Key Points:

  • Finnair has fully repaid its 400 million euro government loan taken during the COVID-19 pandemic, including nearly 50 million euros in interest.

  • The Finnish airline, majorly owned by the state, has rebounded with four consecutive profitable quarters since the gradual easing of pandemic restrictions.

  • Despite challenges from the closure of Russian airspace, Finnair continues to expand its destinations in Japan, with Nagoya being the latest addition in May 2024.

Finnair's Financial Recovery Post-Pandemic

HELSINKI — Finnair, the national airline of Finland, marked a significant financial milestone by repaying the remaining portion of a government loan obtained during the COVID-19 crisis. This final payment, made on Friday, included interest, successfully closing the chapter on the 400 million euros borrowed from the state treasury to weather the pandemic. The carrier has demonstrated a strong financial rebound, achieving profitability for four consecutive quarters.

Like many global airlines, Finnair faced severe operational disruptions during the pandemic. The airline operates under a hybrid structure, being publicly listed but with the Finnish government as its major shareholder, holding 55.8 percent. This ownership arrangement led to the government’s decision to financially support Finnair during its period of duress.

Navigating Challenges and Expanding Routes

As the impact of COVID-19 receded from 2022, Finnair gradually repaid the loan, culminating in the final installment of 81.4 million euros. Along with the principal amount, the airline has also paid close to fifty million euros in interest. Despite overcoming the pandemic-related hurdles, Finnair faced another challenge with the closure of Russian airspace due to the conflict in Ukraine from February 2022. This closure affected Finnair's preferred routes to Japan and other Northeast Asian destinations that typically flew over northern Russia.

Finnair adapted by rerouting its Japan-bound flights either via the North Pole and Alaska or through a southern path involving the Middle East, India, and China. Despite these longer routes, the airline has successfully maintained passenger volumes. Currently, Finnair serves three destinations in Japan—Tokyo Haneda, Tokyo Narita, and Osaka—and plans to reintroduce flights to Nagoya in May 2024, reestablishing a connection that existed in the past.
Financial Uptick and Future Prospects

Finnair’s recent financial reports indicate a positive trajectory for the airline. In the latest three-month period from July to September 2023, Finnair reported a net profit of 53 million euros, marking the fourth consecutive profitable quarter. This sustained profitability reflects the airline's resilience and strategic adaptability in the face of global challenges. Finnair's successful repayment of its government loan and continued expansion, especially in key markets like Japan, highlight its strong recovery and promising outlook for the future.