Interim Report1 January – 30 June 2010

Finnair Group

Sector recoveringRecovering fastest in Asia and slowest in EuropeSector profit forecast for current year 2.5 billion dollarsAsh cloud adversely affected European airlines in particular; 30 million euros of direct losses for FinnairPassenger demand returned to growthBusiness travel picked up clearly, except in FinlandCargo demand is growing strongly, particularly in AsiaImproved price level

Finnair’s profitability clearly improvedStrong improvement in demand and average price in second quarter; turnover rose by 10.8% Operational loss 13.6 million euros, loss of 30 mill. euros caused by the ash crisis Cargo clearly profitableEfficiency programme reduced unit costs by 6.4%Unit revenues in scheduled traffic improved by 5.8%Passenger load factor is goodCash flow from operations now positiveBalance sheet and cash position remain strongService quality on a high level

Significant openings into new marketsFinnair and Air Berlin start co-operation as of November• Significant opening into the highest purchasing power

market in Europe• Air Berlin to become oneworld member in 2012

Kingfisher’s membership in oneworld opens up huge Indianmarket for FinnairCooperation between members in North Atlantic trafficapproved by the authoritiesCooperation with Japan Airlines expands to European internal flightsFlybe new partner in feeder traffic, potential for extendedco-operation

Operational result improved

--31,6-37,9mill. euroProfit before tax

-24,2-20,8mill. euroChanges in fair value of derivatives and exchange rates in fleet overhauls

--28,8-33,3mill. euroOperating profit/loss (EBIT)

--4,932,5mill. euroAdjusted EBITDAR*

-

-

2,2

10,8Change %

0,21,1mill. euroOne off items/ capital gains

-53,2-13,6mill. euroAdjusted EBIT* i.e. Operational result

485,1495,8mill. euroOperational expenses

427,4473,5mill. euroTurnoverQ2/09Q2/10

*excl. capital gains, changes in fair value of derivatives and exchange rates in fleet overhaulsand non recurring items

A better profitability trendEBIT* per quarter

*excl. capital gains. fair value changes of derivatives and non recurring items

-60

-40

-20

0

20

40

60

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

MEUR

2006 2007 20082005 2009 2010

-15

-10

-5

0

5

10

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Positive trend in unit revenues and cost development

% Yield (EUR/RTK) Unit costs (EUR/RTK)

2006 2007 20082005 2009

Change YoY

2010

Efficiency program lowered unit costs

1,7%-1,5%c/RTKOther costs*

+25,4%-11,2%c/RTKAircraft lease payments and depreciation

-5,6%+21,6%€/psgr.Sales and marketing

-5,7%+7,5%€/psgr.Ground handling and catering

+2,5%+6,6%c/RTKTraffic charges

-6,4%-14,9%c/RTKFuel costs

-3,1%-10,6%c/RTKPersonnel expenses

+2,4%-3,3%c/RTKUnit costs of flight operations* excl. fuel

-0,1%-6,4%c/RTKUnit costs of flight operations*

Q2/09Q2/10

* excluding fair value changes of derivatives and non-recurring itemsRTK = Revenue Tonne Kilometre

Improved productivity

0

2000

4000

6000

8000

10000

12000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q22010

Personnel on averagePersonnel

Polttoaineen hinta nousussa

Finnair’s long-haul fleet grows

Harmonised Airbus long-haul fleet, average age 2.5 yearsLater this year one more A330 aircraft and at turn of year two more A340 aircraft. Next year a total of 15 long-haul Airbus aircraftFive new Airbus A321ER aircraft for leisure traffic 2013-14Last MD-11 aircraft were sold; one is used in Finnair’s cargo traffic

Strong growth in trafficJanuary-July traffic performance• Scheduled traffic +5%• Passenger load factor +4%-points• Asian traffic +12%• Business class in Asian traffic +40%• Business class share of long-haul traffic 11%• Cargo +37 %

Asian demand goodDouble-digit growth figuresFinnair’s market share in Asian traffic rose by 12%Asian revenues clearly above European revenuesNew openings next year• Daily direct flight to Singapore next spring• Weekly frequencies to Hong Kong up from 7 to 12• In spring, additional flights to present Asian

destinationsAfter planned capacity increases Finnair is flying over 70 weekly flights to AsiaEncouraging start on cargo aircraft routes to Seoul and Hong Kong

More frequencies to Asia

Finnair weekly frequencies to Asia(summer season average frequencies)

0

10

20

30

40

50

60

70

80

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F

IndiaSE AsiaChinaNE Asia

Summer peak season frequencies per week

Asian traffic clearly the biggest categoryGeographical distribution of Finnair scheduled traffic

America6 %

Europe31 %

Domestic5 %

Asia58 %

Revenue passenger kilometres Jan-Jun 2010

Funding securedFunding ensured for the final part of the investment programCash reserves more than 570 mill. eurosFunding sources totalling over 500 mill. euros• 1 A330 in Q4 probably operational lease• Loan-back of TyEL pension fund reserves, 330 mill.

euros remaining • Unused credit facility of 200 mill. euros signed in June

Cash flow from operations turned to positiveIn addition, 200 million euro commercial paper programme, of which 46 in use

Cash flow improved in Q2 Cash flow statement

375523mill. euroLiquid funds at the beginning-109+46mill. euroChange in liquid funds266569mill. euroLiquid funds at the end

+108+79mill. euroCash flow from financing

+25+21mill. euroChange of advances and others

-200-74mill. euroGrossinvestments *

-175-53mill. euroInvestments and sale of assets

-42+20mill. euroCash flow from operations

Q2/2009Q2/2010

** incl. A330 aircraft lease arrangement

* incl. financial interest bearing assets at fair value

Strong balance sheet Equity ratio and adjusted gearing

0

20

40

60

80

100

120

2005 2006 2007 2008 2009 Q2 2010

Equity ratio Adjusted Gearing%

Changes in managementLasse Heinonen continues as Deputy CEO, lineresponsibility for Aviation Services and CargoErno Hildén as CFO, also in charge of Finnair AircraftFinanceVille Iho as SVP operations, for the time being in charge of Resource MnanagementManne Tiensuu as new SVP Human ResourcesAri Kuutschin as Managing Director of Northport OyVP Sales Petri Schaaf, VP Flight Operations Markku Malmipuro and VP Cabin Service Kati Lehesmaa as wellas representation of all personnel groups

Thank You!

Prerequisites for better second halfCapacity grows by nearly five per centStrengthening of demand and average price continues as business travel increasesNew routes in August to Stockholm Bromma and StuttgartLeisure travel picking upCargo demand continues to be strongEfficiency measures continue, impact depends partly on early-autumn collective agreement solutionsPositive result expected for second half of the year

Appendices

Operational result improved

--56,4-67,3mill. euroProfit before tax

-47,6-20,4mill. euroChanges in fair value of derivatives and exchange rates in fleet overhauls

--52,9-59,2mill. euroOperating profit/loss (EBIT)

--6,252,5mill. euroAdjusted EBITDAR*

-

-

-4,3

1,3

Change %

0,01,1mill. euroOne off items/ capital gains

-100,5-39,9mill. euroAdjusted EBIT* i.e. Operational result

1052,41006,9mill. euroOperational expenses

943,1955,0mill. euroTurnover

Q1-Q2/09

Q1-Q2/10

*excl. capital gains. fair values changes of derivatives and non recurring items

Segment results*

-53,2-13,6Total

-47,4-10,6Airline Business

-2,8-3,7Unallocated items-2,8-1,6Travel Services-0,22,3Aviation Services

Q2/2009Q2/2010Mill. euro

* Operating profit. excluding capital gains, fair value changes of derivatives and non restructuring items

Segment results*

-100,5-39,9Total

-91,2-35,2Airline Business

-6,3-7,4Unallocated items-5,1-1,2Travel Services2,13,9Aviation Services

Q1-Q2/09Q1-Q2/10Mill. euro

* Operating profit. excluding capital gains, fair value changes of derivatives and non restructuring items

Trend in profitability turned

-80

-60

-40

-20

0

20

40

60

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

MEUR

2006 2007 20082005 2009 2010

Change in EBIT* per quarter

*excl. capital gains, fair value changes of derivatives and non recurring items

Cash flow improved in H1 Cash flow statement

392607mill. euroLiquid funds at the beginning-126-38mill. euroChange in liquid funds266569mill. euroLiquid funds at the end

+293+37mill. euroCash flow from financing

+24+66mill. euroChange of advances and others

-328-143mill. euroGrossinvestments *

-304-77mill. euroInvestments and sale of assets

-115+2mill. euroCash flow from operations

Q1-Q209Q1-Q2/10

** incl. A330 aircraft lease arrangement

* incl. financial interest bearing assets at fair value

Finnair has a rolling hedging policy

0%

20%

40%

60%

80%

100%

2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1

hedge ratioupperlower

Fuel cost change in Q2

74

103109

-9-8

0

50

100

150

2009Q2 Volume Price Currency Hedging 2010Q2

MEUR

Fuel cost change in H1

1 16

241208

-24

-25

0

100

200

300

2009H1 Volume Price Currency Hedging 2010H1

MEUR

ROE and ROCERolling 12 months

-20

-15

-10

-5

0

5

10

15

20

Q1 20

05Q2

2005

Q3 20

05Q4

2005

Q1 20

06Q2

2006

Q3 20

06Q4

2006

Q1 20

07Q2

2007

Q3 20

07Q4

2007

Q1 20

08Q2

2008

Q3 20

08Q4

2008

Q1 20

09Q2

2009

Q3 20

09Q4

2009

Q1 20

10Q2

2010

% ROE ROCE

Investments and cash flowfrom operations

-200

-100

0

100

200

300

400

2005 2006 2007 2008 2009 Q2 2010

Operational net cash flow InvestmentsMEUR

Aircraft operating lease liabilities

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 Q2 2010

MEUR Flexibility. costs. risk management

On 30 June all leases were operating leases. If capitalised usingthe common method of multiplying annual aircraft lease payments byseven, the adjusted gearing on 30 June 2010 would have been98.1%

Emissions trading raises questions

EU begins air transport emissions trading unilaterally in 2012Free emissions rights to be received by each airline for 2012-2020 will be based on this year’s revenue tonne kilometresRisk of changing ground rules existsFinnair has supplied the necessary documentation to TraFiCurrent emissions trading model will increase carbon leakagerisk and jeopardise EU competitivenessFinnair supports sector-specific emissions trading which is global and does not distort competition

Finnair's strategy working

Asia-Europe strategy based on Via Helsinki concept is working; geographical advantage a lasting competitive advantageGrowing affluence in Asia presents huge growth potentialPassenger numbers have grown from 0.3 million in 2001, to over 1.1 million in 2009 Finnair's Asian traffic accounted for 3.7% of Finland's GDP growth in 2002–2007Created more than 4,000 jobs in Finnair alone8,000 new jobs by 2015 Without Asian strategy, company would be only half of present sizeModern fleetIndicators show operational and service quality at a high level

Towards future growthCustomers of the future will increasingly come from AsiaStrategy update and supporting reforms during the spring– main strategy will not changeCompetitiveness based on excellent product and efficientoperationsGroup structure focused on core functions in order to achieve flexibility, partners supplement network and serviceprovisionWorking toghether with personnel, to reach jointobjectivesSustainable development creates added value for environment-conscious customers

Finnair Financial Targets”Sustainable value creation”

Operatingprofit (EBIT)

EBIT margin at least 6% => over 120 mill. €

EBITDAREBITDAR margin at least 17% => over 350 mill. €

Economicprofit

Pay out ratio Minimum one third of the EPS

AdjustedGearing

Gearing adjusted for aircraft lease liabilities not to exceed 140 %

To create positive value over pretax WACC of 8.25%

Finnair’s Financial Targets Description of targets

Operatingprofit (EBIT)

EBITDAR

Economicprofit

Pay out ratio

AdjustedGearing

Turnover + other operating revenues – operating costs

Result before depreciation. aircraft lease paymentsand capital gains

Operating profit EBIT – Weighted Average Cost of Capital

Interest bearing debt + 7*Aircraft lease payments– liquid funds) / (Equity + minority interests)

Dividend per share / Earnings per share

www.finnair.com/groupFinnair Group Investor Relations

email: investor.relations@finnair.com

tel: +358-9-818 4951fax: +358-9-818 4092