Finnair, Air Canada and APAC airlines – or read as: The lonely, a blip and a fair few others having pilot problems.

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By admin February 13, 2015 21:02

Finnair, Air Canada and APAC airlines – or read as: The lonely, a blip and a fair few others having pilot problems.

TransAsia has highlighted the significant APAC pilot training problem that we were all aware of. Ten TransAsia pilots have failed the mandatory skills test and a further 19 just did not show up. TransAsia has lost 29 pilots this week thus far and it is certain that if these tests were extended beyond Taiwan then there would be a great many more failures leading to a very large pilot shortage and further upward pressure on pilot salaries. So are some APAC low cost carriers in particular going to see cost base increases and therefore are some listed airlines overvalued at the moment? Only time will tell.

Over in the Americas, Air Canada shares have been all over the place over the past week with impressive full year figures for 2014 and strong January traffic pushing shares up, only to be pegged back by a dismal Q4 2014. The weak Canadian Dollar should have been more than offset by lower fuel costs but alas the Net loss for the period widened to C$100m ($79.16m), or 35 Canadian cents per share, from C$6m, or 2 Canadian cents, a year earlier. Operating costs rose 9% to C$3bn on the back of higher than anticipated employee benefit expenses for the quarter. In fact operating revenue rose 7.3% to C$3.1bn and load factor was up 0.7 points at 81% so the airline is doing well so long as labour costs can be put under control for H1 2015.

In Europe meanwhile one worries for the future of Finnair. Finnair, despite exceeding its targets for major cost reductions to €217m from the planned €200m and lower fuel costs, still posted a wider net loss year on year of €82.5 million ($93.2 million), from €22.9 million in 2013.Revenue for the period was down 4.8% at €2.28 billion, from €2.4 billion in 2013. Capacity fell 0.9% which explains some of the fall in revenue and also the increase in load factor by 0.7% to 80.2%. The airline blamed a weak home market for the figures and significantly reduced Asian demand for over the pole routes.
However some of the loss was down to exceptional items – not least a €22 million write-down in value following the decision of Flybe to pull out of the Flybe Nordic partnership with Finnair.

Finnair has some upsides in 2015 coming with A350s set to replace A340s and further cost savings should start to flow through the books but all of this does not address the fundamental fact that Finnair is looking a bit cut off and lonely. The airline needs a partner to increase traffic flow or else it will continue to contract as other airlines around it become larger and better connected.

admin
By admin February 13, 2015 21:02