1

2

24.4.2019

Topi Manner

A seasonally weak first quarter

• Uncertainty in the global economy affected the market conditions

• Easter moved from Q1 to Q2

• Japanese and North-American routes performing well

• In China, the year started slowly

• Competition remains tight in Europe

• Overcapacity in the package holiday market

• Fuel costs have increased during Q1, including hedges

3

Growth in passenger demand varied between areas

Capacity

+10.4%

13th A350

Aircraft

4

Revenue increased by 5 per cent year-on-year and number of passengers reached a new Q1 record

Revenue

+5.0%

Operational

cost

+8.9%

Comparable

operating result

-16.2 M€(14.6 M€)

NPS

37*

NPS = Net Promoter Score

*New Customer satisfaction survey was launched in beginning of January 2019. In the new survey NPS is calculated based on

responses from all customers starting from beginning of 2019, including Finnair Plus and non-members. In 2018 NPS was calculated

based on responses from Finnair Plus members only and therefore these results are not comparable. In Q1 2018 NPS was 43.

Revenue by product

5

Strong Japanese market supported passenger and cargo demand

5

4139

Q1 2018

490

4771

673

41

517

68

Q1 2019

641

5.0%

Passenger revenue

Travel services

Ancillary

Cargo

+5.5%

+3.9%

+16.8%

-4.9%

• The growth in passenger traffic was driven by Japan

and supported the North Atlantic

• Ancillary sales grew most on European and

domestic routes

• Cargo growth was supported by good demand on

the routes between Japan and the Nordic countries

and rather weak comparison period due to the ramp

up phase of the new Cargo terminal

• Market overcapacity weakened travel service

revenue growth

Passenger Load Factor by area, %

➢ Passenger load factor 78,3%

➢ Comparison period historically high

➢ In long haul traffic performance between routes varied

6

Traffic between Asia and Europe is the foundation of Finnair’s revenue growth

➢ Traffic from Asia to Europe remains the source of the majority of

Finnair’s passenger revenue

89

8178

65

8383 8175

61

78

Asia Atlantic Europe Domestic Total

Q1 2018 Q1 2019

Q1/2019

2.2

EuropeQ1/2018 Asia Unallo-

cated

2.4

490.2

Atlantic

10.8

517.2

12.8

Domestic

-1.3

+5.5%

Passenger revenue Q1/18 vs Q1/19

Q1/2019 Change

Fuel costs 145.2 +14.0 %

Staff costs 129.7 +5.2 %

Passenger and handling services 127.5 +6.5 %

Depreciation and impairment 75.9 +5.5 %

Traffic charges 72.1 +10.8 %

Aircraft materials and overhaul 46.3 +21.1 %

Sales, marketing and distribution costs 41.6 +2.1 %

Property, IT and other expenses 33.3 +5.5 %

Capacity rents 32.1 +13.9 %

Operating costs (€703.7 million in total +8.9%)

7

Operating costs increased slower than capacity

• Capacity growth 10.4%

• Operating costs 8.9%

• Operating costs excluding fuel 7.6%

21%

18%

18%

11%

10%

7%

6%

5%5%

Fuel costs

Staff costs

Passenger and handling services

Depreciation and impairment

Traffic charges

Aircraft materials and overhaul

Sales, marketing and distributioncostsProperty, IT and other expenses

Capacity rents

The new more transparent cost structure

We are constantly renewing us

8

Customer experience

• New menu

• New Marimekko-textiles

ja Amenity kits

• WiFi instalments

• ATR- aircraft renewal

Responsibility

• 13th A350 aircraft

• Push for change

• Carbon offsetting

projects

• Reduce the use of

plastic

People experience

• 170 new employees and

some 280 summer workers

• Continuous development

of new ways of working:

Agile and Lean culture

• Developing occupational

safety and well-being at

work

Digitalization

• Aurinkomatkat Own

Vacation -App

• Finnair.com renewal

• 2.5 million customers /

month using our digital

channels

• AIG's insurance products

on Finnair's website

Our target: sustainable, profitable growth

9

Sustainable

• We will continue to focus

on sustainability by

updating our strategy

• Push for change

expansion

Growth

New destinations and more

frequencies

• Sapporo, Hong Kong and

Osaka, Tokio and

Guangzhou

• Punta Cana

• Hanover, Bologna,

Bordeaux, Porto,

Trondheim and Tromso

Profitable

• Yield mix

• Continuous

improvement of

productivity

• Capital efficiency

Two new EB members starting from 1.5.

• Ole Orvér, Chief Commercial Officer (CCO)

• Nicklas Ilebrand as SVP Strategy

Outlook

Global airline traffic is expected to continue growing in 2019.

Finnair expects increased competition as capacity is added,

particularly on routes linking Europe with Asia as well as in

short-haul traffic. The slowdown in the economy of Finnair´s key

markets and the continued uncertainties surrounding global

trade, including from Brexit, could impact the demand for air

travel and cargo.

Finnair plans to increase its capacity by approximately 10 per

cent in 2019, down from its 14.8 per cent capacity growth in

2018. This growth is mainly focused on the Asian market.

Revenue is expected to grow at a somewhat slower pace than

capacity in 2019.

In line with its disclosure policy, Finnair will issue guidance on

its full-year comparable operating result as part of its half-year

report in July.

10

12

Finance

Pekka Vähähyyppä

13

Capacity growth driving revenue growth

Passenger revenue Q1/2018 vs Q1/2019, Meur

• Strong capacity growth drove passenger revenue growth

• Demand growth was insufficient compared to capacity growth,

which had a negative impact on the passenger revenue

development compared to last year

ASK

-4.9

Q1 PY

56.1-26.4

PLF (load)

2.2

FX Yield,

mix,

other

Q1

490.2

517.2

+26.9

Q1 PY

6.8

47.4

-3.5

39.1

1.5

71.2

40.5

155.7

Travel servicesCargoAncillary

40.7

67.7

Q1

150.9

+4.9

Ancillary

Cargo

Travel services

Other revenue Q1/2018 vs Q1/2019, Meur

• In other revenue areas, cargo development was strong, rising

by almost EUR 7 million vs. last year

➢ Although in general cargo market growth have shown

some signs of slowing down

• Operating expenses excluding fuel +7.6% (ASKs +10.4%)

• Fuel costs including hedging results cost increased +14.0%

• Unit cost (CASK) -0.4%, CASK ex fuel at constant currency -2.8%

14

Fuel costs rose faster than capacity growth, weakening comparable EBIT

Cargo 6.8

-8.1

Revenue Mainte-

nance

-3.9

-6.4

-7.0

Traffic

charges

14.6

Rents Passenger

services

Fuel

-17.8

-4.0

-7.7

Other (NET) Q1 EBITStaff

-16.2

Depreciation

-7.7

Travel services-3.5

Ancillary1.5

Q1 2018

Passenger revenue 26.9

31.8

-30.8 M€

Q1/18 hedging gain 9.2 M€

Q1/19 hedging gain 8.0 M€

15

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Hedging ratios 2019: 71 %

H1: 76 %

H2: 69 %

Fuel costs Q1/18 vs. Q1/19 Fuel hedges 31 March 2019

Changes in EUR/USD and volume growth impacted fuel costs

16

Development of unit revenue and unit cost

6.466.48

CASK developmentRASK development

• Unit cost (CASK) decreased by 0.4%. Unit cost at constant

currency excluding fuel decreased by 2.8%.

(Q1/2019 vs Q1/2018)

• Unit revenue (RASK) decreased by 4.9%. Unit revenue at

constant currency decreased by 5.3%.

(Q1/2019 vs Q1/2018)

5.164.79 4.56 4.88 5.10

1.321.36

1.411.39

1.36

0

1

2

3

4

5

6

7

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

CASK ex fuel Fuel

6.15 5.97 6.27

6.63 6.70 7.006.53 6.31

0

1

2

3

4

5

6

7

8

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

171) HFS = Held-for-Sale. 2) I-B = Interest-bearing

Healthy balance sheet supports future investments

• Equity ratio 22.2% (23.4%)

• Gearing 75.9% (80.4%)

2 103

11

351

508

445

2 155

17

133

31.3.2018

929

987

1 709

378

1 073 1 746

337

31.12.2018

1 062

461

321

2 208

31.3.2019

603

661

143

899

31.3.2019

673

918

31.12.2018

1 774

675

3 944

117

31.3.2018

524

4 052 4 0523 944

3 9653 965

Assets HFS

Cash

Provisions

Fleet

Other assets

Other fixed assets

Liabilities HFS

I-B debt

Tickets

Other liabilities

Equity

Cash flow investments for the financial year

2019 relate mainly to fleet and are

expected to total approximately 440 million

euros, including advance payments.

Operating cash flow positive during Q1

18

564

181

31.12.2018

417

133

365

1,062

475

656697

31.3.2019

1,073

Cash funds-11.2 M€

Commercial paper, deposits and funds > 3 months

Commercial paper, deposits and funds < 3 months

Cash and bank deposits

Liquid funds in cash flow

-36.6

655.8

2018

59.7

Comparable

EBITDA

Purchase

of own

shares

Loan

payments

56.6

Other

-0.5

Investments

696.7

-25.5

Working

capital

Other

-126.8

114.1

Cash

Q1

Operating+148.3mEUR

Cash flow+40.9mEUR

Investing-70.2mEUR

Finance-37.1mEUR

THANK

YOU

Contact us:

Finnair IR / financial

communications

mari.reponen@finnair.com

kasper.joukama@finnair.com

20

Appendix

Income statement

in mill. EUR Q1 2019 Q1 2018 Change % 2018 LTM

Revenue 672.9 641.1 5.0 2 849.7 2 881.5

Other operating income 14.6 19.8 -26.1 73.7 68.6

Operating expenses

Staff costs -129.7 -123.3 5.2 -499.6 -506.0

Fuel costs -145.2 -127.4 14.0 -581.0 -598.8

Capacity rents -32.1 -28.2 13.9 -122.4 -126.3

Aircraft materials and overhaul -46.3 -38.2 21.1 -162.9 -171.0

Traffic charges -72.1 -65.1 10.8 -300.8 -307.9

Sales, marketing and distribution costs -41.6 -40.8 2.1 -159.0 -159.8

Passenger and handling services -127.5 -119.7 6.5 -453.9 -461.6

Property, IT and other expenses -33.3 -31.6 5.5 -131.3 -133.0

Comparable EBITDA 59.7 86.5 -31.0 512.6 485.7

Depreciation and impairment -75.9 -72.0 5.5 -294.2 -298.1

Comparable operating result -16.2 14.6 218.4 187.6

21

Hedging currencies and sensitivities 31 March 2019

Fuel sensitivities10% change

without hedging

10% change. taking

hedging into account

Hedging ratio

(rolling 12 months from date of financial statements) H1/2019 H2/2019

Fuel EUR 67 million EUR 29 million 76% 69%

Currency distribution

%

1-3

2019

1-3

20182018

Currency sensitivities

USD and JPY

(rolling 12 months from date of financial statements for

operational cash flows)

Hedging ratio for

operational cash flows

(rolling next 12

months)

Sales currencies 10% change without hedging10% change. taking

hedging into account

EUR 59 63 55 - -

USD*3 2 4

see below see below see below

JPY8 6 10

EUR 33m EUR 14m 67%

CNY 5 5 7 - -

KRW3 2 3

- -

SEK4 5 3

- -

Other18 17 17

- -

Purchase currencies

EUR59 63 61

- -

USD*33 29 32

EUR 83m EUR 35m 63%

Other8 8 7

22 * Hedging ratio for USD-basket, which consists of USD- and HKD net cash flows. The sensitivity analysis assumes that the Hong Kong dollar continues to correlate

strongly with the US dollar.