As it posted another steep quarterly operating loss, EUR149.1 million euros (USD180.1 million) for the first quarter of 2021, Finnair (AY, Helsinki Vantaa) said it had raised its permanent cost-savings target by a further EUR30 million (USD36 million) to EUR170 million (USD205 million), the third time it has done so.

The loss compared to a EUR95.6 million (USD115.5 million) operating loss for the same quarter in 2020. However, cargo sales rose by two thirds to EUR60.9 million (USD73.5 million), accounting for over 50% of the company’s revenue. Cargo revenue in March was “record high,” exacerbated by the Suez Canal blockage, the airline said in a statement on April 27.

Finnair has “made good progress” in its efforts to cut costs and will reach its previous cost-savings target ahead of schedule, it said, adding that it had also identified “new savings opportunities.”

Despite the updated target, further reductions are still sought in all cost categories, it explained, including leasing, real estate, IT, and sales and distribution and administration. It will continue streamlining its operations and the digitalisation of its customer processes, and “additionally it will remain focused on renegotiating its supplier and partner agreements.”

Finnair’s original permanent cost-savings target, announced on May 20 last year, was around EUR80 million (USD96.6 million), less than half the new target.

Chief executive Topi Manner said he was optimistic that “demand will gradually recover starting from late summer driven by improved vaccination coverage and the expected easing of travel restrictions. The EU Digital Green Certificate, which is planned to be launched by the end of June, will play an important role in the return of free movement within the EU.”

Finnair expects to operate to over 60 destinations during the summer, he added, “and we will be modifying our traffic programme based on demand during the summer.”

Due to the continued strict travel restrictions, the airline anticipates that the operating loss in the second quarter “will be of a similar magnitude as in the four previous quarters” and advance bookings made in the first quarter amounted to EUR51.8 million (USD62.5 million), which represents only 15% of bookings made in the same period last year.

“While gradual recovery of demand is expected in Q3 2021, the visibility is weak, and there are several scenarios of the timing of the recovery and, thus, the company will not provide guidance on full-year revenue,” it said.

In a separate statement on April 26, Finnair said that it would resume flights to Bodø, Lisbon, Nice, Reykjavik Keflavik, and Vilnius in June and operate additional frequencies to Chania, Rhodes, and Santorini in Greece and Alicante, Malaga, and Palma de Mallorca in Spain. In North America, it will restart flights to Chicago O'Hare and Los Angeles Int'l in mid-June - subject to the development of United States travel guidelines - and increase frequencies to New York JFK to up to 3x weekly.