward curve, which implies a €51m increase in our forecast FY26 fuel bill and a

€76m increase in our forecast FY27 fuel bill. In 2Q Finnair had nearly flat unit fuel costs due to

strong fuel hedges, but we don not find this sustainable, notwithstanding its 76% fuel hedging

in 2H. We would expect market fuel prices to ease in the event of a further ceasefire, but equally

such a scenario would likely cause Asia unit revenues to fall faster. Meanwhile non fuel costs

have also increased apace in 2Q, up mid-single digits. Some of this increase will relate to higher

profit sharing provisioning as a result of the profit windfall, but other costs relate to Finnair's

growth investment that look likely to continue.

Impressive developments on fleet and distribution: We are encouraged that Finnair has

sourced a block of six commonly configured used A320 CEOs that it says can be configured as

Finnair aircraft with limited expense. We have liked the fleet plan to leverage modern E2

regional jets combined with used narrow bodies that can offer good reliability and moderate

maintenance costs thanks to the use of legacy engines. We are also impressed by the very

strong performance of ancillary revenues, which looks to be a consequence of Finnair leading

the industry in embracing modern airline retailing.

Network worries: We maintain our concerns over Finnair's network development. The

challenges of the Gulf carriers through the Iran war have boosted Finnair's Asian profitability,

but we do not expect this to become a permanent reality. We think the Gulf carriers are back in

the sky and Asian trading will become more challenging. Therefore, we are concerned about