Finnair has narrowed capacity growth forecast for 2016-17, blaming disruption to Airbus A350 deliveries that are an average of two months behind schedule.
“Finnair’s new estimate of capacity growth is approximately 7%, while the previous estimate was a growth of 8% compared to 2015. The revision is due to delays in the deliveries of A350 aircraft,” Helsinki-based Finnair said in its second-quarter earnings release.
The airline, which was the European launch customer for the twinjet, has 19 A350s on order. Three of these were delivered in 2015, followed by a further three in the first half of 2016, taking it to six in total.
“We have felt quite a lot of pain from the A350 delivery delays,” Finnair CEO Pekka Vauramo said, speaking on the second-quarter earnings call. “At this point, deliveries are delayed by an average of two months, but there has been variation and that is the difficult part because of crew rostering. We have been forced to take wet leases, increasing costs, but we would rather fly the flights that we’ve sold than cancel them. We have had some cancellations, but there are very few at the moment.”
Vauramo said the situation has “contributed negatively” to the airline’s revenue growth, a problem further compounded by “revenue softness” in Europe. “What has been equally disturbing is that it’s also affected our crew training and the release of our A340s,” he said.
According to the current delivery schedule, Finnair will have seven A350s by the end of 2016, 11 by the end of 2017 and 19 by the end of 2023.
On the flip side, Vauramo said: “The fuel efficiency of the A350 is starting to be visible in our fuel consumption figures. That is good news.” The airline has also had excellent customer feedback on the A350 and a “steady improvement” in customer satisfaction on its A330s and A340s.
As part of its product improvement strategy Finnair is outfitting its entire long-haul fleet with Wi-Fi connectivity, which should be completed in 2017. “We now have a firm schedule. We have started installations and we will have all those aircraft done next year,” Vauramo said.
By 2017, Finnair plans to phase out its A340s, selling four back to Airbus in 2016 and 2017. At the end of June 2016, Finnair operated 48 aircraft, comprising 18 widebodies and 30 narrowbodies.
“In terms of individual carriers, we wouldn’t make any comment, but the delivery sequence is agreed well in advance with the customer,” an Airbus spokesman toldATW. “We have a target of at least 50 deliveries this year and we are maintaining that target.”
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