Financial
Information
2023
Contents
Finnair – Financial Information 2023 2
Review of
the year 2023
The Report of the
Board of Directors
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Review of the year
The Report of the Board of Directors
Financial Statements
Board of directors’proposal on the dividend
Auditor’s Report
The year 2023 was special for Finnair in many ways.
We celebrated our centenary in November and
are the sixth oldest continuously operating airline
in the world. However, an even more significant
achievement for us was the restoration of our
profitability on an annual basis after the twin crises
caused by the COVID-19 pandemic and the closure
of Russian airspace.
During the year, we carried 11 million passengers
and our revenue grew to 3.0 billion euros. Our
comparable EBIT was 184.0 million euros, compared
to a loss of 163.9 million euros in 2022. Together with
the entire Finnair team, we not only restored our
profitability, but reached the financial target of a
comparable operating profit level of 5 per cent that
was set in autumn 2022 approximately 12 months
ahead of the target schedule.
Our capacity in 2023, measured in available seat
kilometres, was approximately 81 per cent of the
pre-pandemic level of 2019, including wet leases.
Unit revenue per available seat kilometre increased
by 9.8 per cent year-on-year, driven by successful
pricing and improved passenger load factors.
All of Finnair’s committed personnel are to
thank for the turnaround we have made.
Review of
the year 2023
Finnair – Financial Information 2023 3
The Report of the
Board of Directors
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Review of
the year 2023
Financial
Statements
The implementation of the strategy to restore
profitability, which began in autumn 2022, has
progressed systematically, and at the same time
we have succeeded in taking advantage of the
opportunities offered by the continued strong
travel market. We have profitably redirected
our network, we have been able to get our
Airbus A330 aircraft into productive use through
cooperation with oneworld partners, and we
have managed to control costs despite the
increased inflation. At the same time, we have
intensified our sales efforts and increased the
share of direct sales channels, optimised our
fleet and executed hundreds of large and small
projects that have supported revenue growth
and cost control. We will continue to take care of
Finnair’s profitability also from now on, focusing
on continuous improvement.
The support of our shareholders has played an
important role in achieving Finnair’s turnaround.
In November, we carried out a 570-million-euro
rights issue aimed at strengthening Finnair’s
balance sheet and financial position in order to
better manage our financial liabilities, support the
implementation of our strategy for sustainable
profitable growth and ensure our ability to
implement investments in the future. I would like
to extend my warmest thanks to all old and new
shareholders who participated in our rights issue.
Through the successful rights issue, we have,
among other things, repaid the rest of the
400-million-euro capital loan granted by the
state of Finland. We also repaid an additional
120-million-euro tranche of our 600-million-
euro pension premium loan. As a result of these
measures, as well as the strong full-year results
and cash flow, our balance sheet is healthier
than before. Our financial expenses have also
decreased.
Our customer satisfaction has remained at a
good level by international comparison, and
our Net Promoter Score for the full year was 35.
Punctuality and reliability of flights are key factors
in customer satisfaction. During 2023, we continued
development projects supporting on-time
performance. Unlike many other airlines, we have
been able to operate almost all our flights, thus
avoiding cancellations, and our reliability was once
again top notch globally.
We have continued to invest in customer
experience. The new cabins are now installed in
23 out of 25 wide-body aircraft. We have started
the construction of a new Schengen lounge that
will open in summer 2024 at our home hub Helsinki
Airport. A new era will begin in the Finnair Plus
program in March 2024, when we will start using the
Avios loyalty currency, new benefits will be added
to the program and the program becomes spend-
based. We are also constantly developing the
functionality of our digital services.
During 2023, we continued our sustainability work,
focusing especially on reducing carbon dioxide
emissions from our flights. We are committed to
setting science-based emission reduction targets
in accordance with the Science Based Targets
Initiative, and we will submit our emission reduction
targets to the Science Based Targets Initiative for
validation in early 2024. Sustainable aviation fuel
will play a significant role in reducing our emissions,
and in early 2023 we purchased our largest one-off
batch of SAF so far. The share of SAF in our total fuel
consumption is still very small, about 0.2 per cent,
but its share will increase in the future.
At the end of the year, we were able to celebrate
our 100-year journey together with our
stakeholders in 11 countries. I would like to warmly
thank all our customers, partners, owners and all
Finnair employees for the journey together. Safety,
punctuality, reliability and good customer service
are our priorities also in the next century of Finnair.
Jaakko Schildt,
Interim CEO
“The support of our
shareholders has played an
important role in achieving
Finnair’s turnaround.”
Finnair – Financial Information 2023 4
The Report of the
Board of Directors
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Review of
the year 2023
Financial
Statements
The Report
of the Board of
Directors
Finnair – Financial Information 2023 5
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Business model and
operating environment
Financial performance in
Financial position and capital
expenditure
Fleet
Strategy implementation
Financial performance
–
Non-financial performance
in
Changes in company
management
Shares and shareholders
Risk management
Significant risks and
uncertainties
Seasonal variation and
sensitivities in business
operations
Outlook
Performance indicators
classified as alternative
performance measures
Reconciliation of performance
indicators classified as
alternative performance
measures
Other performance indicators
THE REPORT OF THE BOARD OF DIRECTORS
Business model and operating environment
Finnair is a network airline that specialises in
passenger and cargo traffic between Europe,
North America, Asia and Middle East. It also offers
package tours under its Aurinkomatkat-Suntours
(later Aurinkomatkat) brand. Finnair offers direct
flights to approximately 40 countries and over 100
destinations.
The company’s loyalty programme Finnair Plus
strengthens engagement with customers and
generates valuable customer data. It is one of
Finland’s leading loyalty programmes with c. 4.5
million members. The number of members has
grown by 7 per cent during 2023. The programme
currently has more than 100 partners. In the spring
of 2024, Finnair’s frequent flyer programme will
enter a new era as the frequent flyer currency is
replaced by Avios, which is the common currency
for frequent flyers used by several partner airlines.
With Avios, Finnair’s loyal customers will have even
wider opportunities to take advantage of the
benefits they have accrued in the program.
Finnair’s business is cyclical in nature, and in
addition to long-term megatrends, it is heavily
influenced by external factors described in the
adjacent picture. Many of these factors have had a
strong impact on Finnair’s operations, especially in
recent years.
Read more on Finnair’s website.
External factors influencing airlines
SEASONALITY IN
LEISURE AND BUSINESS
TRAVEL
WEATHER,
NATURAL DISASTERS,
PANDEMICS AND OTHER
EXTERNAL SHOCKS
POLITICAL ENVIRONMENT
AND REGULATION
EXCHANGE
RATES
PRICE OF
JET FUEL
GLOBAL
ECONOMIC CYCLES
CHANGES IN CONSUMER PREFERENCE, EXPECTATIONS,
PURCHASING PATTERNS AND DEMOGRAPHICS
Finnair – Financial Information 2023 6
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
yields remained at a good level, thanks to the
strong demand as well as constrained capacity
caused by the global labour shortage and
operational challenges due to longer flight times.
Similarly, demand in intra-European and North
Atlantic markets was robust while capacity
remained constrained. Consequently, passenger
revenue increased clearly more year-on-year
than capacity. Scheduled market capacity,
measured in ASKs, between origin Helsinki and
Finnair’s European destinations increased by
10.4 per cent (164.0) year-on-year. Direct market
capacity between Finnair’s Asian and European
destinations increased by 95.2 per cent (71.7) and
between Finnair’s North Atlantic and European
destinations by 17.4 per cent (109.6).
The strategic partnership with Qatar Airways,
that commenced in late-2022, continued with
daily flights from Helsinki, Copenhagen and
Stockholm to Qatar Airways’ home airport in
Doha. Qatar Airways purchases a fixed share
of the passenger and cargo capacity of these
flights operated by Finnair. Finnair also engages
in closer cooperation with certain other oneworld
partners through participation in joint businesses,
namely the Siberian Joint Business (SJB) on flights
between Europe and Japan, and the Atlantic Joint
Business (AJB) on flights between Europe and
North America. Further, Finnair is also engaged in
joint business operations with Juneyao Air on flights
between Helsinki and Shanghai and on European
and mainland Chinese routes.
Demand for Aurinkomatkat travel packages was
strong throughout the year. This was reflected
in increased package prices, which enabled
Aurinkomatkat to cover increasing flight and hotel
costs. Also Aurinkomatkat’s Net Promoter Score
(NPS) measuring customer satisfaction was at
an excellent level of 60 (60). Due to the strong
demand, Aurinkomatkat increased its capacity
to popular destinations such as Crete, Rhodes,
Turkey and the Canary Islands even though the
wildfires in Rhodes temporarily shifted demand
to other locations during the third quarter. Despite
the higher prices, demand remained strong also
for last-minute deals. In addition, customers have
booked their trips earlier and sales for the year
2024 are at a good pace. Demand for city holidays
continued to grow strongly and passenger
numbers were at a record high. The war in Ukraine
or the Middle East crisis have not had a significant
impact on the demand for Aurinkomatkat, but city
breaks in Tel Aviv have been cancelled for the time
being.
In the global air freight market, capacity already
exceeded the pre-pandemic levels, but air cargo
yields were still slightly elevated compared to the
pre-pandemic levels. However, growing supply,
weakened demand and, thus, declining market
prices resulted in lower Finnair’s cargo revenue
than in the record high year 2022 although the
softened demand for cargo already started to level
off in Q4, which has a positive impact on market
prices.
The US dollar, which is the most significant expense
currency for Finnair after the euro, appreciated by
5.1 per cent against the euro year-on-year. The US
dollar-denominated market price of jet fuel was
19.5 per cent lower in 2023 than in the comparison
period and the euro-denominated market price
was 21.3 per cent lower. Changes in fuel price and
exchange rates are, however, not directly reflected
in Finnair’s result due to its hedging policy, as
the company hedges its fuel purchases and key
foreign currency items. The fuel hedging ratio was
low during the pandemic, but it has been clearly
lifted during the year, and, on the back of the
updated risk management policy, the average
hedging ratio will rise slightly during 2024. Finnair’s
2023 fuel bill increased year-on-year less than the
capacity as the jet fuel price was below 2022 levels
starting from Q2.
Business environment
in 2023
The impacts of the COVID-19 pandemic on
Finnair’s operations were already mild in 2023,
although travel to China, opened for travel in
early 2023, remained limited partly due to the
COVID-19 aftermath. On the other hand, the Russian
airspace closure to EU carriers had a clear impact
on Finnair’s Asian traffic also during the period.
Finnair has continued operating to most of its
Asian destinations despite routings that are up to
40 per cent longer. However, the Asian capacity,
measured in ASKs, was only 55 per cent compared
to 2019. The corresponding figures were 85 per
cent for European traffic and 102 per cent for North
America.
The war in Ukraine also had other adverse impacts,
as it led to an energy crisis, high fuel prices and,
partly because of this, to accelerating inflation. Also
the rising interest rates increased the uncertainty
of the operating environment as, together with the
inflation, it could have had a negative impact on
demand. Further, the situation in the Middle East
caused uncertainty in the operating environment.
Despite these factors, demand remained strong
throughout the year in all traffic areas.
Even though the longer Asian routings increased
the unit costs considerably, the Asian market
“The impacts of the COVID-19
pandemic on Finnair’s
operations were already mild in
2023.”
Finnair – Financial Information 2023 7
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Increasing value for society
• Enabling safe and free movement of people,
goods and services
• Improving cultural, societal and commercial
interaction
• Participating and inspiring cross-industry
collaboration
• Economic multiplier effects for the Finnish society
Sustainable growth
• Producing direct and indirect employment
( e.g. tourism, international trade and foreign
investments )
• Venturing out of our traditional business
to find solutions for our core
• Producing value for shareholders‘ investments
• Increased brand value
Satisfied & competent personnel
• Equal opportunities for personnel
• Good governance
• Safe and healthy work
• Support and respect of labour and human rights
Environmental impact
• Air emissions ( CO
2
and non-CO
2
)
• Noise emissions
• Liquid waste ( de-icing fluids )
• Material waste
Human
• Competent personnel
Intellectual and social
• Suppliers and partners
• Joint businesses ( AJB / SJB / Juneyao )
and alliance cooperation
• Distribution channels
• Public affairs
Immaterial
• Traffic & overflight rights
• Customer base and data
• Quality certifications
• Route network
• Brand
Financial and material
• Adjusted interest-bearing debt €2,034.5 million
• Equity capital €577.0 million
• Modern and efficient fleet of 79 aircraft
• COOL Nordic Cargo Terminal, Helsinki Hub
• Maintenance facilities
• Catering facilitie
s
Natural resources
• Fuel use ( jet and ground )
• Energy consumption of facilities
• Water use
• Purchased goods
• Material use
Capital ImpactBusiness activities
Customer service and products
Finnair and oneworld global network
Passenger and cargo traffic
Ancillary services
Package tours
Dynamic travel products
Support services
Catering
Aircraft maintenance
Ground handling
Airline training
COURAGE
SIMPLICITY
COMMITMENT
TO CARE
Purpose: Enriching life by bridging the world
Strategy and values
WORKING
TOGETHER
Strengthening
unit revenues
Customer-centric
commercial
and operational
excellence
Balanced growth
supported by
optimised fleet
Among industry
sustainability
leaders
Adaptable
Finnair culture
driven by
engaged people
Continuous cost
efficiency to ensure
competitiveness
Building
a sustainable
balance sheet
Finnair – Financial Information 2023 8
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Financial performance in 2023
Passenger traffic
The negative impact of the COVID-19 pandemic
was still visible in the Asian traffic, as travel
especially to China was limited during 2023. On the
other hand, the comparison period was burdened
by the Omicron variant that softened demand,
combined with the closure of Russian airspace
at the end of February 2022. Although the figures
Revenue in 2023
Finnair’s total revenue increased year-on-year as
the COVID-19 impact was visible in 2022 and, on the
other hand, as passenger yields were exceptionally
high during the period on the back of robust
demand and restricted market capacity.
Unit revenue (RASK) increased by 9.8 per cent and
amounted to 8.27 cents (7.53). The RASK increase
was caused by elevated passenger yields and
higher passenger load factor despite the lower
cargo yields during the period and the higher
number of cargo-only flights in the comparison
period, as these flights do not generate any ASKs
and, thus, have a positive RASK impact.
improved during the period due to strong demand,
the Russian airspace closure had a negative
impact on the 2023 figures as well, and this was
visible mainly in the Asian figures. Passenger
revenue increased by 41.0 per cent and traffic
capacity, measured in Available Seat Kilometres
(ASK), increased by 15.5 per cent overall against
the comparison period. The number of passengers
increased by 20.8 per cent to 10,983,300. Traffic,
Revenue by product
EUR million 2023 2022 Change %
Passenger revenue 2,411.6 1,710.7 41.0
Ancillary revenue 147.8 123.2 20.0
Cargo 192.0 352.3 -45.5
Travel services 237.1 170.3 39.2
Total 2,988.5 2,356.6 26.8
2023
2022
Revenue bridge by product
€ million
Passenger revenue
Ancillary revenue
Cargo
Travel services
-160.4
66. 8
700.8
24.7
2,988 .5
2,356.6
Finnair – Financial Information 2023 9
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
measured in Revenue Passenger Kilometres (RPK),
increased by 30.6 per cent and the passenger load
factor (PLF) increased by 8.8 percentage points to
76.4 per cent.
The distance-based reported traffic figures are
based on the great circle distance and, thus, do
not reflect the longer Asian routings caused by the
closure of Russian airspace. As a result, they are not
fully comparable with the figures prior to the airspace
closure. During the period, the adjusted ASKs, taking
into account the longer sector lengths, would be c. 15
per cent higher than the reported ASKs.
In Asian traffic, the number of scheduled passenger
flights was 55 per cent compared to 2019 because
of the remaining pandemic impacts, but especially
due to the Russian airspace closure. The number
of scheduled passenger flights was nonetheless
more than in the comparison period, as travel to
Asia opened. Therefore, ASKs grew by 42.4 per cent
and RPKs by 74.6 per cent. PLF increased by 14.1
percentage points to 76.5 per cent.
Due to the closed Russian airspace, Finnair has
increased its North Atlantic capacity. As a result,
North Atlantic ASKs in 2023 increased slightly
compared to 2019. Compared to 2022, ASKs,
however, decreased by 38.3 per cent as the
Stockholm operations were discontinued at the
end of October 2022. RPKs decreased only by 23.5
per cent year-on-year. Thus, PLF increased by 14.0
percentage points to 72.5 per cent.
ASKs grew by 8.2 per cent in European traffic
year-on-year. RPKs grew by 13.4 per cent on the
back of robust demand and the PLF increased by
3.6 percentage points to 78.7 per cent. Since the
beginning of 2023, Finnair has reported Middle
East as a separate traffic area whereas in 2022,
these figures were still included in the European
traffic. Comparison period figures have now been
adjusted accordingly.
Finnair started its cooperation with Qatar Airways
at the end of 2022. Flights operated by Finnair
between Copenhagen, Stockholm and Doha
commenced at the beginning of November,
and flights between Helsinki and Doha from
Passenger revenue and traffic data by area
Passenger revenue ASK RPK PLF
Traffic area
2023
EUR mill.
2022
EUR mill.
2023
Mill. km
2022
Mill. km
2023
Mill. km
2022
Mill. km % Change %-p
Asia 763.2 425.0 12,752.0 8,953.1 9,755.9 5,586.0 76.5 14.1
North Atlantic 214.9 244.3 4,162.9 6,743.3 3,019.7 3,946.2 72.5 14.0
Europe 1,045.3 855.0 14,760.0 13,639.5 11,618.9 10,243.3 78.7 3.6
Middle East 206.3 42.9 3,054.4 690.7 2,211.9 486.9 72.4 1.9
Domestic 172.7 128.2 1,425.3 1,271.8 1,019.8 894.4 71.5 1.2
Unallocated 9.3 15.3
Total 2,411.6 1,710.7 36,154.5 31,298.4 27,626.4 21,156.8 76.4 8.8
mid-December. As mentioned, the figures for these
three daily routes are reported as a part of the
new traffic area Middle East starting from 2023.
This traffic area includes flights to Dubai and Israel,
which were operated already before the Qatar
Airways cooperation. ASKs grew by 342.2 per cent
in Middle Eastern traffic year-on-year. RPKs grew
by 354.3 per cent and, thus, also the PLF increased
by 1.9 percentage points to 72.4 per cent.
Domestic traffic capacity increased by 12.1 per
cent, RPKs by 14.0 per cent and the PLF by 1.2
percentage points to 71.5 per cent year-on-year.
Ancillary
Ancillary revenue, consisting of e.g., various service
fees and inflight sales, increased to 147.8 million
2023
2022
€ million
Revenue bridge by traffic area
Asia
North Atlantic
Europe
Domestic
Middle East
Unallocated
2,356.6
274.5
-85.4
233.9
163.8
44.6
0.6
2,988.5
Finnair – Financial Information 2023 10
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
euros (123.2). Advance seat reservations, excess
baggage and frequent flyer programme-related
revenue were the largest ancillary categories.
Cargo
As Finnair operated fewer scheduled passenger
flights to Asia compared to the pre-pandemic
era, mainly due to the closure of Russian airspace,
Finnair’s 2023 cargo volumes were lower than the
pre-pandemic figures of 2019. Available cargo
tonne kilometres, however, increased by 12.6
per cent and revenue scheduled cargo tonne
kilometres by 3.5 per cent year-on-year. The
increase is mainly explained by the fact that Finnair
reports the cargo traffic figures related to the
Qatar Airways cooperation as Finnair operates the
flights. However, revenue related to these flights is
included in passenger revenue. Even though total
cargo tonnes increased by 10.3 per cent, cargo
revenue decreased by 45.5 per cent year-on-year,
due to lower cargo yields and the allocation of
Qatar Airways related revenue.
Travel services
Travel services’ financial development has
been positively affected by the robust demand
after the COVID-19 pandemic. During 2023, only
international package holidays were produced,
as the production of domestic package holidays
was discontinued earlier. The total number of travel
services passengers increased by 18.9 per cent
year-on-year and the load factor in allotment-
based capacity was 95.9 per cent. Travel Services
revenue increased by 39.2 per cent to 237.1 million
euros (170.3).
Other operating income
Other operating income decreased by 20.2 per
cent to 117.0 million euros (146.7), as the wet lease
arrangement with Eurowings Discover, that
commenced in Q2 2022, ended in Q1 2023.
Operating expenses
included in comparable
operating result
Finnair’s operating expenses, included in the
comparable operating result, increased by 9.5 per
cent mainly due to increased capacity and longer
Asian routings. Finnair continued its cost efficiency
initiatives during 2023.
Unit cost (CASK) decreased by 3.7 per cent and
totalled 7.76 cents (8.05). CASK excluding fuel
decreased by 2.1 per cent. Year-on-year, the
decrease was caused by the increased capacity,
the higher share of cargo-only flights in the
comparison period, as well as the achieved cost
savings.
2022 2023
Operating expenses included in comparable operating result
€ million
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Staff and other crew
related costs,
change 11%
Fuel costs, change 8%
Capacity rents,
change 5%
Aircraft materials and
overhaul, change 13%
Traffic charges,
change 13%
Sales, marketing and
distribution costs,
change 14%
Passenger and handling
services, change 19%
Depreciation, change 5%
Property, IT and other
expenses, change -9%
2,921.5
2,667.1
Key Figures – Revenue and profitability
2023 2022 2021 2020 2019
Revenue EUR mill.
2,988.5
2,356.6
838.4 829.2
3,097.7
change from previous year % 26.8 181.1 1.1 -73.2 9.2
Comparable operating result EUR mill. 184.0 -163.9 -468.9 -595.3 162.8
Comparable operating result of revenue % 6.2 -7.0 -55.9 -71.8 5.3
Operating result EUR mill. 191.4 -200.6 -454.4 -464.5 160.0
Comparable EBITDA of revenue % 17.3 6.5 -17.8 -30.3 15.8
Basic and diluted earnings per share (EPS)* EUR 0.022 -0.060 -0.057 -0.086 0.015
Unit revenue per available seat kilometre
(RASK)
cents/ASK 8.27 7.53 6.93 6.41 6.56
Unit revenue per revenue passenger
kilometre (yield)
cents/RPK 8.73 8.09 8.13 6.48 6.44
Unit cost per available seat kilometre (CASK) cents/ASK 7.76 8.05 10.81 11.01 6.22
CASK excluding fuel cents/ASK 5.27 5.38 9.06 9.21 4.76
* A rights offering was implemented in November 2023 and, therefore, 2019-2022 EPS figures have been
restated accordingly.
Finnair – Financial Information 2023 11
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
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The Report of the
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Financial
Statements
Operating expenses included in the comparable
operating result, excluding fuel, increased by 10.4
per cent.
Fuel costs, including hedging results and emissions
trading costs, grew mainly due to the increased
capacity (measured in ASK) and longer Asian
routings. Fuel efficiency (as measured in fuel
consumption per ASK) weakened by 5.5 per cent
due to e.g., longer Asian routings despite a limited
number of cargo-only flights, that do not generate
ASKs, in 2023. Fuel consumption per RTK, which
also accounts for developments in both passenger
and cargo load factors, however, decreased by 0.7
per cent year-on-year as passenger load factor
improved.
Staff and other crew-related costs increased
mainly due to the added capacity and longer
Asian routings as well as paid incentives.
Passenger and handling costs (including tour
operation expenses related to e.g., hotels) were
driven up by the increased volumes, especially in
passenger traffic. Sales, marketing and distribution
costs increased due to marketing activities and
improved sales intake.
Aircraft materials and overhaul costs went up due
to the added capacity and longer Asian routings.
Traffic charges increased as a result of the longer
routings between Europe and Asia and increased
capacity even though e.g., the Russian overflight
royalties did not accrue during the period.
Capacity rents, covering purchased traffic
from Norra and any wet leases or potential
cargo rents, increased versus the comparison
period as capacity increased. Property, IT and
other expenses, on the other hand, decreased
mainly due to exchange gains and cost savings.
Depreciation increased year-on-year e.g. due
to depreciation of the wide-body fleet cabin
refurbishment.
Result
As travelling was unrestricted within Europe, to the
United States and to almost all countries in Asia
during 2023, impacts of the COVID-19 pandemic
were fairly mild. However, as the Russian airspace
was closed back in February 2022, the rerouted
flights were longer, increasing e.g., staff, fuel and
navigation costs.
As revenue increased more than operating
expenses, Finnair’s comparable EBITDA and
comparable operating result both improved year-
on-year and comparable operating result turned
positive. Comparable EBIT margin was 6.2 per cent
(-7.0). In its strategy update in Q2, Finnair set a new
financial target, which is a comparable operating
profit margin of 6 per cent by the end of 2025.
Result
EUR million 2023 2022 Change %
Comparable EBITDA 516.5 153.2 >200
Depreciation and impairment -332.6 -317.1 -4.9
Comparable operating result 184.0 -163.9 >200
Items affecting comparability 7.5 -36.6 -120.3
Operating result 191.4 -200.6 195.4
Financial income 56.2 6.5 >200
Financial expenses -142.2 -137.9 -3.1
Exchange gains and losses 13.7 -38.8 135.3
Result before taxes 119.1 -370.7 132.1
Income taxes 135.2 -105.4 >200
Result for the period 254.3 -476.2 153.4
Operating expenses included in comparable operating result
EUR million 2023 2022 Change %
Staff and other crew related costs 498.1 447.1 11.4
Fuel costs 899.6 836.0 7.6
Capacity rents 107.2 102.5 4.6
Aircraft materials and overhaul 207.2 183.6 12.8
Traffic charges 233.8 206.5 13.2
Sales, marketing and distribution costs 117.1 103.1 13.6
Passenger and handling costs 414.1 348.0 19.0
Property, IT and other expenses 111.9 123.3 -9.2
Depreciation 332.6 317.1 4.9
Total 2,921.5 2,667.1 9.5
Finnair – Financial Information 2023 12
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Unrealised changes in foreign currencies relating
to fleet overhaul provisions were 7.1 million euros
(-8.8) due to the weakened US dollar during the
period. During the period, Finnair recognised an
impairment of 13.7 million euros related to lease
agreements for a maintenance hangar and its
land area situated in the Helsinki airport area,
whereas in 2022, impairment on A330 aircraft was
the biggest item affecting comparability (-32.7).
Other items affecting comparability consist of
fair value changes of derivatives for which hedge
accounting is not applied, sales gains or losses and
restructuring costs. These items totalled 14.0 million
euros (4.9) during 2023 and related mostly to sales
gains of 13.3 million euros (6.6) mainly consisting of
gains of lease buyouts regarding six A321 aircraft.
The net financial expenses were negative mainly
because of the interest expenses surpassing
interest income and exchange gains. The company
did not book any deferred tax assets based on the
losses in Q1 2023 due to the uncertainty relating
to utilisation of these losses in taxation. However,
the recognised income taxes mainly related to
changes in deferred tax assets that are based
on certain temporary differences that had not
been recognised during the financial year 2022.
The company decided to recognise them in Q1 as
these items have no statute of limitations, and as
the company outlook had improved. In Q2, Finnair
re-recognised 99 million euros of the deferred tax
assets related to 2020 and 2021 tax losses that
were written down in 2022 as its financial outlook
had further improved. In Q4, it re-recognised the
remaining 18 million euros of the written down
deferred tax assets related to 2020 and 2021 tax
losses and recognised also 28 million euros of the
deferred tax assets related to 2022 tax losses. Other
recognised income taxes between during 2023
consisted of utilised tax losses and other temporary
differences.
The result for the period was positive due to
improved financial performance and the
abovementioned recognised deferred tax assets.
Finnair – Financial Information 2023 13
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Financial position
and capital expenditure
Balance sheet
The Group’s balance sheet totalled 3,698.0 million
euros at the end of December (4,133.0). Due to
investments mainly related to acquisitions of nine
previously leased narrow-body aircraft, the fleet
book value increased by 158.2 million euros despite
depreciation. The right-of-use fleet decreased
by 157.9 million euros due to depreciation and the
aircraft acquisition.
Receivables related to revenue increased to 154.4
million euros mainly due to improved ticket sales
(134.9). Net deferred tax assets increased to 234.0
million euros (80.6) mainly due to the re-recognition
of deferred tax assets totalling to 117 million euros
in Q2 and Q4 related to 2020 and 2021 tax losses
as well as recognition of deferred tax assets of 28
million euros in Q4 related to 2022 tax losses. The
pension assets rose to 128.0 million euros (120.0)
mostly due to actuarial gains whereas pension
obligations increased to 0.8 million euros (0.7).
Deferred income and advances received
increased to 506.7 million euros (452.0). This was
mainly caused by an increase in the unflown ticket
liability, amounting to 394.8 million euros (356.4)
due to capacity growth and stronger passenger
yields.
Key Figures – Capital structure
2023 2022 2021 2020 2019
Equity ratio % 15.6 9.9 11.8 24.6 24.9
Gearing % 192.8 266.4 321.8 153.2 64.3
Interest-bearing net debt EUR mill. 1,112.5 1,094.0 1,530.9 1,373.8 621.0
Interest-bearing net debt /
Comparable EBITDA
2.2 7.1 -10.3 -5.5 1.3
Gross capital expenditure EUR mill. 484.2 199.6 434.5 515.9 443.8
Return on capital employed (ROCE) % 8.8 -6.1 -13.9 -15.2 6.3
Cash to sales % 30.9 64.7 151.0 99.3 30.8
350
300
250
200
150
100
50
0
%
2022 2023
Cash funds
Adjusted Interest-bearing liabilities
Equity
Gearing
Equity ratio
Gearing
€ million
3,500
3,000
2,500
2,000
1,500
1,000
500
0
922.0
577.0
15.6%
2,034.5
192.8%
Finnair – Financial Information 2023 14
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
The profit for the period augmented shareholders’
equity, which totalled 577.0 million euros (410.7),
or 0.03 euros per share (0.05
1
). During the period,
Finnair redeemed the hybrid bond of 200 million
euros and paid the related interests which had a
declining impact on equity. Further, Finnair carried
out a rights issue of 570 million euros in November
to strengthen its financial position. It had an
impact on the structure of equity as the company
converted the 400-million-euro capital loan
granted by the State of Finland into equity pro rata
to the State’s ownership and repaid the remainder
of it together with the accrued interests to the State
after the rights issue. Shareholders’ equity includes
Cash flow
and financial
position
During 2023, net cash flow from operating
activities was strong due to materially improved
comparable EBITDA. Net cash flow from
investments was negative, due to fleet-related
investments and changes in other current financial
assets (maturity over three months). Net cash flow
from financing was negative due to both loan and
Cash flow
EUR million 2023 2022
Net cash flow from operating activities 472.3 259.0
Net cash flow from investing activities -464.0 -75.5
Net cash flow from financing activities -676.4 42.1
Capital structure
% 31 Dec 2023 31 Dec 2022
Equity ratio 15.6 9.9
Gearing 192.8 266.4
Liquidity and net debt
EUR million 31 Dec 2023 31 Dec 2022
Cash funds 922.0 1,524.4
Adjusted interest-bearing liabilities 2,034.5 2,618.4
Interest-bearing net debt 1,112.5 1,094.0
2022
2023
2023
2022
Balance sheet
5,000
4,000
3,000
2,000
1,000
0
€ million
Fleet
Other fixed assets
Other assets
Cash and cash
equivalents and other
financial assets
Assets Equity and liabilities
Equity
Interest-bearing
liabilities
Deferred income
and advances
received
Other liabilities
2,025.6
2,629.1
506.7
452.0
577.0
410.7
3,698.0
4,133.0
3,698.0
4,133.0
588.7
641.2
1 ,828.0
1,827.6
282.2
295.5
665.8
485.5
922.0
1,524.4
lease liability repayments. The loan repayments
include the senior bond buyback of 18 million euros
executed in Q1, the first 100-million-euro tranche of
the pension premium loan amortisation in June and
another tranche of 220 million euros in December,
the 200-million-euro hybrid bond redemption with
20-million-euro interests in September as well as
the remaining 81 million euros of the capital loan
granted by the State of Finland together with total
interests and other fees of 49 million.
The equity ratio on 31 December 2023 improved
from the year-end 2022 mostly thanks to the
positive result for the period and lower interest-
a fair value reserve that is affected by changes in
the fair values of jet fuel and currency derivatives
used for hedging as well as actuarial gains and
losses related to defined benefit plans. The value
of the item at the end of December was 48.6 million
euros after deferred taxes (42.8) as actuarial
gains from defined benefit pension plans had an
improving impact on equity.
1
A rights offering was implemented in November
2023. The shareholders’ equity per share for the
comparison period has been restated accordingly.
Finnair – Financial Information 2023 15
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
and acquired previously leased narrowbody
aircraft with more than 200 million euros. Finnair
has a 200-million-euro short-term, unsecured
commercial paper programme, which was unused
at the end of December.
Adjusted interest-bearing liabilities decreased
from year-end 2022 due to repayments of
lease liabilities, weakened US dollar and loan
repayments. The share of lease liabilities totalled
1,115.0 million euros (1,330.7).
Capital expenditure
Gross capital expenditure, excluding advance
payments, totalled 484.2 million euros during
2023 (199.6) and was primarily related to fleet
investments.
Cash flow from investments (including fixed asset
investments and divestments, sublease payments
received, advance payments and change in other
non-current assets) totalled -403.3 million euros
(-62.7).
Change in other current financial assets (maturity
over three months) totalled -60.7 million euros (-12.8)
also forming a part of the total net cash flow from
investments, which amounted to -464.0 million
euros (-75.5).
Cash flow from investments (including only fixed
asset investments and advance payments) for the
financial year 2024 relates mainly to the fleet and
is expected to total -235 million euros. Investment
cash flow includes both committed investments
as well as estimates for planned, but not yet
committed, investments.
The company has 42 unencumbered aircraft,
which account for approximately 38.0 per cent of
the balance sheet value of the entire fleet of 1,828.0
million euros.
2
bearing liabilities. Gearing declined year-on-year
on the back of improved equity.
The company’s liquidity remained strong on the
back of the robust net cash flow from operating
activities and the rights issue even though the
company repaid 130 million euros of the capital
loan granted by the State of Finland including the
total interests and other fees, repaid 320 million
euros of the pension premium loan, redeemed
the 200-million-euro hybrid bond with interest
2
Fleet value includes right of use assets as well as
prepayments of future aircraft deliveries.
Shareholder return policy
and the Board’s proposal
for the distribution of
profit
The aim of Finnair’s shareholder return policy is
to pay, on average, one-third of the earnings per
share as dividend or capital distribution during
an economic cycle. When deciding on such
distribution, Finnair intends to take into account its
earnings trend and outlook, financial situation as
well as capital and investment need for any given
period. Any future distributions may be made in
two annual investments.
In connection with the 570-million-euro rights issue
implemented in November, Finnair announced that
it is targeting to reinstate its ability for shareholder
distributions from 2025 onwards based on 2024
financial statements.
In 2023, earnings per share were 0.022 euros
(-0.060). Finnair Plc’s distributable equity amounted
to 473,123,719.36 euros on 31 December 2023. The
Board of Directors proposes to the Annual General
Meeting that no dividend be distributed based on
the financial statements adopted for 2023.
Cash Flow change 2023
€ million
Net cash flow from
operating activities, +472.3
Net cash flow from
investing activities, -464.0
Net cash flow from
financing activities, -676.4
Liquid funds
at the beginning*
Comparable EBITDA
Loan and lease liability repayments
Share issue
Hybrid bond repayments
Change in working capital
Capital loan repayments
Acquisitions and disposals of assets
Financial expenses paid, net
Share issue, hybrid bond and
capital loan expenses
Change in other current financial
assets (maturity over 3 months)
Other operating activities
Liquid funds at the end*
Other investing activities
2,000
1,500
1,000
500
0
516.5
58.1
-98.7
-403.7
-60.7
0.4
-400.0
-575.5
570.4
-200.0
-3.6
-71.3
707.5
1,375.6
* Finnair’s cash funds differ from liquid funds as liquid funds do not include other financial assets (maturity over 3 months).
Finnair – Financial Information 2023 16
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Finnair’s operating fleet
Finnair’s fleet is managed by Finnair Aircraft
Finance Oy, a wholly-owned subsidiary of Finnair
Plc. At the end of year, Finnair itself operated
55 aircraft, of which 25 were wide-body and 30
narrow-body aircraft. The average age of the fleet
operated by Finnair was 12.5 years.
During the year, Finnair Aircraft Finance Oy
purchased in total nine narrowbody aircraft
previously leased to the company: in February
one A320 aircraft, and in March one A320 and one
A321 aircraft, and during December six previously
leased A321 aircraft. In March, the company also
re-delivered one leased A319 to the lessor.
Fleet renewal
At the end of year, Finnair had seventeen A350
aircraft, which have been delivered between
2015–2021, and two A350 aircraft on order from
Airbus. In April, the company concluded an
agreement with the manufacturer to defer the
second aircraft on order. The first of the two
remaining aircraft on order is scheduled to be
delivered to Finnair in Q4 2024 and the second
deferred aircraft in Q2 2026.
Finnair’s investment commitments for property,
plant and equipment, totalling 313.7 million euros,
include the upcoming investments in the wide-
body fleet.
Fleet operated by Norra
(purchased traffic)
Nordic Regional Airlines (Norra) operates a fleet
of 24 aircraft for Finnair on a contract flying basis.
All the aircraft operated by Norra are leased from
Finnair Aircraft Finance Oy.
Fleet
Fleet operated by Finnair*
31 Dec 2023 Seats #
Change
from
31 Dec 2022
Own**
Leased
Average
age
31 Dec 2023 Ordered
Narrow-body fleet
Airbus A319 144 5 -1 5 22.6
Airbus A320 174 10 10 21.4
Airbus A321 209 15 7 8 9.4
Wide-body fleet
Airbus A330 279/263 8 4 4 14.2
Airbus A350 278/297/321/336 17 5 12 6.1 2
Total 55 -1 31 24 12.5 2
* Finnair’s Air Operator Certificate (AOC).
** Includes JOLCO-financed (Japanese Operating Lease with
Call Option) and ECA (Export Credit Agency) financed aircraft.
Fleet operated by Norra*
31 Dec 2023 Seats #
Change
from
31 Dec 2022 Own Leased
Average
age
31 Dec 2023 Ordered
ATR 68–70 12 6 6 14.4
Embraer E190 100 12 9 3 15.5
Total 24 0 15 9 15.0 0
* Nordic Regional Airlines Oy’s Air Operator Certificate (AOC).
Finnair – Financial Information 2023 17
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
During Q2 2023, Finnair updated its strategy
extending to 2025, as the company had already
executed many of the actions planned for
the strategy period. The strategy, published
in September 2022, was focused on restoring
profitability and maintaining Finnair’s
competitiveness regardless of the closed Russian
airspace. It targeted a comparable operating
profit level of at least 5% from mid-2024 onwards.
In its strategy update in Q2, Finnair set a new
financial target, which is a comparable operating
profit margin of 6% by the end of 2025. The strategy
themes to achieve this target are:
• Customer-centric commercial and operational
excellence
• Balanced growth supported by optimised fleet
• Continuous cost efficiency to ensure
competitiveness
• Among industry sustainability leaders
• Building a sustainable balance sheet
• Adaptable Finnair culture driven by engaged
people
In November, Finnair carried out a rights issue
of 570 million euros. The gross proceeds from
the rights issue were used to strengthen Finnair’s
balance sheet and financial position to better
manage its outstanding financial liabilities,
support the implementation of its strategy to drive
sustainable profitable growth and ensure its ability
for future investments.
Strategy implementation
At the same time, the company set additional
key long-term financial targets. In addition to the
previously announced comparable EBIT margin
target of 6%, Finnair aims to achieve a net debt
of 1–2 times the comparable EBITDA by the end
of 2025 and to restore the company’s ability for
shareholder distributions from 2025 onwards.
Further, Finnair maintained its goal to be carbon
neutral by 2045.
Finnair’s long-term financial targets are based
on the following key assumptions: the company’s
overall capacity, measured in Available Seat
Kilometres (ASK), would increase by more than
15 per cent from 2023 to 2025; the company’s
maintenance capex would be 80–100 million
euros annually; the company would be able to
utilise 190 million euros of the recognised deferred
tax assets, which would limit the corporate tax
payable over the medium term; and the company
would maintain a cash to sales ratio of 30 per cent
over time.
Customer-centric
commercial and
operational excellence
Finnair aims to be a modern Nordic airline,
providing customers with the ability to tailor their
journey at each step of the process as well as to
remain relevant outside of the air travel experience.
The first step has been to significantly increase the
share of direct distribution, improve digital sales
capability, and develop revenue optimisation
and partner utilisation. The next step is to smooth
Finnair – Financial Information 2023 18
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
the process from the customer’s perspective by
shifting to customer-centric and data-driven sales,
strengthening customer relationships by providing
the right product at the right time and increasing
customer engagement with more targeted sales
communications. Safety as well as excellent
on-time performance and regularity remain at
the core of Finnair’s operational quality, and the
company invests in the use of analytics and data to
provide a smooth and timely travel experience.
The role of digital services is a key part of Finnair’s
strategy, and its importance will continue to grow.
The average monthly number of unique and
verified Finnair website visitors in 2023 (2.1 million)
decreased from the comparison period level (2.3).
This was mainly caused by the revised cookie
consent policy. The number of active users of
the Finnair mobile application increased by 21.0
per cent to 860,000 year-on-year, as customers
were able to effect more changes and purchase
more ancillaries directly from the app. Share of
passengers in Finnair’s modern channels
3
grew to
67.8 per cent (66.5) driven by the increasing NDC
(New Distribution Capability) share in all customer
segments.
The updated strategy still emphasises the
utilisation of joint businesses with airline
partnerships (Atlantic Joint Business or AJB,
Siberian Joint Business or SJB and joint business
with Juneyao Air). This highlights the role of
oneworld partners such as American Airlines and
Alaska Airlines in North America, Qatar Airways
in the Middle East, Japan Airlines on routes to
Japan and Qantas on the new routes connecting
Australia and Asia, which Finnair started to operate
in late 2023. Finnair’s partnerships provide Finnair
customers with an extensive global network and,
on the other hand, significantly strengthen Finnair’s
distribution power.
Product and service quality are still differentiating
factors for Finnair, in which operative quality
plays an important role. Finnair’s long-haul
traffic emphasises a high-quality, differentiating
travel experience, while smoothness, simplicity
and efficiency are key to intra-European traffic.
Finnair’s Net Promoter Score (NPS) measuring
customer satisfaction was still at a good level of
35 (40). In addition to the refurbished wide-body
aircraft cabin, which has received very positive
feedback from Finnair customers, NPS has been
positively impacted by Finnair’s good on-time
performance of 80.9 per cent (79.0) despite the
capacity challenges that have impacted the
European aviation system. As an indication
of Finnair’s strong customer satisfaction, the
company was selected as the best airline in
Northern Europe for the 13th consecutive time in
the Skytrax customer survey. Further, customers
voted to select Finnair as a five-star airline in the
Airline Passenger Experience Association (APEX)
airline evaluation in 2023.
In 2023, the company announced changes to
the Finnair Plus programme, which will bring new
benefits to its members and new opportunities to
collect and use frequent flyer currency. Starting
from the spring of 2024, the programme will also
move to a new spend-based platform. In the
future, programme members will collect Avios
loyalty currency. Avios is a frequent flyer currency
used by Finnair’s oneworld partner frequent flyer
programmes British Airways Executive Club, Qatar
Airways Privilege Club and Iberia Plus.
The company also announced during 2023 that it
is investing in new, larger lounges on the Schengen
side of Helsinki Airport. The expanded lounges will
be available in the second half of 2024 to serve the
needs of a growing number of customers. Further,
the company announced that it will renew the
cabins of all Embraer E190 fleet consisting of 12
aircraft. The renewal will be implemented during
2024–2025.
Balanced growth
supported by optimised
fleet
Due to the closure of Russian airspace, Finnair’s
hub lost its unique geographic advantage, as flying
around Russia lengthens the routings between
Helsinki and the mega cities in Japan, South Korea
and China by up to 40 per cent, depending on the
Key Figures – Customer centric commercial and operational excellence
2023 2022 2021 2020 2019
Net Promoter Score 35 40 38 48 38
On-time performance % 80.9 79.0 82.3 90.2 79.3
Share of passengers in modern
channels
% 67.8 66.5 71.5 51.2 40.8
Average number of monthly visitors at
finnair.com
mill. 2.1 2.3 1.1 1.1 2.0
Active users for Finnair mobile app 1,000 860.0 711.0 326.0 187.3 332.6
Ancillary revenue EUR mill. 147.8 123.2 44.1 62.3 176.2
3
In 2023, Finnair started to report its share of
passengers in modern channels instead of share
of sales in direct digital channels as the company
is focusing on digitalisation. The modern sales
channels include direct as well as modern, digital
indirect channels.
Finnair – Financial Information 2023 19
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
destination. Finnair has re-balanced its network
with an emphasis on the West and the Middle East
and optimised its European network and traffic
structure to increase efficiency.
Through the Qantas wet and dry lease agreements
published in Q2 2023 and the cooperation with
Qatar Airways commenced in Q4 2022, Finnair
will be able to productively deploy its A330 fleet
despite the closure of Russian airspace, while
maintaining flexibility in the near term to restore
connectivity between Asia and Europe.
Faster, standardised turnarounds at airports,
improved aircraft utilisation and aircraft returning
from wet lease outs in Q1 2024, as well as the next
A350 delivery in Q4 2024, will enable Finnair to
grow in line with the market and increase capacity
at a competitive cost level despite the capacity
constraints prevailing in the aircraft market.
Continuous cost
efficiency to ensure
competitiveness
Maintaining profitable and competitive operations
require Finnair to continuously review its cost levels
with a view to containing cost increases. However,
the company has moved from programme-based
cost reductions towards continuous cost efficiency
improvement to ensure its competitiveness and to
Key Figures – Among industry sustainability leaders
2023 2022 2021 2020 2019
Fuel consumption tonnes 960,357 788,104 364,478 365,492 1,132,219
Flight CO
2
emissions tonnes 3,025,124 2,482,528 1,148,107 1,151,299 3,566,491
Flight CO
2
emissions g/ASK 83.7 79.3 94.9 89.0 75.6
Flight CO
2
emissions g/RTK 920.5 926.9 931.7 948.6 785.3
Key Figures – Adaptable Finnair culture driven by engaged people
2023 2022 2021 2020 2019
Average number of employees 5,195 5,336 5,614 6,573 6,771
Absences due to illness,
target decrease from
the previous year
% 4.6 5.4 2.3 3.8 4.6
Attrition rate % 3.8 7.3 6.8 7.4 3.8
LTIF (Lost-time injury frequency)
5.5 6.8 5.6 4.4 9.6
protect the opportunity to maintain investments in
the customer experience in the future.
In 2023, Finnair continued to advance existing
savings projects and developed new projects
that, among other things, utilise the opportunities
offered by artificial intelligence. Further, the
purchase of six previously leased A321 aircraft in
late 2023 will have an annual positive impact of
more than 20 million euros on both profit before
taxes and cash flow over the next few years. Also
the additional pension premium loan repayment
of 120 million euros during Q4 will have a positive
impact on profit before taxes amounting to
approximately 3 million euros in 2024 in the form of
lower net interest costs.
Among industry
sustainability leaders
Finnair is committed to continuously and
systematically developing its operations in every
relevant aspect of sustainability. The company
aims to be among the most sustainable airlines
in the world. To achieve this, the company must
perform visible and effective acts of social and
environmental sustainability, as well as cooperate
closely with its partners and its supply chain. In
order to invest more sustainably, the company
must also ensure that the economic development
of its business supports such investments..
The company’s long-term sustainability target is
to be carbon neutral by 2045. In April 2022, Finnair
committed to cooperating with the Science
Based Targets initiative (SBTi) to bring its emissions
targets in line with the Paris Agreement. SBTi
requires airlines to decarbonise through their
own operations, so it does not take into account
off-industry carbon credits or other market-
based mechanisms such as the ETS. In line with
SBTi’s requirements, Finnair focuses on reducing
the direct emissions of its aircraft. This requires
significant measures to modernise Finnair’s
aircraft, improve operational efficiency and
increase the use of sustainable aviation fuels. The
exact schedule and scope of the measures will be
specified during the year 2024, as Finnair prepares
to submit short-term CO
2
intensity reduction targets
to SBTi for validation in the first quarter of 2024.
Social responsibility is also a key component of the
company’s sustainability work. This means taking
care of the safety and health of its employees
and customers, promoting human rights, equality,
non-discrimination, and diversity in the workplace
and in its value chain, and offering accessible
services.
Finnair – Financial Information 2023 20
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Building a sustainable
balance sheet
In building a sustainable balance sheet, it is
essential to maintain the achieved business
profitability. This strengthens equity and improves
cash flows, which enables debt repayment and –
together with continuous cost efficiency – builds a
sustainable balance sheet. This strategy theme is
also incoporated into other strategy themes.
During 2023, Finnair took many steps towards
building a more sustainable and efficient balance
sheet. In November, it carried out a rights issue of
570 million euros to strengthen its balance sheet
and financial position. With the proceeds, Finnair
repaid the remaining amount of the capital loan
granted by the State of Finland together with total
interests and other fees, totalling 130 million euros,
and repaid an additional tranche of 120 million
euros of its pension premium loan in addition to the
scheduled tranches totalling 200 million euros. It
also purchased six narrowbody aircraft previously
on lease to the company for more than 200 million
euros. Further, Finnair redeemed the 200-million-
euro hybrid bond at the beginning of September,
driven by clearly improved profitability. For the
same reason, it also recognised a total of 145 million
euros of deferred tax assets related to 2020–2022
tax losses.
Adaptable Finnair culture
driven by engaged
people
Throughout Finnair’s 100-year history, the
company and its employees have demonstrated
a remarkable ability to adapt to changing
circumstances and find new, previously untapped
opportunities. This has been particularly
highlighted during and after the twin crises caused
by the pandemic and Russia’s attack on Ukraine
followed by the closure of Russian airspace. Going
forward, the company will focus even more on
nurturing and developing this cultural strength and
will invest in its people to further improve employee
competence, employee and customer experience,
and business results.
Finnair – Financial Information 2023 21
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Financial performance 2019–2023
19 20 21 22 23
Revenue
€ million
2,988.5
3,500
3,000
2,500
2,000
1,500
1,000
500
0
19 20 21 22 23
Number of passengers
thousand
15,000
12,000
9,000
6,000
3,000
0
10,983
19 20 21 22 23
500
400
300
200
100
0
-100
%
Available seat kilometres (ASK) and
revenue passenger kilometres (RPK)
Available seat kilometres (ASK)
Revenue passenger kilometres (RPK)
Available seat kilometres (ASK), % change
Revenue passenger kilometres (RPK), % change
million
50,000
40,000
30,000
20,000
10,000
0
27,626
30.6%
15.5%
36,154
15
10
5
0
-5
-10
-15
-20
%
19 20 21 22 23
Return on capital employed (ROCE)
8.8
19 20 21 22 23
Interest-bearing liabilities
Cash funds
Interest-bearing liabilities and cash funds
€ million
3,000
2,500
2,000
1,500
1,000
500
0
922.0
2,025.6
19 20 21 22 23
Investments cash flow and net cash flow
from operations
Investment cash flow*
Net cash flow from operations
* Including investments and divestments of fixed
assets and group shares.
€ million
-403.7
472.3
600
300
0
-300
-600
-900
-1,200
300
200
100
0
-100
-200
-300
-400
-500
-600
45
30
15
0
-15
-30
-45
-60
-75
-90
%
19 20 21 22 23
Comparable operating result*
Operating result
Comparable operating result*, % of revenue
Financial target: The target level of comparable
operating result percentage of revenue for the
strategy period is 6% by the end of 2025.
* Comparable operating result excluding unrealised
changes in foreign currencies of fleet overhaul
provision, fair value changes of derivatives where
hedge accounting is not applied, sales gains and
losses on aircraft and other transactions, impairment,
exceptional changes in defined benefit pension
plans and restructuring costs.
Comparable operating result
and operating result
€ million
191.4
6.2%
184.0
Finnair – Financial Information 2023 22
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
The year 2023 stands out as a significant year in
Finnair’s history, as the company celebrated its
100th anniversary. The year was also notable in the
sense that, following a challenging double crisis,
the company successfully restored its profitability.
The role of aviation as a fast and global enabler
of connections and as an economic driver lays
the basic need also for the next 100 years. Finnair
is attentive to the sustainable development of the
society around it and the obvious challenge it must
tackle now is how to make sustainable aviation a
reality within the next few decades.
Finnair has begun its long journey as part of the
energy transition to minimise the amount of fossil
energy, but the transition to use cleaner energy
sources will take several decades in aviation.
Nonetheless, Finnair is already setting milestones
for it. Finnair is gradually increasing the volume
of Sustainable Aviation Fuel (SAF) refuelling,
continuously improving energy-efficiency of
flying, and closely monitoring the development
of new hydrogen and hybrid-electric aircraft.
Worldwide, new technologies are advancing at an
accelerating pace, making it crucial to identify and
select the optimal path to achieve Finnair’s target
to fly carbon neutral in 2045.
During 2023, Finnair conducted a double
materiality analysis (DMA) in accordance with
the European Sustainability Reporting Standards
(ESRS), with careful consideration of the disclosure
requirements specified in ESRS 2, as well as the
EFRAG Value chain implementation guidance.
The assessment process consisted of a contextual
analysis (based on Finnair’s previous materiality
assessments), public and certain internal sources,
engagement with stakeholders through interviews
and surveys, internal impact, and financial
materiality assessments, as well as working group
meetings. The results were reviewed and validated
by Finnair’s Executive Board and the process
followed the principles of internal control and
risk management confirmed by Finnair’s Board
of Directors. The DMA was conducted in close
collaboration with a third-party service provider.
As a result of the work, it can be stated that the
material sustainability topics of Finnair include (not
in priority order):
• Energy Consumption and Greenhouse Gas
(GHG) Emissions: Finnair is targeting to fly carbon
neutral in 2045, is actively improving the energy
efficiency of its operations and will set a science-
Non-financial performance in 2023
based target for the next ten years period during
the first quarter of 2024.
• Biodiversity Aspects: Finnair’s climate
commitments extend to ensuring sustainable
aviation fuels are produced with a focus on
minimising harm to ecosystem services.
• Community Impact: The company is actively
increasing the positive effects on people and
communities around it.
• Employee Experience: Motivated, diverse, and
competent employees is the core of Finnair’s
success.
• Consumer Experience: Enhancing the travel
experiences of our consumers and listening
their views are pivotal aspects of the company’s
sustainability strategy.
Finnair – Financial Information 2023 23
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
• Supply Chain Management: Finnair is
implementing systematic measures throughout
its supply chain to ensure responsible sourcing
and operations, considering human rights of
workers in its value chain.
• Business Conduct: Ethical, transparent, and
robust business practices are integral to Finnair’s
operations, aligning with global standards.
• Aircraft Noise: The company recognises the
importance of addressing aircraft noise pollution
and is actively working on mitigating solutions.
• Circular Economics: Finnair is embracing circular
economic principles to minimize waste and
maximize resource efficiency.
• Climate Change Adaptation: Understanding and
adapting to climate change risks are integral to
Finnair’s long-term strategy.
The Audit Committee, nominated by Finnair’s
Board of Directors, ensures that sustainability
is seamlessly integrated into its core business
strategy. The company is committed to the
continuous development of all identified material
topics, supported by comprehensive policies,
robust management processes, stakeholder
engagement, and transparent communication
practices. The company is preparing to publish its
first CSRD-compliant sustainability report in 2025
on the development and status of 2024.
The impacts of the pandemic on Finnair’s
operations were very mild in the second half (H2)
of 2023, although the increase in travel to China
remained slow. On the other hand, the Russian
airspace closure to EU carriers clearly affected
Finnair’s traffic to Asia. During 2023, the risks related
to the double crisis have, however, normalised and
the year can be considered the first reasonable
reference year for the coming years.
Business Conduct
Finnair is committed to complying with
international and national legislation in its
operations and the ethical business principles
laid out in its Code of Conduct and supports the
Sustainable Development Goals (SDG) set by The
United Nations General Assembly.
The Code of Conduct applies to all Finnair
personnel and all locations. Further, Finnair’s
Supplier Code of Conduct address, among
other things, the company’s principles for
ethical procurement, human rights, anti-
bribery and corruption policies, as well as
environmental responsibility. The company
requires that its suppliers comply with ethical
standards that are essentially similar to those
with which Finnair complies within its own
operations. Finnair is working to further integrate
sustainability and ethical business conduct into all
business processes.
Finnair has identified the developments in its value
chain and legislation and has begun to establish a
framework for human rights-related due diligence.
The company is committed to integrating this
due diligence into its business as an ongoing and
iterative programme. Stakeholder engagement,
especially with vulnerable groups, is a crucial part
of this assessment to gain accurate insights from
those who may be affected by the company’s
operations. The company sees human rights due
diligence as a continuous learning journey, not
merely as a checklist. Managing the company’s
business goes beyond mere compliance; it
should reflect a genuine commitment to building
sustainable business that respects and supports
human rights in all its operations.
Human Rights, Bribery
and Anti-Corruption
Finnair respects the UN Universal Declaration
on Human Rights and the core conventions of
the International Labour Organisation (ILO).
The company has signed the United Nation’s
Global Compact initiative and as required by the
Global Compact’s ten principles, the company
aims to prevent any violations of human rights,
including the use of forced or child labour, both
within its own operations and its supply chain.
The company reports annually on the progress
of its operations in accordance with the UN
Communications on Progress requirements.
Finnair’s Code of Conduct includes an anti-
Finnair’s own non-flight
operations (Scope 1 & 2) at
Helsinki-Vantaa are carbon
neutral from the beginning of
2023.
19 20 21 22 23
200
150
100
50
0
Taxes and other environmental costs
€ million
Direct taxes
Indirect taxes collected
Flight ticket taxes
EU ETS costs
Other environmentally related costs
Other environmentally related costs include Noise
and emissions charges.
52.4
48.5
85.8
181.0
121.1
Finnair – Financial Information 2023 24
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
corruption section; the receiving and giving of
bribes is strictly prohibited. Preventing corruption
is everyone’s responsibility at Finnair, including
the heads of business operations, compliance
function and the internal audit.
The direct human rights risks related to the
company’s own operations have not been
assessed to be at a significant level. However,
there may be indirect risks and consequences
associated with the supply chain and outsourced
operations and services. The company’s versatile
supply chain is built around its route network. It
includes suppliers and service providers who are
specializing in airlines and subject to international
aviation regulations, as well as operators
who ensure and enable the safety of Finnair’s
core business.
Suspected human trafficking is a real concern
in aviation, and Finnair has procedures in place
to prohibit it. Finnair has signed IATA’s resolution
against modern slavery and human trafficking. The
company works closely with governments and the
airports it operates from to ensure that all possible
trafficking incidents on its flights are reported
and dealt with appropriately. The crew has been
given specific instructions on the procedures to
be followed in cases where human trafficking
is suspected. Finnair has made IATA’s human
trafficking online training package mandatory for
all crew members and ground agents. Finnair is
committed to increasing its personnel’s awareness
of this issue.
Finnair has a Whistleblowing line called Finnair
Ethics Helpline in use, through which both our
employees and partners can report on concerns
related to ethical business principles. During 2023,
no material incident of material misconduct was
reported through the Finnair Ethics Helpline nor
were there any such investigations ongoing in
the company.
Sustainability Risk Management
The company has implemented a systematic
Enterprise Risk Management (ERM) framework
and process, which is based on the COSO ERM
framework. The process considers all potential
business risks, including sustainability-related risks
and evaluates their potential substantive financial
impacts. When evaluating the risk impact, the
primary criteria used has been strategic impact.
Financial and reputation impacts are used as
assisting criteria for the impact evaluation.
The primary governance principle is adherence
to the Three Lines of Defense model, with a clear
division of roles and responsibilities with respect to
internal control and risk management. The Three
Lines of Defense governance ensures that the
segregation of duties is defined and established
between risk management and risk control. For
more detailed description of the risk management,
please refer to the Risk Management chapter in the
Report of the Boad of Directors.
As part of the double materiality assessment
conducted during the year 2023, the company
updated the impacts, risks, and opportunities
related to environmental, social, and governance
responsibility. As a result of the process, the
company now has a so-called long and short list of
various sustainability topics, associated with both
opportunities and risks. These are managed in
accordance with the company’s risk management
framework and process. External reporting
related to these risks will be further developed in
the year 2024.
Customers, employees,
and other stakeholders
The year 2023 has been characterised by
strong growth and diligent work. Progress has
been made in internal ways of working and in
refining the content and accessibility of services
for customers. The company’s primary goals
continue to be ensuring operational safety and
maintaining clear priorities.
Finnair’s commitment to continuously enhance
the customer experience remains unwavering,
with a consistent application of relevant
accessibility standards. Despite the challenges
presented by the operating environment, there
19 20 21 22 23
Number of persons employed by Finnair at
year-end
8,000
6,000
4,000
2,000
0
5,223
The diversity of the Personnel: Gender
Men:
Employees 44%
Leaders/Managers 72%
Executive Board 67%
Women:
Employees 56%
Leaders/Managers 28%
Executive Board 33%
The diversity of the Personnel: Gender
Men:
Employees 44%
Leaders/Managers 72%
Executive Board 67%
Women:
Employees 56%
Leaders/Managers 28%
Executive Board 33%
Finnair – Financial Information 2023 25
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
has been an increase in the number of customers,
accompanied by a modest decline in Net
Promoter Score (NPS) (35) from the preceding year
(40). While NPS showed a decrease, it is noteworthy
that Finnair’s customers express satisfaction with
the services provided and good arrival punctuality
of flights. During the year, changes were made
in airport services, ticket types, and baggage
policies. These strategic initiatives not only
improved operational efficiency and punctuality
but also played a pivotal role in enhancing our
financial performance, aligning seamlessly with
our overarching strategic direction.
The well-being of Finnair’s employees is a central
focus area of the company. The company is
committed to maintaining the health and safety of
its staff, providing them with learning and training
opportunities, and promoting a workplace culture
that values equality, inclusivity, and diversity. The
company recognises diversity as a key driver of its
performance.
Finnair employed an average of 5,195 (5,336)
people in 2023, which is 2.7 per cent less than in the
comparison period. The number of employees
decreased during 2023 by 7 or 0.1 per cent, totalling
5,223 at the end of December (5,230). In total, 571
new persons were hired at Finnair in 2023. The
increase was mostly due to growth in the number
of Finnair Kitchen employees, pilots and cabin crew
members. The attrition rate for the last 12 months
was 3.8 per cent (7.3). During 2023, the average
number of people at work was 4,818 (4,492).
Full-time staff accounted for 85 per cent (87) of
Finnair employees in 2023, and 92 per cent (97) of
staff were employed on a permanent basis. The
average age of employees was 44 years (43). Of
the personnel, 35 per cent (33) were over 50 years
of age, while 12 per cent (13) were under 30 years of
age. At the end of 2023, 55 per cent (56) of Finnair’s
employees were women and 45 per cent (44)
were men. Four (three) out of the eight members
of Finnair’s Board of Directors are women. Finnair
does not maintain statistics based on ethnicity.
LTIF (Lost Time Incident Frequency), which measures
the frequency of accidents at the company level,
decreased year-on-year and was 5.5 (6.8). Also, the
number of absences due to illness was lower than in
the comparison period and was 4.6 per cent (5.4).
In Finland, employees have a legal right to
freedom of association, and Finnair values good
co-operation with labour unions representing its
various employee groups. In 2023, the following
collective agreements were negotiated:
• An agreement between Palta and Finnish Aviation
Union IAU concerning blue collar employees in
Finnair’s Helsinki Airport customer and ground
service, cargo and technical services. The
agreement is valid until 15 March 2025.
• An agreement between Palta and Workers’
Union AKT concerning travel agencies (Suntours).
The agreement is valid until 30 April 2025.
• An agreement between Finnair Plc and Finnairin
Insinöörit ja ylemmät FINTO ry concerning
Finnair Plc:s upper white-collar employees. The
agreement is valid until the end of February 2026.
In addition, the following previously negotiated
collective agreements are valid:
• An agreement between Palta and Finnish Air Line
Pilots’ Association concerning Finnair Plc’s Finnish
pilots was negotiated in 2021 and it is valid until
the end of September 2024.
• An agreement between Palta and Transport
Workers’ Union AKT representing Finnair’s cabin
crew was negotiated in 2022. The agreement is
valid until the end of January 2025.
• An agreement between Service Sector
Employers Palta Trade Union Pro concerning
Finnair’s technical aviation employees was
negotiated in 2022. The agreement is valid until
the end of January 2025.
• An agreement between Service Sector
Employers Palta Trade Union Pro concerning
Finnair’s aviation employees was negotiated
in 2021. The agreement is valid until the end of
January 2025.
19 20 21 22 23
Lost Time Incident Frequency
LTIF
No/M h
5.5
12
10
8
6
4
2
0
Finnair – Financial Information 2023 26
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Supply chain
The sustainability of the supply chain is very
important in Finnair’s operations, as Finnair
increasingly uses partners and service providers
to maintain and expand its international
route network.
In 2023, the company conducted a comprehensive
screening of indirect emissions, Scope 3, resulting
in the identification of five out of the 15 categories
as significant. The company continues its ongoing
development work related to Scope 3 emissions
accounting and will provide more detailed reports
on these emissions in the coming year’s activities.
The company is in the process of developing
a programme related to the management of
environmental impacts in the supply chain,
aiming to understand and control emissions in its
supply chain. The programme also establishes
a framework for actively sharing and increasing
awareness of Finnair’s Nordic values. It also
guides the selection of key partners from the
approximately 4,500 active suppliers, with whom
efforts are made to systematically improve
the environmental impacts of products and
services. Additionally, the goal is to seamlessly
integrate sustainability into the company’s existing
procurement processes, such as supplier selection
and building customer relationships.
Currently, the company has not set specific
target levels for supplier climate action or other
environmental goals. Social and administrative
aspects are primarily addressed through the
Supplier Code of Conduct (SCoC) and self-
assessment questionnaire forms.
The supply chain directly related to flight
operations must operate according to
international aviation regulations, and these
suppliers are strictly monitored. For example,
international aviation safety regulations require
that all airport employees must be registered and
must always carry an official ID card with them.
This creates a secure basis for activities directly
related to flight operations not being subject to a
significant risk of forced labor or children’s rights.
Environmental
Performance
Finnair has recognised the interconnected
challenges of climate change, biodiversity loss, and
the transition to a circular economy. To address
these challenges, the company has set ambitious
goals across these fronts and encourages
collaborative efforts from all its stakeholders.
Climate Action
Finnair aims to fly carbon-neutral in 2045. In April
2022, Finnair committed to cooperating with the
Science Based Targets initiative (SBTi) to bring its
climate targets in line with the Paris Agreement.
SBTi requires airlines to decarbonise through their
own operations, so it does not take into account
off-industry carbon credits or other market-based
mechanisms such as the EU ETS. In line with SBTi’s
requirements, Finnair now focuses on reducing
the direct emissions of its aircraft. This requires
significant measures to modernise Finnair’s aircraft,
improve operational efficiency and increase the
use of sustainable aviation fuels (SAF). More exact
schedule and the scope of the measures will be
presented during the year 2024 as Finnair prepares
to submit a short-term CO
2
intensity reduction
target for SBTi for validation in the first quarter
of 2024.
For more immediate actions, the company
is committed to achieving carbon neutrality
for its own on-site ground operations in the
Helsinki-Vantaa area (Scope 1 and 2) starting
from 2023. Initiatives include utilising renewable
diesel, improving energy efficiency, introducing
renewable fuel oil, green electricity, green district
heat, and offsetting residual emissions. In 2023,
8,973 tons of residual CO
2
emissions will be offset
using projects consistent with those offered to
customers. During the year 2023, one concrete
action taken was an investment in 2,435 solar
panels, which more than doubled the amount
of solar energy produced by the company.
Thanks to the investment, on a sunny summer day,
Finnair may generate over 1.1 MW peaks (MWp)
921
g CO
2
/RTK
19 20 21 22 23
Development in Finnair's flight emissions
and emission efficiency
Total CO
2
Emissions Efficiency
RTK = revenue tonne kilometres, i.e. capacity use
according to payload weight.
Total CO
2
,
thousand tonnes
4,000
3,200
2,400
1,600
800
0
1,000
800
600
400
200
0
3,028
Finnair reduced 10% of its
own business travel emissions
through SAF.
Finnair – Financial Information 2023 27
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
profitability strategy. In the European Union,
there will be legislative reforms in the near future
(namely the Fit for 55 package) which will increase
EU airlines’ costs and may result in a competitive
advantage for non-EU operators. Finnair has
had continuous and open discussions with both
legislators and other stakeholders about the
appropriate implementation of the changes in
the legislation.
Energy efficiency and Emissions
More than 85 per cent of Finnair’s greenhouse gas
emissions relate to flight operations, burning jet fuel
(Scope 1) plus its production and transportation
(Scope 3). For this reason, the company’s measures
and reporting related to climate change are
focused on this function. In line with the SBTi, the
company’s emission reduction measures will
include investments in new technology aircraft, use
of SAF and operational efficiency improvements.
In 2023, Finnair’s traffic measured in revenue tonne
kilometres (RTK) increased by 23 per cent (117)
compared to 2022, and the company continued
operating to most of its Asian destinations despite
routings that are up to 40 per cent longer. Thus,
direct carbon dioxide emissions from flying (CO
2
)
increased by 21.8 per cent (116) to 3,027,569 tons
(2,486,543). This is still 15.4 per cent less than in year
2019.
During 2023, effective and successful work to
improve fuel efficiency continued. The fuel
efficiency of flying was 292 g/RTK (294) (without
allocation between passengers and cargo), i.e.
fuel efficiency improved by 0.7 per cent (0.5). When
allocating carbon dioxide emissions between
passengers and cargo (see more details on
the allocation principles from the sustainability
appendix) emission efficiencies improved by 1.2
per cent (4.1) passenger related figure being 84.6 g
CO
2
/RPK (85.6) and for cargo 846 g CO
2
/RTK (856).
The improvement in the fuel efficiency was mainly
due to the increase of aircraft load factors from
67,6 per cent to 76.4 per cent. On the other hand,
flying efficiency was weakened by the increased
amount of flights at longer Asia routes.
The company has a cross-organisational
working group focused on fuel efficiency,
which with its actions implemented during 2023
saved approximately 1,760 tons of fuel (5,000)
and thus reduced carbon dioxide emissions by
approximately 5,560 tons (15,750). The actions
included implementing of new in-flight service
concepts as well as optimising of flight operations
(weight savings) and ground operations
supporting reduced speed of flying. The working
group has been active at Finnair for several years
already, and the abovementioned figures do not
take into account the group’s achievements from
previous years.
Total of 2,435 solar panels were
installed on the roofs of Cargo
and Hangar buildings.
during a day. This is sufficient to cover the energy
consumption of the property used by the Finnair
Cargo, on whose roof most of the company’s solar
panels are installed.
SAF shall be any airline’s most important measure
in achieving reasonable emission reductions
during this decade. This is the reason why Finnair
together with the oneworld Alliance has set a
common goal of achieving a 10 per cent level
in SAF uptake by 2030, well above the designed
six per cent EU mandate target. The company
is currently working on a detailed SAF strategy
which will be implemented during 2024. Finnair
used its own SAF programme and decreased its
own business travel emissions by 10 per cent by
purchasing SAF for these journeys.
In 2023, the company used approximately 2,266
tons of SAF, which constituted about 0.2 per cent
of the total kerosene consumption. Of this SAF,
Finnair’s customers partly funded 1,101 tons, the
company voluntarily funded 681 tons, and 483
tons were obtained through national mandates.
Overall, the utilisation of SAF resulted in a reduction
of CO
2
emissions by 6,359 tons, with our customers
contributing 3,106 tons to this reduction. This figure
contains so called life-cycle emissions (LCA).
The biggest risks facing Finnair in this area are
related to the ongoing transition to a green
economy and the effects of the company’s
Finnair – Financial Information 2023 28
Review of
the year 2023
Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
The energy consumption of the Finnair facilities
increased by 3.1 per cent in 2023 (0.5). The total
electricity consumption of the facilities was 22,268
MWh (22,266) and heat consumption 24,755 MWh
(23,316). Total energy efficiency was 21.7 kWh/
m
3
(21.1), including both electricity and district
heat consumptions.
The decrease in electricity consumption was due
to increased operational efficiencies, and the
increase in heating energy may be explained
by a colder winter. CO
2
emissions from energy
consumption in buildings increased by 3.3 per
cent (25,0) to a total of 7,558 (7,339). The growth
was attributed to both the increase in total
energy consumption and the energy companies’
updated practice of reporting more detailed
product-specific emission factors. Finnair has not
utilised renewable energy origin certificates in its
energy procurements.
Circular Economy
Finnair develops its products and services
constantly to be more sustainable. Finnair’s
objective is to introduce circular economy
principles in all its operations by the end of year
2025. This will help the company to make more
efficient use of materials and reduce consumption.
The plan covers the following measures: reducing
material need, reuse of materials when possible,
recycling waste materials, utilisation of waste
in other ways (e.g. as energy) and, finally, safe
disposal of the remaining waste.
The total amount of waste produced by Finnair in
Helsinki hub increased by 20.7 per cent (101.2), or
about 481 tons (925), with the total mass for the year
being 2,320 tons (1,839). The increase in the amount
of waste is directly related to the growth in number
of customers. The largest waste stream has been
mixed waste from the in-flight service, containing
food waste, i.e. international food waste. Food
and beverage waste from international flights has
to be incinerated, due to authority requirements,
while other ordinary food waste is composted. In
2023, approximately 73 per cent (74) of the waste
was utilised as energy and approximately 27 per
cent (26) of the waste material was either reused,
recycled or composted. No waste ended up in
a landfill.
Finnair has set two goals related to efficient
material use. Firstly, the company works on
reducing the total waste generated per passenger
for example by optimising purchases in its catering
operations and by preventive maintenance of
aircraft and aircraft parts in its own maintenance
operations. Secondly, the company works on
recycling the waste that cannot be avoided.
The amount of waste per passenger measured
in our Helsinki hub increased by 11.5 per cent to
0.23 kg per passenger (0.20) still reaching the
company’s target of 0.29 kg per passenger for
2023. Recycling rate at Helsinki hub was 26.7 per
cent (26.1) improving by 2.3 per cent and meeting
the company’s annual target of 25 per cent.
In 2023, the company implemented a process
to reuse cabin and ground crew uniforms.
This ensures that high-quality workwear is not
discarded but rather finds a new user. Since July
2023, thanks to this process, the material required
for staff uniforms was reduced by 10 per cent
during the first six months.
Another initiative to reduce the materials needed
and waste generated is optimising the number
of meals loaded per flight. Finnair encourage
passengers to prebook their onboard meals to
avoid unnecessary over catering. The company
also continuously analyse the meal data to reach
an optimal amount of meals per flight. This work
has already prevented the production, loading,
and disposal of 9,000 unused meals in 2023. These
measures have a positive effect on flight CO
2
emissions also.
Biodiversity
Finnair takes environmental aspects into
consideration on the ground and in the air
operations. Besides the climate actions that reduce
the environmental load, Finnair’s environmental
policy also includes the preservation and
promotion of natural diversity, known as
biodiversity thinking.
In celebration of Finnair’s centenary, it has,
together with Airbus, collaborated with
Snowchange on the Haarasuo peatland-forest
ecosystem restoration in Suomussalmi, Finland.
This 30-hectare site, integral to local communities
and ecological diversity, has undergone
rejuvenation to counteract the impacts of
historical forestry practices. The Haarasuo
restoration is centred around three key objectives:
revitalising peatlands, managing invasive
species, and rehabilitating forest ecosystems.
The ambition is to cultivate a biodiverse habitat,
expecting a revival of indigenous plant and
animal life by 2034, thereby aiding in carbon
capture and contributing to climate change
mitigation. Furthermore, the Haarasuo project
has considerable socio-ecological significance. It
bolsters traditional local practices such as berry
picking and hunting, and rejuvenate aquatic life,
including trout populations.
Finnair has zero tolerance for illegal wildlife trading
and is a United for Wildlife-certified airline. As
such, the company has undertaken to promote
the awareness of different stakeholders about
this topic. Furthermore, Finnair has prohibited the
transportation of hunting trophies or memorabilia
originating from endangered species or their
parts in its cargo network. Also, primates and
canines intended for laboratory, experimental
or other exploitation use will never be accepted
for transport.
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Regulating services have a significant impact on
both the airline business and travel services. The
local decline of biodiversity erodes the operating
conditions of the tourism industry and increases
the risk of infectious diseases.
Aircraft Noise
While the biggest environmental impact of an
airline is its aircraft engine emissions another
easily observed impact is aircraft noise at the
areas surrounding airports. The noise produced by
aircraft is mainly engine noise and aerodynamic
noise. The level of engine noise is greater in
takeoffs, while the level of aerodynamic noise
grows during approaches.
Finnair has continuously, in cooperation with
air traffic control, improved continuous descent
approaches (CDA) at Helsinki-Vantaa airport
reaching 85.8 percent level in 2023. The set target
of maintaining the 85 percent level was then
well achieved.
EU Taxonomy
Background
As a part of its Action Plan for Sustainable Finance,
the European Union is working on a classification
system for determining environmentally
sustainable economic activities, also known as
the EU Taxonomy. The EU Taxonomy Regulation
establishes six environmental objectives: 1) climate
change mitigation, 2) climate change adaptation,
3) the sustainable use and protection of water and
marine resources, 4) the transition to a circular
economy, 5) pollution prevention and control, and
the protection and 6) restoration of biodiversity
and ecosystems.
The EU Taxonomy is constantly evolving, as new
economic activities and environmental objectives
have been gradually added. The first delegated
act of the Taxonomy Regulation concerning
climate change mitigation and adaptation
entered into force on 1 January 2022. Article
8 of the Regulation brought an obligation for
Public-Interest Entities under the Non-financial
Reporting Directive (NFRD), such as Finnair, to
report on their Taxonomy-eligibility for the first
two environmental objectives, climate change
mitigation and adaptation, for the reporting
year 2021. In the reporting year 2022, entities
were also obliged to assess the Taxonomy-
alignment of their economic activities for the first
two objectives. For the reporting year 2023, the
list of economic activities was expanded for the
first two environmental objectives. In addition,
the remaining four environmental objectives
were introduced for certain economic activities.
For 2023, all in-scope Entities are required to
report the proportion of their revenue, capital
expenditure (CapEx) and operating expenditure
(OpEx) that is both Taxonomy-eligible and aligned
with the first two environmental objectives.
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These indicators are defined in the EU Taxonomy
and their definitions differ from those of IFRS for
capital expenditure and operating expenditure.
For the latter four environmental objectives and
the economic activities covered by them, on the
one hand, and for the new economic activities
under the first two environmental objectives, only
Taxonomy eligibility shall be reported.
Finnair’s approach on EU Taxonomy
Finnair has assessed the Taxonomy-eligibility of
its economic activities by comparing their NACE
coding against the economic activities included
in the EU Taxonomy and related criteria. Finnair’s
core business areas consist of passenger traffic,
ancillary sales, cargo and travel services. Of
these, passenger air transport (NACE H51.1, activity
number 6.19) and freight air transport (NACE
H51.21, activity number 6.19) are included in the
list of economic activities contributing to climate
change mitigation from the reporting year 2023
and, thus, Finnair must report a Taxonomy-eligible
share of its revenue, CapEx and OpEx related
to these economic activities. The alignment of
these activities will not be reported until 2024. Of
Finnair’s other core business areas, ancillary sales
and travel services are not, however, yet included
in the Taxonomy’s list of economic activities. The
same applies to freight transport services by road
supplied by Finnair Cargo (activity number 6.6), as
these services are outsourced to a third party and
are, therefore, not considered Taxonomy-eligible.
Revenue
The EU taxonomy definition of revenue is
identical with Finnair Group’s revenue in financial
reporting and, thus, other operating income is
not included in it. As a result of the new economic
activities covering passenger traffic and air cargo
operations, Finnair’s taxonomy-eligible revenue
accounts for 87 per cent (0) of its total revenue.
The share of Taxonomy-aligned revenue of total
revenue is 0 per cent (0), but due to reporting
requirements, the possible Taxonomy-aligned
share of passenger and cargo revenue has not
been defined yet.
Capital expenditure (CapEx)
Capital expenditure definition according to the EU
Taxonomy is the same as gross capital expenditure
reported by Finnair. The share of Taxonomy-eligible
CapEx of total CapEx increased to 83 per cent (1),
and almost all of it was related to the fleet operated
by the company in both passenger and air cargo
operations. Other Taxonomy-eligible CapEx was
related to real estate and related energy solutions.
Despite the installation of more than 2,400 solar
panels (function number 4.1), 0 per cent of Finnair’s
total CapEx was Taxonomy-aligned (0), as
alignment of passenger and air cargo operations
is not yet reported. The solar panel investment
of approximately 1 million euros was deemed as
Taxonomy-aligned CapEx that fulfils the climate
change mitigation criteria, does not cause
significant harm to other environmental objectives
and would also meet minimum safeguards even
though Finnair has not in this case verified the
manufacturing conditions of the solar panels in
accordance with the related recommendations.
Operating expenditure (OpEx)
Operating expenditure, as defined in the
EU Taxonomy, consists of direct research,
development and maintenance costs as well as
short-term leases. The Taxonomy-eligible share of
Finnair’s total Taxonomy-based OpEx increased
to 100 per cent (5), as almost all OpEx were related
to fleet maintenance. Other Taxonomy-eligible
OpEx related to the maintenance of acquired and
owned buildings (activity number 7.7) as well as
short-term leases. During the reporting year 2023,
0 per cent of the total Taxonomy-based OpEx were
Taxonomy-aligned (0), as alignment of passenger
and cargo operations is not yet reported.
In accordance with the Taxonomy reporting
requirements, Finnair has avoided double counting
by ensuring that revenue, CapEx and OpEx have
been allocated only once to an economic activity
and from environmental objectives only to climate
change mitigation. More detailed Taxonomy
figures are presented in the Taxonomy tables on
the following pages.
Finnair has heavily modernised its wide-body fleet
in recent years. In 2015–2017, seven A340 aircraft
were retired from revenue service at Finnair and
since 2015, Finnair has introduced 17 modern, lower
emission A350 wide-body aircraft to its fleet. Of the
disposed A340 aircraft, one was sold for recycling,
two were returned to lessors at the end of their
leases, and four were sold to Airbus in conjunction
with the confirmation of the exercise of Finnair’s
option to purchase eight additional A350 aircraft.
Finnair still has two A350 aircraft on order. The
first is scheduled to be delivered in Q4 2024 and
the second in Q2 2026. This renewal of the wide-
body fleet is the largest single investment in the
company’s history. However, it is not yet defined
whether this forward-thinking investment, partly
made before the Taxonomy implementation, can
be reported within the Taxonomy.
Finnair aims to increase the use of renewable
aviation fuels (SAF) together with the oneworld
alliance and other stakeholders. The oneworld
Alliance has set a common goal of achieving a
10 per cent level SAF uptake by 2030, well above
the 5 per cent mandate proposed by the EU.
Achieving this goal will require a joint effort with
both legislators and various industrial sectors. The
introduction of SAF is also strongly linked to the
protection of biodiversity, i.e. sixth environmental
objective), so that the rapidly growing demand
does not lead, e.g., to increased land use that could
cause harm to biodiversity. Finnair’s SAF usage
of 0.24 per cent in 2023 would not meet the future
Taxonomy minimum of 5 per cent.
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Regarding travel services, the Taxonomy would
focus on the conservation and protection of
nature’s biodiversity if this economic function were
to be included in the Taxonomy. The technical
criteria have been created for accommodation
services, and the need to develop criteria for the
leisure activities management is still pending.
Nature and its diversity are a significant attraction
in the business of Aurinkomatkat. When planning
destination programmes, Aurinkomatkat carefully
assesses their potential impacts on environment
and biodiversity. The aim is to avoid, for example,
organising visits in places where this might pose a
threat or harm to biodiversity
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Proportion of revenue from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
Financial year 2023 2023 Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”)
Economic Activities (1)
Code (2)
Revenue (3)
Proportion of turnover,
year 2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards
(17)
Proportion of
Taxonomy-aligned
(A.1.) or -eligible (A.2.)
revenue, year 2022 (18)
Category enabling
activity (19)
Category transitional
activity (20)
MEUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
TAXONOMY-ELIGIBLE ACTIVITIES
Environmentally sustainable activities (Taxonomy-aligned)
Revenue of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
0 0 0
Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
0
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Passenger and freight air transport 6.19 2,589 87 EL N/EL N/EL N/EL N/EL N/EL
Revenue of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
2,589 87 0
Revenue of Taxonomy-eligible activities (A.1+A.2) 2,589 87 0
TAXONOMY-NON-ELIGIBLE ACTIVITIES
Revenue of Taxonomy-non-eligible activities 400 13
TOTAL 2,988 100%
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
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Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
Financial year 2023 2023 Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”)
Economic Activities (1)
Code (2)
CapEx (3)
Proportion of CapEx,
year 2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards
(17)
Proportion of
Taxonomy-aligned
(A.1.) or -eligible (A.2.)
CapEx, year 2022 (18)
Category enabling
activity (19)
Category transitional
activity (20)
MEUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
TAXONOMY-ELIGIBLE ACTIVITIES
Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic
technology
CCM 4.1 1 0 Y N N N N N Y N/A N/A Y Y Y 0 E
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
1 0 Y N N N N N Y N/A N/A Y Y Y 0
Of which enabling 1 0 Y N N N N N Y N/A N/A Y Y Y 0 E
Of which transitional 0 0 0
Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Passenger and freight air transport CCM 6.19 401 83 EL N/EL N/EL N/EL N/EL N/EL
Acquisition and ownership of buildings CCM 7.7 0 0 EL N/EL N/EL N/EL N/EL N/EL 0
Installation of energy efficient equipment CCM 7.3 0 0 EL N/EL N/EL N/EL N/EL N/EL 0
CapEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
401 83 0
CapEx of Taxonomy-eligible activities (A.1+A.2) 402 83 0
TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities 82 17
TOTAL 484 100%
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
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Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022
Financial year 2023 2023 Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”)
Economic Activities (1)
Code (2)
OpEx (3)
Proportion of OpEx,
year 2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards
(17)
Proportion of
Taxonomy-aligned
(A.1.) or -eligible (A.2.)
OpEx, year 2022 (18)
Category enabling
activity (19)
Category transitional
activity (20)
MEUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
TAXONOMY-ELIGIBLE ACTIVITIES
Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
0 0 0
Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Passenger and freight air transport CCM 6.19 310 97 EL N/EL N/EL N/EL N/EL N/EL
Acquisition and ownership of buildings CCM 7.7 9 3 EL N/EL N/EL N/EL N/EL N/EL 5
OpEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
319 100 5
OpEx of Taxonomy-eligible activities (A.1+A.2) 319 100 5
TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities 1 0
TOTAL 319 100%
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
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Nuclear and fossil gas related activities
Row Nuclear energy related activities
1 The undertaking carries out, funds or has
exposures to research, development,
demonstration and deployment of innovative
electricity generation facilities that produce
energy from nuclear processes with minimal waste
from the fuel cycle.
NO
2 The undertaking carries out, funds or has
exposures to construction and safe operation of
new nuclear installations to produce electricity or
process heat, including for the purposes of district
heating or industrial processes such as hydrogen
production, as well as their safety upgrades, using
best available technologies.
NO
3 The undertaking carries out, funds or has
exposures to safe operation of existing nuclear
installations that produce electricity or process
heat, including for the purposes of district
heating or industrial processes such as hydrogen
production from nuclear energy, as well as their
safety upgrades.
NO
Fossil gas related activities
4 The undertaking carries out, funds or has
exposures to construction or operation of
electricity generation facilities that produce
electricity using fossil gaseous fuels.
NO
5 The undertaking carries out, funds or has
exposures to construction, refurbishment, and
operation of combined heat/cool and power
generation facilities using fossil gaseous fuels.
NO
6 The undertaking carries out, funds or has
exposures to construction, refurbishment and
operation of heat generation facilities that
produce heat/cool using fossil gaseous fuels.
NO
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Performance
Topic Targets and KPIs 2023 2022 Key actions during the reporting period
Environmental responsibility Carbon neutral flying by the end of 2045 (gCO
2
/RTK) 921 928 In the reporting year, Finnair continued its cross-organisational efforts to
improve fuel efficiency, resulting in a reduction of approximately 5,560 tonnes
of CO
2
emissions. The company strives to consistently increase the use of
Sustainable Aviation Fuel (SAF), and in 2023, over 0.2% of the fuel consumption
consisted of SAF, reducing emissions by about 6,360 tonnes.
Improving the fuel efficiency of flying by 1% annually.
Company’s internal Fuel Efficiency Index (nFEI) is used here
as a basis for the KPI where e.g. route distance, wind and
payload impacts are normalised.
-0.7 0.0 The most effective actions included implementation of new in-flight service
concepts and optimisation of flight (weight savings) and ground operations
(reduced speed of flying). On the other hand, growth in number of longer Asian
flights had a negative impact on efficiency.
Reducing food waste per pax, target <0.25kg/pax 0.21 0.20 To reduce waste, the company implemented several enhancements to existing
processes, such as optimising the quantity of meals loaded onboard and
further reducing food waste during the service preparation.
Improving waste recycling at Helsinki-Vantaa site,
target >27% in 2025.
27.0 26.1 Finnair continued the structured work to promote recycling in different units
and for example changed non- recyclable plastic cups with recyclables and
updated the recycling instructions in cabin.
Social responsibility On-time performance % 80.9 79.0 During 2023, changes were made to airport services, ticket types and baggage
policies, among other things. These projects improved operational efficiency
and punctuality, as well as contributed to improved financial performance.
Customer satisfaction, NPS increase on the previous year 35 40
Employee satisfaction, eNPS increase on the previous year -2 -17 The results continue to reflect the burden of the crisis years. Dialogue
between personnel groups has been improved and employee consultation
and involvement have been improved through pulse surveys. In parts of
the organisation, training aimed at understanding diversity and reducing
polarisation was launched.
Absences due to illness, decrease on the previous year 4.6 5.4
LTIF (Lost-time injury frequency) of less than 6.5 5.5 6.8
Ethical Business conduct Code of Conduct awareness grade in WeTogether@Finnair
survey at least 4 on scale 1–5
4.1 3.9 Continuous training of employees in ethical practices.
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During the first quarter, there were no changes in
the company’s management.
On 23 May 2023, Finnair announced that it has
appointed Kaisa Aalto-Luoto as Finnair’s Chief
People Officer and a member of the Executive
Board. Aalto-Luoto started in her new role in
October 2023. Previously, she has worked as Chief
Human Resources Officer at Sanoma Media as
well as Senior Vice President, Human Resources
and Communications in Outotec, and has a long
career in demanding HR management positions
at Outotec and Mandatum Life. Johanna Karppi,
Finnair’s prior Senior Vice President, Human
Resources, continued in her role until October 2023.
On 18 August 2023, Finnair announced that its CEO,
Topi Manner, has given notice of his resignation
Changes in company management
from the company to join Elisa Corporation as their
new CEO, starting at the latest on 1 March 2024.
After the period on 11 January 2024, Finnair
announced that it has appointed Turkka Kuusisto
as CEO of Finnair and he will start in this role on 11
July 2024 at the latest. Kuusisto joins Finnair from
Posti Group Corporation, where he has served as
the CEO since 2020. Prior to his CEO role in Posti
Group Corporation, Kuusisto served in senior
leadership positions in Posti Group Corporation
and in Lindorff Group. Finnair’s previous CEO Topi
Manner left the company on 15 January 2024 to
later take on the role of CEO at Elisa Corporation.
Jaakko Schildt, Chief Operating Officer of Finnair,
acts as an interim CEO between 15 January and the
start of the new CEO.
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Shares and share capital
On 31 December 2023, the number of Finnair
Plc’s shares entered in the Trade Register was
20,481,139,267 (1,407,401,265) and the increase
was explained by the rights issue carried out
in November. The registered share capital was
75,442,904.30 euros. The company’s shares are
quoted on Nasdaq Helsinki. Each share has one
vote at the General Meeting.
Share price development
and trading
Finnair Plc’s market capitalisation was 815.1 million
euros at the end of December (546.4) and the
closing price of the share was 0.04 euros (0.07).
During 2023, the highest price for the Finnair Plc
share on the Nasdaq Helsinki was 0.10 euros, the
Shares and shareholders
lowest price 0.03 euros and the average price 0.06
euros. Some 1,831.4 million company shares, with a
total value of 218.5 million euros, were traded on the
Nasdaq Helsinki exchange.
Shareholders
The number of Finnair Plc’s shareholders increased
by 3.7 per cent in 2023 to 123,036 shareholders
(excluding nominee registered shareholders). The
number of domestic retail shareholders increased
from 116,549 to 120,727, whereas their combined
share of ownership decreased by 19.6 per cent.
Nominee registered or foreign investors held 9.5
per cent (7.6) of all shares.
Flagging notifications
No flagging notices were issued in 2023.
Finnair plc largest shareholders
as at 31 December 2023
Number of
shares % Changes 2023
1 State of Finland, Prime Minister's Office 11,406,710,447 55.7% 10,620,040,761
2 Varma Mutual Pension Insurance Company 582,778,300 2.8% 551,897,037
3 Ilmarinen Mutual Pension Insurance Company 278,850,000 1.4% 264,000,000
4 Elo Mutual Pension Insurance Company 197,450,500 1.0% 189,095,500
5 The State Pension Fund 179,500,000 0.9% 168,500,000
6 Danske Invest Finnish Equity Fund 149,732,799 0.7% 149,732,799
7 Säästöpankki Pienyhtiöt 72,900,000 0.4% 72,900,000
8 Nordea Pro Finland Fund 58,520,178 0.3% 58,520,178
9 Nordea Bank ABP 50,379,683 0.2% 50,379,683
10 Finnair Plc 49,565,650 0.2% 49,166,347
Nominee registered 1,929,299,110 9.4% 1,823,622,849
Others 5,525,452,600 27.0% 5,075,882,848
Total 20,481,139,267 100% 19,073,738,002
Finnair – Financial Information 2023 39
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The Report of the
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Financial
Statements
Government ownership
At the end of 2023, the Finnish Government owned
55.7 per cent of Finnair Plc’s shares and votes.
According to the decision made by the Finnish
Parliament on 20 June 1994, the Government
must own more than half of Finnair Plc’s shares.
Decreasing the ownership below this level would
require revision of the Parliament’s decision.
Share ownership by management
On 31 December 2023, members of the company’s
Board of Directors owned a total of 3,045,000
Finnair Plc’s shares. The CEO Topi Manner owned
10,704,916 shares and the members of the
Executive Board, including the CEO, owned a total
of 24,368,486 shares, representing 0.12 per cent of
all shares and votes.
Own shares
On 31 December 2022, Finnair held a total of
399,303 own shares, representing 0.03 per cent of
the total number of shares and votes.
Based on the share issue authorisation granted by
the Annual General Meeting 2023, Finnair Plc issued
1,324,933 new shares to itself without consideration
on 31 March 2023. Thus, the company held a total of
1,724,236 own shares.
On 3 April 2023, Finnair transferred a total
of 1,324,933 own shares as incentives to the
participants of the FlyShare employee share
savings plan. After that, the company held a total of
399,303 own shares.
19 20 21 22 23
Average price
* A rights offering war implemented in November
2023 and, therefore, Finnair's share prices have
been restated accordingly.
Finnair share 2019–2023*
EUR
0.30
0.25
0.20
0.15
0.10
0.05
0
150
125
100
75
50
25
0
19 20 21 22 23
Finnair
Nasdaq Helsinki
Comparison Nasdaq Helsinki
19 20 21 22 23
150
125
100
75
50
25
0
Finnair
Bloomberg Europe Airline Index
Comparison European Airlines
Based on the share issue authorisation granted
by the Extraordinary General Meeting held on
27 October 2023, Finnair Plc’s issued 60,000,000
new shares to itself without consideration on 24
November 2023. Thus, the company held a total of
60,399,303 own shares.
On 4 December, Finnair transferred a total of
10,833,653 own shares as a reward for the rebuild
incentive plan’s performance period 1 July 2020–30
June 2023 and for the savings periods 2019–2020
and 2020–2021 of the FlyShare share savings plan.
Key Figures – Share
2023 2022 2021 2020 2019
Equity/share* EUR 0.03 0.05 0.06 0.11 0.23
Dividend for the
financial year**
EUR mill. 0 0 0 0 0
Dividend/share* ** EUR 0.00 0.00 0.00 0.00 0.00
Dividend/earnings** % 0.0 0.0 0.0 0.0 0.0
Dividend yield** % 0.0 0.0 0.0 0.0 0.0
Cash flow from
operating activities/
share*
EUR 0.05 0.03 -0.00 -0.17 0.14
P/E ratio 1.77 -1.08 -1.74 -1.47 12.12
* A rights offering was implemented in November 2023 and, therefore,
2019–2022 key figures based on the number of shares have been restated
accordingly.
** The dividend for year 2023 is a proposal of the Board of Directors to the
Annual General Meeting.
Finnair – Financial Information 2023 40
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Breakdown of shares
at 31 December 2023
Number of
shares %
Number of
shareholders %
1–500 4,158,330 0.0 27,043 22.0
501–1,000 6,332,547 0.0 8,176 6.6
1,001–10,000 157,142,501 0.8 37,813 30.7
10,001–100,000 1,357,908,313 6.6 39,684 32.3
100,001–1,000,000 2,417,933,237 11.8 9,726 7.9
1,000,001–10,000,000 1,186,410,766 5.8 561 0.5
10,000,001–100,000,000 626,932,417 3.1 27 0.0
100,000,001–1,000,00,000 1,388,311,599 6.8 5 0.0
1,000,000,001– 11,406,710,447 55.7 1 0.0
Registered in the name of nominee 1,929,299,110 9.4 10 0.0
Total
20,481,139,267
100.0 123,046 100.0
Acquisition and delivery of own
shares and returns of shares Number of shares
Acquisition value, EUR
Average price, EUR
1 January 2019 649,008 4,254,968.65 6.556
2019 164,651 1,042,355.90 6.331
2019 -261,346 -1,501,496.17 5.745
2020 -381,653 -2,701,783.40 7.079
2021 1,800,000 1,144,440.00 0.636
2021 -549,527 -1,350,674.25 2.458
2022 -1,021,830 -649,074.54 0.635
2023 61,324,933 0.00 0.000
2023 -12,158,586 0.00 0.000
31 December 2023 49,565,650 238,736.19 0.005
Shareholders by type
at 31 December 2023
Number of
shares %
Number of
shareholders %
Public bodies 12,661,801,568 61.8 10 0.0
Households 4,678,148,707 22.8 120,727 98.1
Private companies 673,419,371 3.3 1,910 1.6
Financial institutions 497,287,511 2.4 54 0.0
Associations 24,012,137 0.1 65 0.1
Finnish shareholders, total 18,534,669,294 90.5 122,766 99.8
Registered in the name of a nominee 1,929,299,110 9.4 10 0.0
Outside Finland 17,170,863 0.1 270 0.2
Nominee registered and foreign
shareholders, total
1,946,469,973 9.5 280 0.2
Total 20,481,139,267 100.0 123,046 100.0
The shares were transferred to the members of the
executive board who were participants in these
plans. The transfer of the shares was based on the
authorisation given by the Extraordinary General
Meeting held on 27 October 2023.
Finnair retained 49,565,650 own shares at the end
of the period, representing 0.24 per cent of the total
number of shares and votes.
Shareholder agreements
Finnair is not aware of any shareholder
agreements pertaining to share ownership or the
use of voting rights.
Change of control provisions in material
agreements
Some of Finnair’s financing agreements include a
change of control clause under which the financier
shall be entitled to request prepayment of the
existing loan or to cancel the availability of a loan
facility in the event that a person other than the
Finnish state acquires control of Finnair either
through a majority of the voting rights or otherwise.
Finnair – Financial Information 2023 41
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Share-based incentive
schemes
After the period in February 2024, the Board of
Directors of Finnair approved a new individual
performance share plan period covering the years
2024–2026. Within the plan, the participants have
the opportunity to earn Finnair shares as a long-
term incentive reward, if the performance targets set
by the Board of Directors for the plan are achieved.
The potential share rewards will be delivered to the
participants in the spring of 2027. The plan applies
to some 75 persons. It is described in more detail in a
stock exchange release published by the company
and on the company’s website.
Effective authorisations
granted by the Annual
General Meeting 2023
Finnair’s Annual General Meeting was held in
Helsinki on 23 March 2023.
The AGM authorised the Board of Directors to
decide on the repurchase of the company’s own
shares and/or on the acceptance as pledge. The
authorisation shall not exceed 50,000,000 shares,
which corresponds to approximately 3.6 per cent
of all the shares in the company. The authorisation
is effective for a period of 18 months from the
resolution of the AGM.
The AGM also authorised the Board of Directors
to decide on donations up to an aggregate
maximum of EUR 250,000 for charitable or
corresponding purposes. The authorisation is
effective until the next Annual General Meeting.
The resolutions of the AGM are available in full on
the company’s website.
Decisions made by and
authorisations granted
by the Extraordinary
General Meeting 2023
The Extraordinary General Meeting (EGM) of
Finnair Plc was held on 27 October 2023 without a
meeting venue as a virtual meeting in accordance
with Section 11 of the Articles of Association of the
Company and Chapter 5, Section 16 Subsection
3 of the Finnish Companies Act. A total of 222
shareholders representing approximately 61 per
cent of the company’s shares and votes, were
represented in the EGM, either by advance vote or
via remote connection. The EGM adopted all the
proposals of the Board of Directors to the EGM.
Authorising the board of directors to
resolve on a rights offering
In accordance with the proposal of the Board
of Directors, the EGM resolved that the Board of
Directors is authorised to decide on the issuance
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of a maximum of 22,000,000,000 new shares.
The new shares to be issued based on the
authorisation will be offered to the Company’s
shareholders for subscription under pre-emptive
subscription rights in the same proportion as they
already hold shares in the Company. Shares that
remain unsubscribed on the basis of pre-emptive
subscription rights may be offered on a secondary
basis for subscription to other shareholders or third
parties. The Board of Directors is authorised to
decide to whom shares that remain unsubscribed
are offered to. The authorisation can only be used
once, and it does not permit the Board of Directors
to conduct multiple share issues. The Board of
Directors decides on all other terms and conditions
of the share issue. As the rights offering under the
authorisation was carried out in November 2023,
the authorisation is no longer valid.
Authorising the board of directors to
resolve on the issuance of shares
In accordance with the proposal of the Board
of Directors, the EGM resolved that the Board of
Directors is authorised to decide on the issuance
of shares. The maximum number of shares that
may be issued based on the authorisation shall
not exceed 132,935,562 shares, which corresponds
to approximately 0.6 per cent of all the shares in
the Company if the authorisation to issue shares
decided by the EGM for the rights offering above is
used in full. The authorisation is, however, at all times,
limited to 0.6 per cent of the Company’s actual total
number of shares after the rights offering, so that
upon completion of the rights offering the maximum
number of shares that may be issued based on
the authorisation shall be reduced to the nearest
whole number corresponding to 0.6 per cent of the
Company’s total number of shares following the
registration of the new shares to be issued in the
rights offering. The Board of Directors decides on
all conditions of the issuance of shares, including
to whom, at what price and in which manner the
shares are issued on the basis of the authorisation.
The authorisation concerns both the issuance of
new shares as well as the transfer of treasury shares.
Shares may also be issued in deviation from the
shareholders’ pre-emptive rights (directed issue),
e.g., for using the shares to develop the Company’s
capital structure, to finance or carry out acquisitions,
investments or other business transactions, or in
order to use the shares as part of the Company’s
incentive and remuneration schemes. The
authorisation is effective until 23 September 2024,
corresponding to a period of 18 months from the
Annual General Meeting held on 23 March 2023,
and, as it entered into force, revoked the share
issue authorisation granted by the Annual General
Meeting on 23 March 2023. The authorisation was
conditional to the completion of the rights offering
and entered into force as of the registration of the
new shares issued in the rights offering.
The resolutions of the EGM are available in full on
the company’s website.
Finnair – Financial Information 2023 43
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The Report of the
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Financial
Statements
Risk management
Risk management
framework and principles
Finnair operates in a global and highly competitive
environment that is sensitive to economic
fluctuations. In executing its strategy, Finnair and its
operations are exposed to a broad range of risks
and opportunities.
Risk management is an integral part of effective
management practice to ensure that Finnair is
successful in achieving its business objectives.
Uncertainty (opportunity or threat) is an inevitable
element in all decision-making, and thus an integral
component of running the business.
Finnair’s Risk Management Framework has been
defined and established to ensure the identification,
evaluation and management of risks and
uncertainties associated with the set objectives.
The framework is designed to take a corporate-
wide portfolio view of risks. The risk management
principles are summarised as follows:
• Risk management extends beyond internal
control to strategy-setting, governance, and
measuring performance;
• Risks are managed as an integrated part of
strategic and operational planning, day-to-day
decision making, and operational processes;
• Three Lines of Defence model is applied as the
primary governance principle to ensure that the
segregation of duties is defined and established
between risk management and risk control;
• The performance and efficiency of Finnair’s risk
management and internal control systems are
subject to systematic monitoring.
Risk management policy
and process
The framework and principles for risk management
have been defined in the Finnair Internal Control
and Risk Management Policy, which has been
approved by the Board of Directors. The policy is
supplemented by other policies for managing risks
in specific areas. Examples of other risk policies are
Treasury Policy, Procurement Policy, Information
Security Policy, Data Privacy Policy, Competition
Policy, and Trade Sanction Policy.
The Finnair Risk Management Framework and
principles are based on the internationally recognised
best practices for risk management (COSO Enterprise
Risk Management – Integrating with Strategy and
Performance, and ISO 31000:2009 standard).
Risk identification and evaluation include the
following phases:
• Identification of external and internal events
affecting the achievement of objectives;
• Distinction between risks and opportunities;
• Analysis of identified risks;
• Integration (aggregation) of risks;
• Evaluation and prioritisation of risks based on their
impact and likelihood.
Finnair – Financial Information 2023 44
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Risk governance
1st Line of Defence
Business units and shared functions are responsible
for setting the objectives and managing
day-to-day performance. As risk owners, the
business units and shared functions identify and
evaluate risks and make risk-informed decisions.
They manage risks by defining and implementing
controls. Thus, they are responsible for conducting
day-to-day control and risk management activities
in accordance with Finnair’s Risk Management and
Internal Control Frameworks.
As a part of the first line of defence, Finnair’s CEO
and the Finnair Executive Board have the overall
accountability for appropriate risk management
practices.
2nd Line of Defence
Risk & Compliance provides expertise in risk
assessment and risk management, and acts as a
control function that is responsible for developing
and maintaining the Risk Management Framework
and Internal Control Framework as well as for
continuously monitoring the implementation of
the policies, rules, procedures and key controls
within the frameworks. Risk & Compliance has a
reporting line to the Audit Committee of the Board
of Directors.
Outside the scope of the Risk & Compliance
function is Finnair’s statutory Safety Management
System, which is required by Finnair’s Air Operator’s
Certificate and applicable Aviation Regulation
and is subject to specific responsibility matrix
and supervision prescribed by the supervisory
authorities. Safety & Compliance acts as a control
function with respect to the Safety Management
System.
3rd Line of Defence
Internal Audit performs audits and provides the
Audit Committee with an independent assessment
of the overall effectiveness and maturity of the
internal control and risk management systems.
Inform and
communicate
Monitor and
continuously
improve
Control Environment
Identify risks and opportunities
Analyse risks
Integrate risks
Evaluate risks
Control risks
Establish context and set objectives
Risk management process
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Financial
Statements
Significant risks and uncertainties
economic environment, and on Finnair’s network
and profitability. The war in Ukraine has already
significantly impacted the global trade in the
form of sanctions and countersanctions, and as
regards to civil aviation, closures of the airspace.
A possible escalation of the war and unrest in
conflict areas in the Middle East may have adverse
effects on, e.g., the demand for air travel, fuel
prices, the flight network and the use of airspace.
Their negative impact on Finnair’s operating result
and financial position depends on the company’s
ability to adjust its route network, costs, revenue
generating sources and financing in the new
operating environment.
Macroeconomic factors continue to be a key
driver of air transportation demand, as there
has historically been a strong correlation
between air travel and the development of
macroeconomic factors such as GDP. Due to
this correlation, aviation is an industry that is
highly sensitive to global economic cycles and
reacts quickly to external disruptions, seasonal
variations and economic trends, as the global
COVID-19 pandemic and the war in Ukraine
have demonstrated.
The effect of the COVID-19 pandemic in the
markets in which Finnair operates has adversely
affected the demand for Finnair’s services.
Even though the existing travel restrictions are
very limited since China opened for travel, the
uncertainty concerning the travel restrictions,
especially in Asia, poses a risk to demand for air
travel, and consequently to Finnair’s revenue
development. The COVID-19 pandemic may also
have long-term negative effects on air travel
demand due to potential changes in travellers’
perception of the air travel experience and the
perceived uncertainty relating to the current
pandemic or other similar health threats in
the future. The recovery of business travel to
pre-COVID-19 levels is likely to be affected by the
adoption of virtual and teleconferencing tools.
Factors beyond Finnair’s control are related to the
duration of the Russian airspace closure, COVID-19
pandemic and retightening of related travel
restrictions, resource challenges in the European
aviation system caused by the pandemic as
well as the recovery of demand for air travel. In
addition, other general risk factors in the industry
and business, such as the fluctuation of jet fuel
prices and its weakened supply, fluctuation in
In the implementation of its strategy and business,
Finnair is faced with various risks and opportunities.
Finnair has a comprehensive risk management
process to ensure that risks are identified and
mitigated as much as possible, although many risks
are not within the company’s full control. The risks
and uncertainties described below are considered
as potentially having a significant impact on
Finnair’s business, financial result and future
outlook at least for the next 12 months. This list is not
intended to be exhaustive.
Factors such as geopolitical uncertainty, the
threat of trade wars, the threat of terrorism and
cyber-attacks as well as other potential external
disruptions may, if they materialise, significantly
affect Finnair’s operations. Geopolitical tensions
may have an adverse effect on the global
Finnair – Financial Information 2023 46
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The Report of the
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Financial
Statements
demand for air travel in general, and fluctuations
in currency exchange rates, as well as regulatory
and tax changes are also beyond Finnair’s control.
Other general macroeconomic conditions, such as
deterioration in business or consumer confidence,
changing customer preferences or employment
levels, lower availability of credit, rising interest
rates, rise in prevailing high inflation, recession, or
changes in taxation may have an adverse impact
on private consumption, and consequently on the
demand for air travel.
The key factors affecting revenue and operating
result, which Finnair can partially affect, are
operating costs and the volume of production.
Due to the considerable effect of the COVID-19
pandemic, Finnair has carried out an extensive
200-million-euro cost savings programme. The
current inflationary pressure poses a risk to
retaining the cost level achieved.
As jet fuel costs are the largest variable expense
item, the jet fuel price development has a material
effect on profitability. Fuel price fluctuations may
result in increased uncertainty around Finnair’s
financial performance and cash flow. Jet fuel
prices have historically fluctuated significantly,
and fluctuations are expected to continue in
the future e.g., due to the impacts of the war in
Ukraine. Finnair’s ability to pass on the increased
costs of jet fuel to its customers by increasing fares
is limited by the fierce competition in the airline
Finnair – Financial Information 2023 47
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Financial
Statements
Capacity increases and product improvements
among Finnair’s existing or new competitors
may have an effect on the demand for, and yield
of, Finnair’s services. Competition in the airline
industry is intense, and the market situation is
continuously changing as new entrants and/or
alliances expand, industry participants consolidate
and airlines form marketing or operational
alliances, which might gain competitive advantage
over Finnair’s oneworld alliance or its joint
businesses. In addition, the cost base restructurings
of Finnair’s competitors, undertaken in response
to the COVID-19 pandemic and the closure of
Russian airspace, may result in further intensified
competition through, among others, more
aggressive pricing.
Finnair, like other airlines, strives to distribute its
services in increasingly versatile and flexible ways
and at a lower cost by adopting and utilising new
distribution technologies and channels, including
the transition towards the differentiation of fare
content and availability between channels. The
ability to capitalise on the commercial possibilities
provided by these technologies is dependent on,
among others, Finnair’s partners to develop and
implement such applications as well as Finnair’s
ability to generate products and services that
best correspond to customer needs. Hence, the
introduction of new digital distribution technologies
and channels involves implementation, as well as
commercial, risks.
industry. Finnair’s jet fuel costs are also subject
to foreign exchange rate risk as international
prices for jet fuel are denominated in U.S. dollars.
The residual effect of jet fuel price fluctuations is
determined by the hedges in use at a given point
in time. Increasing jet fuel costs, disruptions in fuel
supplies and ineffective hedging in relation to
changes in market prices may result in increased
expenses, which may have a material adverse
effect on Finnair’s business, financial result and
future outlook. Derivatives used to hedge against
adverse price movements in jet fuel may prove
to be inefficient, resulting in an increased jet fuel
price in relation to market prices. The volatile
market impacts the pricing and availability of
hedging instruments. Finnair manages risks related
to fuel costs in accordance with the current risk
management policy.
Retightening of the COVID-19 pandemic related
restrictions, especially in Asia, as well as the
prolongation of the Russian airspace closure
would have an adverse impact on the company’s
profitability, cash funds and equity. Weakened
profitability would also increase the risk of fleet and
other asset impairment.
If the business would become unprofitable again, it
could result in depletion of equity, which may have
an adverse effect on the availability and terms of
new funding.
The aviation industry is affected by a number
of regulatory trends. Estimating the exact
impacts of the regulatory changes on airlines’
operational activities and/or costs in advance
is difficult. Examples of such regulatory trends
include regulation related to emissions trading,
noise regulation and other environmental
regulation, as well as regulations on privacy and
consumer protection.
Finnair is exposed to the risk of operating losses
from natural events, pandemics or health epidemics
and weather-related events, influencing operating
costs and revenue. Outbreaks of epidemics or
pandemics, as COVID-19 has demonstrated, can
adversely affect the demand for air travel and have
a significant effect on Finnair’s operations. Further,
natural hazards arising from climate change, such
as increased extreme weather conditions, including
substantial snowfall, atmospheric turbulence,
earthquakes, hurricanes, typhoons, or severe
thunderstorms, may result in substantial additional
costs to Finnair. Such weather conditions may, for
example, lead to flight cancellations, increased
waiting times, increased fuel consumption as well as
costs associated with aircraft de-icing, which could
lead to additional costs to Finnair and thus, have an
adverse effect on Finnair’s results of operations and
financial condition.
In a changing aviation business environment,
it is difficult to predict the impact that the
COVID-19 and the potential further changes in the
geopolitical situation may have on airline market
access and traffic right opportunities in general.
Potentially increasing protectionism in the political
environment may have an adverse impact on the
market access required for the implementation
of Finnair’s strategy. At the same time, it is also
possible that connectivity needs may increase
in some countries, leading to increasing market
access opportunities and new traffic rights.
General labour market tensions in Finland are
higher than normal, which increases the risk
of indirect strikes and other industrial action.
Depending on their timing, duration and scope,
strikes and other industrial action in Finland and
elsewhere may have a significant adverse impact
on Finnair’s operations and result.
Finnair – Financial Information 2023 48
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The Report of the
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Financial
Statements
Due to the seasonality of the airline business, the
Group’s revenue and result are generally at their
lowest in the first quarter and at their highest in the
third quarter of the year.
In addition to operational activities and market
conditions, the fuel price development has a key
impact on Finnair’s result, as fuel costs are the
company’s most significant variable expense item.
Finnair’s foreign exchange risk arises primarily from
fuel and aircraft purchases, aircraft divestments,
aircraft lease payments, aircraft maintenance
and foreign currency revenue. Significant dollar-
denominated expense items are e.g. fuel costs and
aircraft lease payments. The largest investments,
namely the acquisition of aircraft and related spare
parts, are also mainly denominated in US dollars.
The most significant income currencies after the
Seasonal variation and sensitivities in
business operations
euro are the US dollar, the Japanese yen, the South
Korean won, the Swedish krona, the UK pound, and
the Norwegian krona.
The company hedges its currency, interest rate
and jet fuel exposure using a variety of derivative
instruments, such as forward contracts, swaps and
options, in compliance with the risk management
policy approved annually by the Board of
Directors. Finnair’s risk management policy was
updated during Q4 2023. Before the update Finnair
hedged its fuel purchases 12 months forward on a
rolling basis. The update extends the time horizon
to 18 months on a rolling basis. Also, the hedging
ratios were increased slightly throughout the
hedging horizon. After the update, the maximum
hedging ratio for the first 3-month period is 93
per cent and the lower limit is 68 per cent, while
Sensitivities in business operations, impact on comparable operating
profit (rolling 12 months from date of financial statements) 1 percentage point change
Passenger load factor (PLF, %) EUR 34 million
Average yield of passenger traffic EUR 24 million
Unit cost (CASK excl. fuel) EUR 21 million
Fuel sensitivities
(rolling 12 months from date of financial statements)
10% change,
without hedging
10% change,
taking hedging
into account
Fuel EUR 77 million EUR 49 million
Fuel hedging and average hedged price
(rolling 12 months from date of financial statements)
Hedged fuel,
tonnes*
Average hedge
price, USD/ton* **
Q1 2024 198,000 909
Q2 2024 183,000 878
Q3 2024 144,000 895
Q4 2024 87,000 851
Q1 2025 - -
Q2 2025 - -
Total 612,000 888
* Based on the hedged period, i.e., not hedging related cash flow.
** Average of swaps and bought call options strikes.
Finnair – Financial Information 2023 49
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Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
average hedging ratio is approximately 80 per
cent. The hedging ratio decreases towards the end
of the 18-month hedging period.
Hedging of foreign
currency exposure in
balance sheet
Finnair’s balance sheet includes asset-related
foreign currency exposure due to the recognition
of the present value of qualifying operating lease
Currency distribution, % 2023 2022
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 hedging
10% change taking hedging into
account
EUR 59 58 - - -
USD* 9 8 see below see below see below
JPY 4 4 EUR 12 million EUR 5 million 51%
KRW 3 2 - - -
SEK 3 4 - - -
GBP 4 4 - - -
NOK 3 4 - - -
Other 14 15 - - -
Purchase currencies
EUR 60 55 - - -
USD* 34 41 EUR 62 million EUR 28 million 57%
Other 6 5 - - -
* Hedging ratio and sensitivity analysis for USD basket, which consists of net cash flows in USD and HKD. The sensitivity analysis assumes that the correlation of
the Hong Kong dollar with the US dollar is strong.
liabilities in the balance sheet as right-of-use
assets. Unrealised foreign exchange losses/gains
caused by the translation of the USD denominated
liability will have an impact on Finnair’s net result.
In the future, the effect and amount of the foreign
currency exchange could be positive or negative,
depending on the USD-rate at the closing date.
Finnair has mitigated the foreign exchange
volatility introduced by this difference by using
derivatives as well as by partly investing liquidity
in foreign currency money market funds or other
financial assets where possible. The annual effect
in net result going forward is dependent on the
size of the qualifying operating lease portfolio,
the duration of the leases and hedging ratio. At
the end of December, the hedging ratio of USD
denominated interest-bearing liabilities (including
IFRS 16) was approximately 90 per cent.
Finnair – Financial Information 2023 50
Review of
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Financial
Statements
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Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Outlook
Guidance issued on
24 October 2023:
Finnair reiterates its capacity guidance estimating
that in 2023, it will operate an average capacity of
80–85 per cent, as measured in ASKs, compared
to 2019. The capacity estimate also includes the
agreed wet leases.
Finnair specifies its previous guidance for full-year
2023 revenue and now estimates it to be in the
range of 2.9–3.1 billion euros.
The company also specifies its previous guidance
for full-year 2023 comparable operating result
and now estimates it to be in the range of 160–200
million euros. The company’s comparable
operating result estimate is based on the current
fuel price and exchange rates.
Specific risks related to Finnair’s operating
environment have normalised as the impacts
of the pandemic have faded and the markets
have adapted to the closure of Russian airspace.
However, risks related to the impacts of inflation
and rising interest rates on demand and costs
remain elevated, thus, causing uncertainty in
the operating environment. Also the prevailing
situation in the Middle East causes uncertainty in
the operating environment.
Finnair will update its outlook and guidance in
connection with the financial statements bulletin
for 2023.
New guidance on
14 February 2024:
Global air traffic is expected to continue growing
in 2024. However, risks related to the impact of
inflation and higher interest rates on demand and
costs remain elevated, causing uncertainty in the
operating environment. International conflicts and
global political instability also cause uncertainty
in the operating environment. These factors may
affect the demand for air travel and cargo.
Finnair plans to increase its total capacity by more
than 10 per cent in 2024. The capacity estimate
includes the agreed wet leases. This growth will
mainly focus on Asia and Europe. Finnair’s revenue
is expected to grow at a somewhat slower pace
than capacity in 2024.
In accordance with its disclosure policy, Finnair
provides full-year comparable EBIT estimate in
connection with the half-year report in July.
Finnair will update its outlook and guidance in
connection with the Q1 2024 interim report.
Finnair – Financial Information 2023 51
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Auditor’s
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The Report of the
Board of Directors
Financial
Statements
Performance indicators classified as
alternative performance measures
Alternative performance measures Calculation Reason to use the measure
Items affecting comparability Unrealized changes in foreign currencies of fleet overhaul provisions
+ Fair value changes of derivatives where hedge accounting is not
applied + Sales gains and losses on aircraft and other transactions +
Impairment + Restructuring costs
Component used in calculating comparable operating result.
Comparable operating result Operating result - Items affecting comparability Comparable operating result is presented to better reflect the Group's
business performance when comparing results to previous periods.
Comparable operating result, % of revenue Comparable operating result / Revenue x 100 Comparable operating result is presented to better reflect the Group's
business performance when comparing results to previous periods.
Comparable EBITDA Comparable operating result + Depreciation Comparable EBITDA is presented to better reflect the Group's business
performance when comparing results to previous periods. Comparable
EBITDA is a common measure in airline business which aims to reflect
comparable operating result excluding capital cost.
Comparable EBITDA, % of revenue Comparable EBITDA / Revenue x 100 Comparable EBITDA is presented to better reflect the Group's business
performance when comparing results to previous periods. Comparable
EBITDA is a common measure in airline business which aims to reflect
comparable operating result excluding capital cost.
Equity ratio, % Equity total / Equity and liabilities total x 100 Equity ratio provides information on the financial leverage used by the
Group to fund its assets.
Adjusted interest-bearing liabilities Lease liabilities + Other interest-bearing liabilities + Cross currency
interest rate swaps in derivative financial instruments
Component used in calculating gearing.
Cash funds Cash and cash equivalents + Other financial assets Component used in calculating gearing. Cash funds represent the total
amount of financial assets that are available for use within short notice.
Therefore, cash funds provide the true and fair view of the Group’s
financial position.
Interest-bearing net debt Adjusted interest-bearing liabilities - Cash funds Interest-bearing net debt provides view of the Group’s total external
debt financing.
Gearing, % Interest-bearing net debt / Equity total x 100 Gearing provides view of the level of the Group’s indebtedness.
Finnair uses alternative performance measures referred to in the European Securities Markets Authority (ESMA) Guidelines on Alternative
Performance Measures to describe its operational and financial performance, to provide a comparable view of its business and to enable
better comparability relative to its industry peers. The alternative performance measures do not replace IFRS indicators.
Finnair – Financial Information 2023 52
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Financial
Statements
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Alternative performance measures Calculation Reason to use the measure
Interest-bearing net debt / Comparable EBITDA, LTM Interest-bearing net debt / Comparable EBITDA, for the last twelve
months
The ratio provides information on the Group’s leverage by comparing
the Group’s net debt to the amount of income generated before
covering interest, taxes and depreciation.
Gross capital expenditure Additions in fixed assets + New contracts in right-of-use assets +
Reassessments and modifications in right-of-use assets
Gross capital expenditure provides information on the Group’s
capitalized investments and lease modifications.
Return on capital employed (ROCE), LTM, % (Result before taxes + Financial expenses + Exchange rate gains and
losses, for the last twelve months) / (Equity total + Lease liabilities + Other
interest-bearing liabilities, average of reporting period and comparison
period)
The ratio provides a view to monitor the return of capital employed.
Cash to sales, LTM, % Cash funds / Revenue for the last twelve months x 100 The ratio provides information about the Group’s liquidity in terms of
available cash as a percentage of its sales.
Finnair – Financial Information 2023 53
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Financial
Statements
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Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Reconciliation of performance indicators
classified as alternative performance measures
Equity ratio
EUR in millions, unless otherwise indicated 31 Dec 2023 31 Dec 2022
Equity total 577.0 410.7
Equity and liabilities total 3,698.0 4,133.0
Equity ratio, % 15.6 9.9
Items affecting comparability
Items affecting comparability is reconciled in the note 1.3.7 Items excluded from comparable operating
result.
EUR in millions 2023 2022
Operating result 191.4 -200.6
Unrealized changes in foreign currencies of fleet overhaul provisions -7.1 8.8
Fair value changes of derivatives where hedge accounting is not applied -0.7 -0.9
Sales gains and losses on aircraft and other transactions -13.3 -6.6
Impairment 13.7 32.7
Restructuring costs -0.1 2.6
Comparable operating result 184.0 -163.9
Depreciation 332.6 317.1
Comparable EBITDA 516.5 153.2
Gross capital expenditure
EUR in millions 2023 2022
Additions in fixed assets 409.4 125.8
New contracts in right-of-use assets 24.3 9.5
Reassessments and modifications in right-of-use assets 50.5 64.3
Gross capital expenditure 484.2 199.6
Gearing, interest-bearing net debt and interest-bearing net debt / Comparable EBITDA, LTM
EUR in millions, unless otherwise indicated 31 Dec 2023 31 Dec 2022
Lease liabilities 1,115.0 1,330.7
Other interest-bearing liabilities 910.6 1,298.5
Cross currency interest rate swaps* 8.9 -10.7
Adjusted interest-bearing liabilities 2,034.5 2,618.4
Other financial assets -776.8 -738.6
Cash and cash equivalents -145.1 -785.8
Cash funds -922.0 -1,524.4
Interest-bearing net debt 1,112.5 1,094.0
Equity total 577.0 410.7
Gearing, % 192.8 266.4
Comparable EBITDA, LTM 516.5 153.2
Interest-bearing net debt / Comparable EBITDA, LTM 2.2 7.1
* Cross-currency interest rate swaps are used for hedging the currency and interest rate risk of interest-
bearing loans, but hedge accounting is not applied. Changes in fair net value correlate with changes
in the fair value of interest-bearing liabilities. Therefore, the fair net value of cross-currency interest rate
swaps recognised in derivative assets/liabilities and reported in the note 3.8 Derivatives, is considered an
interest-bearing liability in the net debt calculation.
Finnair – Financial Information 2023 54
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The Report of the
Board of Directors
Financial
Statements
Return on capital employed (ROCE), LTM
EUR in millions, unless otherwise indicated 31 Dec 2023 31 Dec 2022
Result before taxes, LTM 119.1 -370.7
Financial expenses, LTM 142.2 137.9
Exchange rate gains and losses, LTM -13.7 38.8
Return, LTM 247.6 -194.0
Equity total 577.0 410.7
Lease liabilities 1,115.0 1,330.7
Other interest-bearing liabilities 910.6 1,298.5
Capital employed 2,602.5 3,039.8
Capital employed, average of reporting period and comparison
period
2,821.2 3,162.2*
Return on capital employed (ROCE), LTM, % 8.8 -6.1
* Capital employed accounted was EUR 3,284.6 million as at 31 December 2021.
Cash to sales, LTM
EUR million, unless otherwise indicated 31 Dec 2023 31 Dec 2022
Other financial assets 776.8 738.6
Cash and cash equivalents 145.1 785.8
Cash funds 922.0 1,524.4
Revenue, LTM 2,988.5 2,356.6
Cash to sales, LTM % 30.9 64.7
Finnair – Financial Information 2023 55
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Financial
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Proposal on the Dividend
Auditor’s
Report
The Report of the
Board of Directors
Financial
Statements
Other performance indicators
Revenue and profitability
Earnings per share (EPS), basic (Result for the period - Hybrid bond and capital loan expenses net
of tax) / Average number of outstanding shares during the period
Earnings per share (EPS), diluted (Result for the period - Hybrid bond and capital loan expenses net
of tax) / Average number of outstanding shares during the period
taking into account the diluting effect resulting from changing into
shares all potentionally diluting shares
Unit revenue per available seat
kilometre (RASK)
Unit revenue (RASK) represents the Group's revenue divided by
available seat kilometres (ASK).
Unit revenue per revenue
passenger kilometre (yield)
Passenger revenue by product divided by Revenue passenger
kilometres (RPK).
Unit cost per available seat
kilometre (CASK)
Unit cost (CASK) represents the Group's operational costs divided
by available seat kilometres. Other operating income is deducted
from operational costs.
CASK excluding fuel (Comparable operating result - Revenue - Fuel costs) / ASK x 100
Among industry sustainability leaders
Flight CO emissions CO emissions from jet fuel consumption
Adaptable Finnair culture driven by engaged people
Absences due to illness Share of sickness absence hours relating to planned work hours
Lost-time injury frequency The number of workplace accidents per million working hours
Attrition rate, LTM Number of leavers on own request during the last twelve months
compared to active employments on reporting date and leavers
on own request during the last twelve months
Share
Equity/share Equity / Number of outstanding shares at the end of period
Dividend/earnings Dividend per share / Earnings per share (EPS) x 100
Dividend yield, % Dividend per share / Share price at the end of period x 100
Cash flow from operating
activities/share
Net cash flow from operating activities / Average number of
outstanding shares during the period
P/E ratio Share price at the end of period / Earnings per share (EPS) x 100
Traffic
Available seat kilometres (ASK) Total number of seats available × great circle distance in kilometres
Revenue passenger kilometres
(RPK)
Number of revenue passengers × great circle distance in kilometres
Passenger load factor (PLF) Share of revenue passenger kilometres of available seat kilometres
Customer-centric commercial and operational excellence
Net Promoter Score (NPS) Net Promoter Score is based on a question: "Thinking about all
aspects of this journey, how likely would you be to recommend
Finnair to a relative, friend or colleague?" Scale is 0-10: The share
of detractors (ratings 0-6) is deducted from the share of promoters
(ratings 9-10). Result is between +100 and -100.
On-time performance The share of flights arrived less than 15 minutes late
Share of passengers in modern
channels
Share of passengers in Finnair’s direct and modern, digital indirect
channels in relation to total passengers for the period based on
departure date. These channels include Finnair.com, Finnair mobile
app, New Distribution Capability (NDC) solutions, Finnair call
centers, Aurinkomatkat sales and group tool sales.
Finnair – Financial Information 2023 56
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Financial
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The Report of the
Board of Directors
Financial
Statements
How to read Finnair Financial Statements?
Finnair’s financial statements are structured to facilitate reading and
understanding of the financial statements and to clarify the overall picture derived
from it. The notes to the financial statements have been combined to business
related sections, separately listing the accounting principles, critical accounting
estimates and sources of uncertainty in each section. In addition, comments on
interesting figures and other highlights are provided in text areas marked with
a star. The financial statements also include illustrative charts to support the
understanding of the figures.
Notes to the financial statement have been combined into sections based on
their context. The aim is to give a more relevant picture of the Finnair Group and its
business. The content of each section is described and explained in the beginning
of that section and marked with
.
Specific accounting principles are attached to the relevant note. The
accounting principles can be recognised from character
.
Critical accounting estimates and sources of uncertainty have been presented
together with the relevant note and specified with character
.
Highlights related to the section are explained in a separate text box to
underline significant matters.
Financial
Statements
This Financial Information 2023 is not the official version of xHTML document
compliant with the ESEF (European Single Electronic Format) regulation.
The official version of Financial Information 2023 in accordance with ESEF
regulations is available at https://investors.finnair.com/fi.
Finnair – Financial Information 2023 58
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Report
Financial
Statements
59 Consolidated income statement
59 Consolidated statement of comprehensive income
60 Consolidated balance sheet
61 Consolidated cash flow statement
62 Consolidated statement of changes in equity
63 Notes to the consolidated financial statements
63 Accounting principles
63 Company information
63 Basis of preparation
63 Presentation of consolidated income statement and balance sheet
63 Critical accounting estimates and sources of uncertainty
64 Climate-related matters in the consolidated financial statements
64 Changes in accounting principles
65 1 Operating result
65 1.1 Segment information
65 1.2 Operating income
65 1.2.1 Revenue by product and traffic area
66 1.2.2 Revenue by currency
66 1.2.3 Receivables related to revenue
66 1.2.4 Deferred income and advances received
67 1.2.5 Other operating income
67 1.3 Operating expenses
67 1.3.1 Operating expenses by currency
67 1.3.2 Passenger and handling services
67 1.3.3 Property, IT and other expenses
67 1.3.4 Inventories and other current assets
67 1.3.5 Other liabilities
68 1.3.6 Provisions
68 1.3.7 Items affecting comparability
69 1.3.8 Employee benefits
69 1.3.8.1 Employee benefit expenses and share-based payments
72 1.3.8.2 Pensions
74 2 Fleet and other fixed assets and leasing arrangements
74 2.1 Fleet and other fixed assets
76 2.2 Leasing arrangements
78 2.3 Depreciation and impairment
79 3 Capital structure and financing costs
79 3.1 Financial income and expenses
80 3.2 Financial assets
80 3.2.1 Other current financial assets
80 3.2.2 Cash and cash equivalents
80 3.3 Financial liabilities
83 3.4 Contingent liabilities
83 3.5 Management of financial risks
86 3.6 Classification of financial assets and liabilities
87 3.7 Offsetting financial assets and liabilities
87 3.8 Derivatives
89 3.9 Equity-related information
91 4 Consolidation
91 4.1 General consolidation principles
91 4.2 Subsidiaries
91 4.3 Acquisitions and divestments
91 4.4 Investments in joint ventures
91 4.5 Related party transactions
92 5 Other notes
92 5.1 Income taxes
94 5.2 Disputes and litigation
94 5.3 Events after the closing date
95 6 Parent company financial statements
105 Board of directors’proposal on the dividend
106 Auditor’s report
109 Independent Auditor’s Reasonable Assurance Report on
Finnair Plc’s ESEF Financial Statements
Consolidated income statement
EUR mill. Note 2023 2022
Revenue 1.1, 1.2 2,988.5 2,356.6
Other operating income 130.5 153.5
Operating expenses
Staff and other crew related costs 1.3.8 -498.1 -449.6
Fuel costs -898.9 -835.1
Capacity rents -107.2 -102.5
Aircraft materials and overhaul -200.1 -192.4
Traffic charges -233.8 -206.5
Sales, marketing and distribution costs -117.1 -103.1
Passenger and handling services 1.3.2 -414.1 -348.0
Depreciation and impairment 2.3 -346.2 -349.8
Property, IT and other expenses 1.3.3 -112.1 -123.7
Operating result 191.4 -200.6
Financial income 3.1 56.2 6.5
Financial expenses 3.1 -142.2 -137.9
Exchange rate gains and losses 3.1 13.7 -38.8
Result before taxes 119.1 -370.7
Income taxes 5.1 135.2 -105.4
Result for the period 254.3 -476.2
Attributable to
Owners of the parent company 254.3 -476.2
Earnings per share attributable to
shareholders of the parent company, EUR
Basic earnings per share 3.9 0.022 -0.060
Diluted earnings per share 3.9 0.022 -0.060
Consolidated statement of comprehensive income
EUR mill. Note 2023 2022
Result for the period 254.3 -476.2
Other comprehensive income items
Items that may be reclassified to profit or loss in subsequent periods
Change in fair value of hedging instruments -7.7 -13.8
Tax effect 4.2 0.1
Items that will not be reclassified to profit or loss in subsequent periods
Actuarial gains and losses from defined benefit plans 1.3.8.2 11.6 49.9
Tax effect -2.3 -10.0
Other comprehensive income items total 5.8 26.2
Comprehensive income for the period 260.0 -450.0
Attributable to
Owners of the parent company 260.0 -450.0
= Highlights
Finnair – Financial Information 2023 59
Review of
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The Report of the
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Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Consolidated balance sheet
EUR mill. Note 2023 2022
ASSETS
Non-current assets
Fleet 2.1 1,053.0 894.8
Right-of-use fleet 2.2 775.0 932.9
Fleet total 1,828.0 1,827.6
Other fixed assets 2.1 141.8 150.1
Right-of-use other fixed assets 2.2 140.4 145.4
Other fixed assets total 282.2 295.5
Pension assets 1.3.8.2 128.0 120.0
Other non-current assets 3.1 4.5
Deferred tax assets 5.1 234.0 80.6
Non-current assets total 2,475.2 2,328.3
Current assets
Receivables related to revenue 1.2.3 154.4 134.9
Inventories and other current assets 1.3.4 134.6 122.0
Derivative financial instruments 3.8 11.8 23.5
Other financial assets 3.2.1 776.8 738.6
Cash and cash equivalents 3.2.2 145.1 785.8
Current assets total 1,222.8 1,804.8
Assets total 3,698.0 4,133.0
EUR mill. Note 2023 2022
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 75.4 75.4
Other equity 501.5 335.2
Equity total 577.0 410.7
Non-current liabilities
Lease liabilities 2.2, 3.3 951.0 1,128.0
Other interest-bearing liabilities 3.3 790.2 1,058.4
Pension obligations 1.3.8.2 0.8 0.7
Provisions and other liabilities 1.3.6 125.9 186.4
Non-current liabilities total 1,868.0 2,373.5
Current liabilities
Lease liabilities 2.2, 3.3 164.0 202.7
Other interest-bearing liabilities 3.3 120.3 240.1
Provisions 1.3.6 28.1 71.7
Trade payables 107.0 90.3
Derivative financial instruments 3.8 43.4 36.7
Deferred income and advances received 1.2.4 506.7 452.0
Liabilities related to employee benefits 1.3.8.1 116.5 111.2
Other liabilities 1.3.5 167.1 144.4
Current liabilities total 1,253.1 1,348.9
Liabilities total 3,121.0 3,722.4
Equity and liabilities total 3,698.0 4,133.0
= Highlights
Finnair – Financial Information 2023 60
Review of
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The Report of the
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Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Consolidated cash flow statement
EUR mill. 2023 2022
Cash flow from operating activities
Result before taxes 119.1 -370.7
Depreciation and impairment 346.2 349.8
Financial income and expenses 72.3 170.2
Sales gains and losses on aircraft and other transactions -13.3 -6.6
Change in provisions -21.4 45.2
Employee benefits 8.9 12.7
Other adjustments 1.0 2.1
Non-cash transactions -11.5 60.0
Changes in trade and other receivables -30.2 -86.9
Changes in inventories -1.1 -10.1
Changes in trade and other payables 89.4 249.5
Changes in working capital 58.1 152.5
Financial expenses paid, net -98.7 -96.1
Net cash flow from operating activities 472.3 259.0
Cash flow from investing activities
Investments in fleet -400.6 -83.1
Investments in other fixed assets -3.6 -4.9
Divestments of fleet, other fixed assets and shares 0.4 25.5
Lease and lease interest payments received 0.4 0.4
Change in other current financial assets (maturity over 3 months) -60.7 -12.8
Change in other non-current assets 0.0 -0.7
Net cash flow from investing activities -464.0 -75.5
Cash flow from financing activities
Loan repayments -377.4 -144.0
Repayments of lease liabilities -198.1 -193.4
Share issue** 570.4 -
Share issue costs -2.1 -
Hybrid bond repayments -200.0 -
Hybrid bond interests and expenses -20.4 -20.5
Proceeds from capital loan - 400.0
Capital loan repayments** -400.0 -
Capital loan interests and expenses -48.9 -
Net cash flow from financing activities -676.4 42.1
Change in cash flows -668.1 225.6
Liquid funds, at beginning 1,375.6 1,150.0
Change in cash flows -668.1 225.6
Liquid funds, at end* 707.5 1,375.6
* Liquid funds
EUR mill. 2023 2022
Other financial assets 776.8 738.6
Cash and cash equivalents 145.1 785.8
Cash funds 922.0 1,524.4
Other current financial assets (maturity over 3 months) -214.4 -148.8
Liquid funds 707.5 1,375.6
= Highlights
Finnair – Financial Information 2023 61
Review of
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Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Consolidated statement of changes in equity
EUR mill. Share capital
Other
restricted funds
Hedging reserve
and other OCI
items
Unrestricted
equity funds
Retained
earnings Hybrid bond Capital loan Equity total
Equity 1 Jan 2023 75.4 168.1 42.8 763.3 -1,237.0 198.0 400.0 410.7
Result for the period - - - - 254.3 - - 254.3
Change in fair value of hedging instruments - - -3.5 - - - - -3.5
Actuarial gains and losses from defined benefit plans - - 9.3 - - - - 9.3
Other comprehensive income items total - - 5.8 - - - - 5.8
Comprehensive income for the period - - 5.8 - 254.3 - - 260.0
Share issue - - - 570.4 - - - 570.4
Share issue costs - - - -9.5 - - - -9.5
Capital loan repayments - - - - - - -400.0 -400.0
Capital loan interests and expenses - - - - -39.1 - - -39.1
Hybrid bond repayments - - - - - -200.0 - -200.0
Hybrid bond interests and expenses - - - - -18.3 2.0 - -16.3
Share-based payments - - - 0.7 - - - 0.7
Equity 31 Dec 2023 75.4 168.1 48.6 1,325.0 -1,040.2 - - 577.0
EUR mill. Share capital
Other
restricted funds
Hedging reserve
and other OCI
items
Unrestricted
equity funds
Retained
earnings Hybrid bond Capital loan Equity total
Equity 1 Jan 2022 75.4 168.1 16.6 762.0 -744.5 198.0 - 475.7
Result for the period - - - - -476.2 - - -476.2
Change in fair value of hedging instruments - - -13.7 - - - - -13.7
Actuarial gains and losses from defined benefit plans - - 40.0 - - - - 40.0
Other comprehensive income items total - - 26.2 - - - - 26.2
Comprehensive income for the period - - 26.2 - -476.2 - - -450.0
Proceeds from hybrid bond - - - - - 290.0 - 290.0
Conversion of hybrid bond into capital loan - - - - - -290.0 290.0 -
Proceeds from capital loan - - - - - - 110.0 110.0
Hybrid bond interests and expenses - - - - -16.4 - - -16.4
Share-based payments - - - 1.4 - - - 1.4
Equity 31 Dec 2022 75.4 168.1 42.8 763.3 -1,237.0 198.0 400.0 410.7
= Highlights
Finnair – Financial Information 2023 62
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 63
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Critical accounting estimates
Finnair – Financial Information 2023 64
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Content of the section
= Accounting principles
= Critical accounting estimates
Finnair – Financial Information 2023 65
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 66
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Content of the section
Finnair – Financial Information 2023 67
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
= Critical accounting estimates
Finnair – Financial Information 2023 68
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
Finnair – Financial Information 2023 69
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
2020 2021 2022 2023 2024 2025 2026
LTI 2020–2022
LTI 2021–2023
LTI 2023–2025
Fly Share 2020
Fly Share 2021
LTI Rebuild
7/2020–6/2023*
Finnair share-based payment plans
Earnings / savings period Lock-up period Share delivery
* Total incentive rewards cannot exceed 120% of annual base salary in any year,
possible exceeding amount is deferred from 2023 to following years.
Finnair – Financial Information 2023 70
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
• 7/2020–6/2021: comparable EBITDA (40% weight), gearing (40% weight), lost-time injury frequency (10%
• 7/2021–6/2022: comparable EBIT (60% weight), revenue (20% weight), employee retention (10% weight) and
• 7/2022–6/2023: comparable EBITDA (40% weight), net promoter score (NPS, 40% weight), lost-time injury
• 2020–2022 plan: earnings per share (EPS, 50% weight) and unit cost with constant currencies and fuel price
• 2021–2023 plan: earnings per share (EPS, 45% weight), unit cost with constant currencies and fuel price (CASK,
• 2023–2025 plan: operating result.
Finnair – Financial Information 2023 71
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
= Critical accounting estimates
Finnair – Financial Information 2023 72
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 73
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Content of the section
= Accounting principles
Fleet
A321 (15) A320 (10) A319 (5) E190 Norra operated (12) ATR Norra operated (12)
A350 (17) A330 (8)
Narrow-body, 54
Owned, 46 Leased, 33
Wide-body, 25
• New aircraft and engines (fleet) as well as flight simulators (other equipment) on a straight-line basis as follows:
– Airbus A350 fleet, over 20 years to a residual value of 10%
– Airbus A320 and Embraer fleet, over 20 years to a residual value of 10%
– Airbus A330 fleet, over 18 years to a residual value of 10%
– Turboprop aircraft (ATR fleet), over 20 years to a residual value of 10%
• Heavy maintenance, C-checks, APU and landing gear restorations and thrust reversers of aircraft frame, as well
• Cabin components, over 7–20 years
• Rotable spare parts and components, over 15 years to a residual value of 0%
• Buildings, over 10–50 years from the time of acquisition to a residual value of 10%
• Other tangible assets, over 3–15 years
• Computer software, over 3–8 years
Finnair – Financial Information 2023 74
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 75
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
• the amount of the initial measurement of the lease liability;
• any lease payments made at or before the commencement date, less any incentives received;
• any initial direct costs incurred by Finnair; and
• an estimate of costs to be incurred by Finnair in restoring the assets to the condition required by the terms and
= Accounting principles
Finnair – Financial Information 2023 76
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Right-of-use assets 2022
= Accounting principles
= Critical accounting estimates
Finnair – Financial Information 2023 77
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
Finnair – Financial Information 2023 78
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Critical accounting estimates
= Content of the section
= Accounting principles
Finnair – Financial Information 2023 79
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
Finnair – Financial Information 2023 80
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 81
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
2024 2025 2026 2027 2028
JOLCO-loans and other,
fixed interest
JOLCO-loans and other,
variable interest
Bonds, fixed interest
Lease liabilities, fixed interest
Lease liabilities, variable interest
Loans from financial institutions,
variable interest
€ million
Maturity dates of interest-bearing financial liabilities
L a t e r
284.4
860.1
181.2
137.3
453.4
1,000
800
600
400
200
0
113.7
Finnair – Financial Information 2023 82
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 83
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 84
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 85
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 86
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
Finnair – Financial Information 2023 87
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
= Critical accounting estimates
Finnair – Financial Information 2023 88
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Accounting principles
Finnair – Financial Information 2023 89
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 90
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Content of the section
= Accounting principles
Finnair – Financial Information 2023 91
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
= Content of the section
= Accounting principles
= Critical accounting estimates
Finnair – Financial Information 2023 92
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 93
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair – Financial Information 2023 94
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Finnair Plc balance sheet
EUR mill. Note 2023 2022
ASSETS
Non-current assets
Intangible assets 6.11 16.5 20.8
Tangible assets 6.12 81.1 84.1
Investments
Holdings in group undertakings 649.4 649.4
Participating interests 0.0 0.0
Other shares and similar rights of ownership 0.4 0.4
Loan and other receivables 6.14 2.4 2.5
Total investments 6.13 652.2 652.3
Deferred tax assets 6.15 237.1 104.0
Total non-current assets 986.9 861.1
Current assets
Current receivables 6.16 783.4 622.7
Marketable securities 6.17 776.8 738.6
Cash and bank equivalents 6.18 144.3 784.7
Total current assets 1,704.5 2,146.1
TOTAL ASSETS 2,691.4 3,007.2
EQUITY AND LIABILITIES
Equity
Share capital 75.4 75.4
Share premium account 24.7 24.7
Other reserves
Unrestricted equity funds 1,344.4 772.9
Legal reserve 147.7 147.7
Hedging reserve -14.7 -9.9
Retained earnings -1,088.0 -698.7
Capital loan - 400.0
Profit/loss for the financial year 231.5 -350.2
Total equity 6.19 721.0 361.9
Accumulated appropriations 6.20 17.0 18.2
Provisions 6.21 143.7 235.8
Liabilities
Non-current liabilities 6.22 587.7 1,004.3
Current liabilities 6.23 1,222.0 1,387.0
Total liabilities 1,809.6 2,391.2
Equity and liabilities total 2,691.4 3,007.2
6 Parent company financial statements
Finnair Plc income statement
EUR mill. Note 2023 2022
Revenue 6.2 2,830.0 2,241.4
Other operating income 6.3 131.3 159.6
Operating income 2,961.3 2,401.0
Materials and services 6.4 1,573.3 1,423.9
Staff expenses 6.5 343.9 308.6
Depreciation and reduction in value 6.6 10.9 13.1
Other operating expenses 6.7 1,045.0 972.6
Operating expenses 2,973.0 2,718.2
Operating profit/loss -11.7 -317.2
Financial income and expenses 6.8 -41.6 -44.0
Profit/loss before appropriations and taxes -53.3 -361.1
Appropriations 6.9 165.0 127.9
Income taxes 6.10 119.7 -117.0
Profit/loss for the financial year 231.5 -350.2
Finnair – Financial Information 2023 95
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Notes to Finnair Plc financial statements
6.1 Accounting principles
General
Finnair Plc is the parent company in Finnair Group, domiciled in Helsinki, Finland. Financial statements are
prepared in accordance with accounting principles required by Finnish law.
Foreign currency items
Business transactions in foreign currencies have been valued using the exchange rate at the date of transaction.
Receivables and liabilities on the balance sheet date are valued using the exchange rate on the balance
sheet date. Advances paid and received are valued in the balance sheet using the exchange rate at the date
of payment. Exchange rate differences on trade receivables and payables are treated as the adjustments
to turnover and other operating expenses. Exchange rate differences on other receivables and liabilities are
entered under financial income and expenses.
Derivative contracts
According to its risk management policy, Finnair uses foreign exchange, interest rate and commodity derivatives
to reduce the exchange rate, interest rate and commodity risks which arise from the Finnair’s balance sheet
items, currency denominated purchase agreements, anticipated currency denominated purchases and sales
as well as future jet fuel purchases. The balance sheet exposure is hedged only at group level, except for Finnair
Aircraft Finance that has hedged its own exposures. The combined entity-level exposure for all Group companies
differs from the Group-level exposure by the amount of intercompany items. Therefore, the balance sheet
position and contracts hedging it are presented only in note 3.5. of the Group financial statements. Similarly, the
foreign currency cash flow exposure is only hedged at the Group level to take advantage of the netting effect,
and is presented in note 3.5 of the Group financial statements. Derivative contracts are valued using the rates on
the balance sheet date according to Accounting Act 5:2 a §.
The derivatives are initially recognized at original acquisition cost (fair value) in the balance sheet and
subsequently valued at fair value in each financial statement and interim report. The fair values of the derivatives
are based on the value at which the instrument could be exchanged between knowledgeable, willing and
independent parties, with no compulsion to sell or buy in the sales situation.
The fair values of all derivatives are calculated using the exchange rates, interest rates, volatilities and
commodity price quotations on the closing date. The fair values of currency forward contracts are calculated as
the present value of future cash flows. The fair values of currency options are calculated using the Black-Scholes
option pricing model. The fair values of interest rate and currency swap contracts are calculated as the present
value of future cash flows. The fair values of interest rate options are calculated using generally accepted option
valuation models. The fair values of commodity forward contracts are calculated as the present value of future
cash flows. The fair values of commodity options are calculated using generally accepted option valuation models.
Gains and losses arising from changes in the fair value are presented in the financial statements according to
the original classification of the derivative. Gains and losses on derivatives qualifying for hedge accounting are
recognized in accordance with the underlying asset being hedged. At inception, derivative contracts are designated
as future cash flows hedges, hedges of binding purchase contracts (cash flow hedges or fair value hedges) or as
derivatives not meeting the hedge accounting criteria or to which hedge accounting is not applied (economic
hedges). Hedging of the fair value of net investments of foreign units or embedded derivatives have not been used.
At the inception of hedge accounting, Finnair documents the economic relationship and the hedge ratio
between the hedged item and the hedging instrument, as well as the company’s risk management objectives
and the strategy for the inception of hedging. At the inception of hedging, and at least at the time of each
financial statement, Finnair documents and assesses the effectiveness of hedge relationships by examining the
past and prospective capacity of the hedging instrument to offset changes in the fair value of the hedged item
or changes in cash flows. The values of derivatives in a hedging relationship are presented in the balance sheet
items current assets and current liabilities.
Finnair Plc cash flow statement
EUR mill. 2023 2022
Cash flow from operating activities
Result before appropriations -53.3 -361.1
Depreciation 10.9 13.1
Other non-cash transactions -98.0 49.6
Financial income and expenses 41.6 44.0
Changes in working capital 114.7 161.5
Interest and other financial expenses paid -88.0 -76.2
Received interest and other financial income 52.2 13.8
Cash flow from operating activities -19.8 -155.4
Cash flow from investing activities
Investments in intangible and tangible assets -3.6 -2.1
Proceeds from sales of tangible assets 0.0 0.0
Change in loan and other receivables -84.0 3.1
Received dividends 0.0 0.0
Cash flow from investing activities -87.7 1.0
Cash flow from financing activities
Loan repayments and changes -742.9 -232.1
Proceed from share issues* 570.4 -
Proceeds from capital loan - 400.0
Repayment of capital loan* -400.0 -
Capital loan interests and expenses -48.9 -
Received and given group contributions 126.6 244.3
Cash flow from financing activities -494.8 412.2
Change in cash flows -602.3 257.9
Change in liquid funds
Liquid funds, at beginning 1,523.4 1,265.5
Change in cash flows -602.3 257.9
Liquid funds, at end 921.1 1,523.4
* The participation of the State of Finland to the rights issue was paid by offsetting the aggregate subscription
price against a corresponding amount of the principal of the capital loan. The overall offset amount was 318.6
million euros and net proceeds from the rights issue amounted to 251.8 million euros. After the completion of the
rights issue Finnair repaid the remainder of the capital loan of approximately 81.4 million euros, to the State of
Finland.
Finnair – Financial Information 2023 96
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Income taxes
Income taxes in the income statement include taxes calculated for the financial year based on Finnish tax
provisions, adjustments to taxes in previous financial years and the change in deferred taxes.
The deferred tax receivable or liability is calculated for the temporary differences between taxation and the
financial statements using the tax rate confirmed on the closing date. The balance sheet includes the deferred
tax receivable or liability at the amount of the estimated likely receivable.
Pension schemes
The mandatory pension cover of the company’s domestic employees has primarily been arranged through
a Finnish pension insurance company and other additional pension cover through the Finnair pension fund or
a Finnish pension insurance company. Since 1992, the pension fund has no longer accepted employees other
than pilots for additional pension coverage. The Finnair pension fund’s pension obligation is fully covered with
respect to additional coverage. Pension fund liabilities are presented in the notes to the financial statements.
Provisions
Provisions in the balance sheet and entered as expenses in the income statement comprise those items which
the company is committed to covering through agreements or otherwise in the foreseeable future and which
have no corresponding revenue and whose monetary value can be reasonably assessed.
The company is obliged to return leased aircraft at the required redelivery condition. To fulfil these maintenance
obligations the company has recognised provisions based on flight hours flown during the maintenance period.
6.2 Revenue by business area
EUR mill. 2023 2022
Revenue by division
2,830.0 2,241.4
Passenger revenue 2,511.9 1,786.0
Ancillary services 126.4 103.0
Cargo revenue 191.8 352.4
Distribution of turnover by market areas based on flight routes, % of turnover
Finland 6% 6%
Europe 42% 45%
Middle East 7% 2%
Asia 33% 30%
North Atlantic 9% 15%
Unallocated 2% 3%
Total 100% 100%
Since the beginning of 2023, Finnair has reported Middle East as a separate traffic area whereas in 2022, these
figures were still included in the European traffic. Comparison period figures have been adjusted accordingly.
6.3 Other operating income
EUR mill. 2023 2022
Aircraft lease income 81.0 105.4
Other rental income 24.4 22.0
Other income 25.9 32.1
Total 131.3 159.6
Finnair applies the IFRS hedge accounting principles in the hedging of future cash flows (cash flow hedging).
The principles are applied to the foreign currency risk of foreign currency denominated purchases and sales,
the price risk of jet fuel purchases and the price risk of electricity.
The change in the fair value of the effective portion of derivative instruments that fulfil the terms of cash flow
hedging are directly recognised in the fair value reserve of other comprehensive income, to the extent that the
requirements for the application of hedge accounting have been fulfilled. The gains and losses, recognised in
fair value reserve, are transferred to the income statement in the period in which the hedged item is recognised
in the income statement. When an instrument acquired for the hedging of cash flow matures or is sold, or when
the criteria for hedge accounting are no longer fulfilled, the gain or loss accrued from hedging instruments
remains in equity until the forecast transaction takes place. However, if the forecasted hedged transaction is no
longer expected to occur, the gain or loss accrued in equity is immediately recognised in the income statement.
Financial assets and liabilities
Financial assets have been classified into the following categories: amortised cost and fair value through profit and
loss. The classification is made at the time of the original acquisition based on the objective of the business model
and the contractual cash flows of the investment. All purchases and sales of financial assets are recognised on the
trade date. Liabilities are recognised at acquisition cost. Financial assets at fair value through profit and loss as well
as assets and liabilities maturing within 12 months are included in current assets and liabilities. Investments in debt
securities are measured at amortised cost, but only when the objective of the business model is to hold the asset to
collect the contractual cash flows and the asset’s contractual cash flows represent only payments of principal and
interest. Financial assets recognised at amortised cost are valued using the effective interest method. Financial
assets valued at amortised cost include trade receivables, deferred charges and security deposits for aircraft lease
agreements. Due to the nature of short-term receivables and other receivables, their book value is expected to be
equal to the fair value. Derecognition of financial assets takes place when Finnair has lost its contractual right to
receive cash flows or when it has substantially transferred the risks and rewards outside the company.
Finnair recognises credit loss provisions based on lifetime expected credit losses from trade receivables
in accordance with IFRS 9. Finnair has chosen to apply a simplified credit loss matrix for trade receivables as
trade receivables do not have a significant financing component. The expected credit loss model is forward-
looking, and expected default rates are based on historical realised credit losses. The lifetime expected credit
loss allowance is calculated using the gross carrying amount of outstanding trade receivables in each aging
bucket and an expected default rate. The changes in expected credit losses are recognised in other expenses
in the consolidated income statement. The impairment model does not apply to financial investments, such as
bonds and money market funds, included in other financial assets as those are measured at fair value through
profit and loss under IFRS 9, which already takes into account expected credit losses. With respect to the assets
measured at amortised cost, Finnair is actively following such instruments and will recognise impairment
through profit and loss if there is evidence of deterioration in credit quality.
Fixed assets and depreciation
• Buildings, 10–50 years from the time of acquisition to a residual value of 10%.
• Other tangible assets, over 3–15 years
Research and development costs
Except for major software development costs, research and development costs are expensed as they occur.
Research and development of aircraft, systems and operations is conducted primarily by the manufacturers.
Leasing
Lease payments for aircraft are significant. Annual lease payments are treated as rental expenses. Lease
payments due in future years under aircraft lease contracts are presented as off-balance sheet items.
Appropriations
The difference between total and planned depreciation is shown as accumulated appropriations in the
balance sheet and the change during the financial year in the income statement. Appropriations contain also
given and received group contributions.
Finnair – Financial Information 2023 97
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Audit fees in other expenses
EUR mill. 2023 2022
Authorised Public Accountants KPMG KPMG
Auditor's fees 0.4 0.3
Tax advising - 0.0
Other fees 0.2 0.2
Total 0.7 0.5
6.8 Financial income and expenses
EUR mill. 2023 2022
Dividend income
From other companies 0.0 0.0
Total 0.0 0.0
Interest income
From group companies 16.3 8.9
From other companies
Net gains on debt instruments held mandatorily at FVPL 36.3 3.7
Other interest income 16.4 2.7
Total 69.0 15.3
Interest expenses
To group companies -6.5 -
To other companies -57.5 -54.8
Total -64.0 -54.8
Other financial income
Other 3.3 -
Total 3.3 -
Other financial expenses
Revaluation of shares - 4.1
Other -32.3 -28.1
Total -32.3 -23.9
Exchange gains and losses -17.6 19.5
Financial income and expenses total -41.6 -44.0
6.4 Materials and services
EUR mill. 2023 2022
Materials and supplies
Ground handling and catering expenses 280.1 220.8
Fuel costs 899.6 836.0
Aircraft materials and overhaul 275.0 266.3
IT expenses 17.2 14.2
Other items 101.4 86.7
Total 1,573.3 1,423.9
6.5 Staff costs
EUR mill. 2023 2022
Wages and salaries 280.8 236.3
Pension expenses 50.8 45.9
Other social expenses 12.2 26.4
Total 343.9 308.6
Salary and bonus expenses of Chief Executive Officer and Members of the Board
of Directors
Chief Executive Officer and his deputy 2.1 1.2
Board of Directors 0.4 0.4
Personnel on average 3,801 3,979
6.6 Planned depreciation and amortisation
EUR mill. 2023 2022
On other long-term expenditure 6.3 8.5
On buildings 1.2 1.2
On other equipment 3.4 3.3
Total 10.9 13.1
6.7 Other operating expenses
EUR mill. 2023 2022
Lease payments for aircraft 431.4 407.9
Other rents for aircraft capacity 106.7 102.4
Office and other rents 46.3 34.1
Traffic charges 233.8 206.5
Sales and marketing expenses 111.3 95.6
Other expenses 115.4 126.2
Total 1,045.0 972.6
Finnair – Financial Information 2023 98
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
6.12 Tangible assets
Tangible assets 31.12.2023
EUR mill. Land Buildings
Other
equipment
Advances
paid Total
Acquisition cost 1 January 0.7 54.2 60.2 0.3 115.4
Additions - - 1.1 0.8 1.8
Disposals - - -0.4 -0.2 -0.6
Acquisition cost 31 December 0.7 54.2 60.8 0.9 116.6
Accumulated depreciation 1 January - -7.9 -23.5 - -31.4
Disposals - - 0.3 - 0.3
Depreciation and reduction in value - -1.2 -3.3 - -4.5
Accumulated depreciation 31 December - -9.1 -26.4 - -35.5
Book value 31 December 0.7 45.1 34.3 0.9 81.1
The share of machines and equipment
in the book value of tangible assets 31
December 40.7%
Tangible assets 31.12.2022
EUR mill. Land Buildings
Other
equipment
Advances
paid Total
Acquisition cost 1 January 0.7 54.2 59.9 0.8 115.6
Additions - - 0.3 0.3 0.7
Disposals - - -0.1 -0.8 -0.9
Acquisition cost 31 December 0.7 54.2 60.2 0.3 115.4
Accumulated depreciation 1 January - -6.7 -20.2 - -26.9
Disposals - - 0.1 - 0.1
Depreciation and reduction in value - -1.2 -3.3 - -4.6
Accumulated depreciation 31 December - -7.9 -23.5 - -31.4
Book value 31 December 0.7 46.3 36.7 0.3 84.1
The share of machines and equipment
in the book value of tangible assets 31
December 41.4%
6.9 Appropriations
EUR mill. 2023 2022
Change in depreciation difference 1.2 1.2
Received group contribution 163.8 126.6
Total 165.0 127.9
The group contributions received in 2023 relate to 121,9 million euro received from Finnair Aircraft Finance Oy,
18.6 million euro from Oy Aurinkomatkat – Suntours Lth Ab, 9.2 million euro from Finnair Kitchen Oy, 8.8 million
euro from Finnair Technical Services Oy, 2.9 million euro Finnair Cargo Oy, 1.7 million euro from Amadeus Finland
Oy, 0.4 million euro from Finnair Engine Services Oy, 0.2 million euro from Northport Oy and 0.1 million euro from
FTS Financial Services Oy.
6.10 Income taxes
EUR mill. 2023 2022
Income tax for the financial year -17.0 -
Change in deferred taxes 136.8 -117.0
Total 119.7 -117.0
6.11 Intangible assets
EUR mill. 2023 2022
Other long-term expenditure
Acquisition cost 1 January 79.1 84.9
Additions 2.0 2.2
Disposals -9.2 -7.9
Acquisition cost 31 December 71.9 79.1
Accumulated depreciation 1 January -58.4 -57.7
Disposals 9.2 7.8
Depreciation and reduction in value -6.2 -8.4
Accumulated depreciation 31 December -55.4 -58.4
Book value 31 December 16.5 20.8
Intangible assets Total 31 December 16.5 20.8
Finnair – Financial Information 2023 99
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
6.14 Non-current loan and other receivables
EUR mill. 2023 2022
From other companies 2.4 2.5
Total 2.4 2.5
6.15 Deferred tax assets
EUR mill. 2023 2022
Deferred tax assets 1 January 104.0 220.0
From result for the financial year -17.0 -
From temporary differences 4.6 -
From valuation of derivates at fair value 3.7 0.9
Adjustments recognised for taxes of prior periods 141.9 -117.0
Deferred tax assets 31 December 237.1 104.0
The taxable result of Finnair Plc turned profitable in year 2023 and a part of tax losses for 2020–2021 were
utilized. Finnair’s management is continuously monitoring the probability of utilizing deferred tax assets and
considers both positive and negative evidence in the assessment. In the financial year 2023 Finnair fully re-
recognized to its balance sheet a deferred tax assets of 117.0 million euros, which was written down in the
financial year 2022. In addition, to the extent that the positive evidence supported, a deferred tax asset of
26.0 million euros was recognized for part of the tax losses accumulated during 2022. The management has
concluded at the time of the preparation of financial statements, that Finnair’s successful implementation of its
renewed strategy and the re-established pattern of profitability as well as the management forecast of future
taxable profit provide positive evidence about its ability to utilize the unused tax losses and other deductible
temporary differences.
Finnair Plc has not recognised a deferred tax asset of 7.8 million euros for the share of 38.9 million euros of
the confirmed tax loss for the financial year 2022, which expires in 2032. In addition, a deferred tax asset of 13.4
million euros related to interest expenses of 67.1 million euros that are subject to the limitation of the right to
deduct interest expenses, and which do not have a limitation period have not been recognised.
6.13 Investments
EUR mill. 2023 2022
Group companies
Acquisition cost 1 January 649.4 653.6
Revaluation of shares - -4.1
Book value 31 December 649.4 649.4
Associates and joint ventures
Acquisition cost 1 January 0.0 0.0
Book value 31 December 0.0 0.0
Shares in other companies
Acquisition cost 1 January 0.4 0.4
Additions -0.0 0.0
Book value 31 December 0.4 0.4
Associates and joint ventures
Share of
parent
company %
Nordic Regional Airlines AB, Sweden 40.00
Group companies
Share of
parent
company %
Share of
parent
company %
Finnair Cargo Oy, Finland 100.00 Kiinteistö Oy Lentokonehuolto, Finland 100.00
Finnair Aircraft Finance Oy, Finland 100.00 Amadeus Finland Oy, Finland 95.00
Northport Oy, Finland 100.00
Oy Aurinkomatkat - Suntours Ltd Ab,
Finland 100.00
Finnair Technical Services Oy, Finland 100.00 FTS Financial Services Oy, Finland 100.00
Finnair Engine Services Oy, Finland 100.00 Finnair Business Services OÜ, Estonia 100.00
Finnair Kitchen Oy, Finland 100.00
Finnair – Financial Information 2023 100
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
6.18 Cash and bank equivalents
EUR mill. 2023 2022
Funds in group bank accounts and deposits maturing in three months 144.3 784.7
6.19 Shareholder’s equity
EUR mill.
Share
capital
Share
premium
account
Legal
reserve
Hedging
reserve
Un-
restricted
equity
funds
Retained
earnings
Capital
loan
Equity
total
Equity 1.1.2023 75.4 24.7 147.7 -9.9 772.9 -1,048.9 400.0 361.9
Change in fair value
of equity instruments - - - -4.8 - - - -4.8
Share issue - - - - 570.4 - - 570.4
Share-based
payments - - - - 1.1 - - 1.1
Repayment of capital
loan - - - - - - -400.0 -400.0
Capital loan interests
and fees - - - - - -39.1 - -39.1
Result for the financial
year - - - - - 231.5 - 231.5
Equity 31.12.2023 75.4 24.7 147.7 -14.7 1,344.4 -856.5 0.0 721.0
EUR mill.
Share
capital
Share
premium
account
Legal
reserve
Hedging
reserve
Un-
restricted
equity
funds
Retained
earnings
Capital
loan
Equity
total
Equity 1.1.2022 75.4 24.7 147.7 3.7 772.4 -698.7 - 77.4
Change in fair value
of equity instruments - - - -13.6 - - - -13.6
Share-based
payments - - - - 0.6 - - 0.6
Withdrawal of capital
loan - - - - - - 400.0 400.0
Result for the financial
year - - - - - -350.2 - -350.2
Equity 31.12.2022 75.4 24.7 147.7 -9.9 772.9 -1,048.9 400.0 361.9
6.16 Current receivables
EUR mill. 2023 2022
Short-term receivables from group companies
Trade receivables 22.4 18.4
Group contribution receivable 163.8 126.6
Accrued income and prepaid expenses 2.7 2.8
Other receivables 334.6 245.6
Total 523.5 393.4
Short-term receivables from associates and joint ventures
Trade receivables - 0.0
Prepaid expenses 6.7 6.5
Total 6.7 6.5
Short-term receivables from others
Trade receivables 91.0 85.8
Prepaid expenses 84.6 62.9
Derivative financial instruments 11.5 9.6
Other receivables 66.1 64.6
Total 253.2 222.9
Short-term receivables total 783.4 622.7
Accrued income and prepaid expenses
2023 2022
Group contribution 163.8 126.6
Sales accruals 55.8 41.4
Employee related deferred charges and receivables 2.2 0.9
Other prepaid expenses 36.0 29.9
Prepaid expenses total 257.8 198.8
6.17 Investments
EUR mill. 2023 2022
Short-term investments at fair value 776.8 738.6
Finnair – Financial Information 2023 101
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
6.22 Non-current liabilities
EUR mill. 2023 2022
Loans from financial institutions 200.0 400.0
Bonds 382.5 400.0
Hybrid loan - 200.0
Other liabilities 5.2 4.3
Total 587.7 1,004.3
Maturity of interest-bearing liabilies
1–5 years 582.5 800.0
after 5 years - 200.0
Total 582.5 1,000.0
6.23 Current liabilities
EUR mill. 2023 2022
Current liabilities to group companies
Trade payables 114.8 51.1
Accruals and deferred income 18.3 13.8
Group bank account liabilities 166.3 371.7
Total 299.4 436.6
Current liabilities to associates and joint ventures
Trade payables 0.3 0.1
Accruals and deferred income 1.0 1.0
Total 1.3 1.1
Current liabilities to others
Loans from financial institutions 80.0 200.0
Trade payables 91.8 79.7
Accruals and deferred income 739.4 661.5
Other liabilities 10.0 8.2
Total 921.2 949.3
Current liabilities total 1,222.0 1,387.0
Accruals and deferred income
Unflown air transport revenues 394.5 356.2
Jet fuels and traffic charges 50.4 50.9
Holiday payment liability 60.9 56.0
Other employee related accrued expenses 29.8 34.2
Loyalty program Finnair Plus 67.0 51.5
Derivative financial instruments 32.9 21.5
Accrued other charges 94.7 78.0
Other items 28.5 27.9
Total 758.7 676.2
Distributable equity
EUR mill. 2023 2022
Hedging reserve -14.7 -9.9
Unrestricted equity funds 1,344.4 772.9
Retained earnings -1,088.0 -698.7
Received grants - -6.0
Profit/loss for the financial year 231.5 -350.2
Total 473.1 -291.9
During third quarter of 2023, Finnair organised a rights issue to strenghten its financial position. The aim of the
rights issue was reducing Finnair’s financing costs, supporting the implementation of the strategy for sustainable
profitable growth in the new operating environment shaped by the COVID-19 pandemic and the closure of
Russian airspace and ensuring the Company’s ability for future investments. Through the rights issue Finnair also
seeked to reinstate its ability for shareholder distributions.
According to the final results of the rights issue, a total of 19,038,769,224 new shares were subscribed for in
the offering, corresponding to approximately 100.14 per cent of the offer shares, and thus, the offering was
oversubscribed. A total of 18,102,803,535 offer shares were subscribed for pursuant to the exercise of subscription
rights. The remaining 909,609,534 offer shares subscribed for without subscription rights were allocated in the
secondary subscription in accordance with the terms and conditions of the offering. The subscription price was
EUR 0.03 per Offer Share. Gross proceeds of the rights issue were approximately 570.4 million euro, and net
proceeds of the rights issue were approximately 558.2 million euro. Gross and net proceeds include the 318.6
million euro pro rata subscription by the State of Finland through the offset of a corresponding amount of the
capital loan, granted to Finnair by the State of Finland, which did not generate any proceeds in cash to Finnair.
Share and dividends information is available in Financial statements in group note 3.9.
6.20 Accumulated appropriations
EUR mill. 2023 2022
Accumulated depreciation difference 1 January 18.2 19.5
Change in depreciation difference -1.2 -1.2
Accumulated depreciation difference 31 December 17.0 18.2
Accumulated appropriations total 17.0 18.2
6.21 Provisions
EUR mill. 2023 2022
Provisions 1 January 235.8 182.4
Provision for the period 58.5 67.0
Provision used -143.5 -22.5
Exhange rate differences -7.1 8.8
Provisions 31 December 143.7 235.8
Of which long-term 113.9 164.3
Of which short-term 29.8 71.5
Total 143.7 235.8
Provisions contain mostly aircraft maintenance provisions. Long-term aircraft maintenance provisions are
expected to be used by 2035.
Finnair – Financial Information 2023 102
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
6.25 Derivatives
2023 2022
EUR mill.
Nominal
value
Positive
fair
values
Negative
fair
values
Fair net
value
Nominal
value
Positive
fair
values
Negative
fair
values
Fair net
value
Currency derivatives
Jet fuel currency hedging
Operational cash flow hedging
(forward contracts) 389.7 2.0 -5.5 -3.5 284.7 0.1 -7.4 -7.3
Operational cash flow hedging,
bought options 53.3 0.0 - 0.0 - - - -
Operational cash flow hedging,
sold options 48.9 - -0.6 -0.6 - - - -
Hedge accounting items total 491.8 2.0 -6.1 -4.1 284.7 0.1 -7.4 -7.3
Currency derivatives total 491.8 2.0 -6.1 -4.1 284.7 0.1 -7.4 -7.3
Commodity derivatives
Jet fuel forward contracts, tonnes 422,000 5.3 -14.9 -9.6 209,000 3.4 -6.0 -2.5
Bought options, jet fuel, tonnes 255,000 2.6 - 2.6 149,000 4.9 -0.2 4.8
Sold options, jet fuel, tonnes 255,000 - -12.0 -12.0 149,000 0.2 -7.9 -7.8
Hedge accounting items total 7.9 -26.8 -18.9 8.6 -14.1 -5.6
Jet fuel forward contracts, tonnes
Bought options, jet fuel, tonnes 187,000 1.6 - 1.6 149,000 0.9 - 0.9
Items outside hedge accounting
total 187,000 1.6 - 1.6 149,000 0.9 - 0.9
Commodity derivatives total 9.5 -26.8 -17.4 9.5 -14.1 -4.6
Derivatives total* 11.5 -32.9 -21.4 9.6 -21.5 -12.0
*Positive (negative) fair value of hedging instruments on 31 Dec 2023 is presented in the statement of financial position in the
item derivative assets within current assets (derivative liabilities within current liabilities).
6.24 Collateral, contingent liabilities and other commitments
EUR mill. 2023 2022
Guarantees and contingent liabilities
On behalf of group companies 51.5 52.5
Total 51.5 52.5
Aircraft lease payments
Within one year 412.9 379.9
After one year and not later than 5 years 1,169.5 1,117.7
Later than 5 years 527.9 517.7
Total 2,110.3 2,015.3
Parent company has leased the aircraft fleet from the fully owned subsidiary.
Other lease payments
Within one year 16.2 26.3
After one year and not later than 5 years 86.9 65.0
Later than 5 years 174.5 158.7
Total 277.6 250.0
Pension obligations
Total obligation of pension fund 301.4 321.3
Non-mandatory benefit covered -301.4 -321.3
Total - -
Capital loan
Accrued interest from capital loan - 9.1
Other accrued fees from capital loan - 6.9
Total - 16.0
Finnair withdrew 290 million euros of hybrid bond on 22 June 2022, which was converted into capital loan on 30
June 2022 with the decision by plenary session of the Government. The remaining 110-million-euro amount of the
capital loan was withdrawn on 2 September 2022. Therefore Finnair drew down the entire amount of 400 million
euros during 2022. The capital loan was booked to the parent company’s equity as its own tranche.
In Finnair’s rights offering of approximately 558 million euros executed in November 2023, the State of Finland
subscribed for its pro rata share of the new shares on the basis of subscription rights allocated to it. The State of
Finland paid the subscription price of the shares by offsetting it against a corresponding amount of the principal
of the capital loan. This totaled 318.6 million euros. Finnair repaid the remainder of the capital loan, i.e. 81.4 million
euros, on 24 November 2023 to the State of Finland. In addition, Finnair paid the related interest and other fees
of 48.9 million euros to the State.
Finnair – Financial Information 2023 103
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
6.26 Financial assets and liabilities measured at fair value
Fair value hierarchy of financial assets and liabilities valued at fair value
Fair values at the end of the reporting period
EUR mill. 2023 Level 1 Level 2
Financial assets at fair value
Securities held for trading 776.8 723.4 53.4
Derivatives
Currency derivatives 2.0 - 2.0
- of which in cash flow hedge accounting 2.0 - 2.0
Commodity derivatives 9.5 - 9.5
- of which in cash flow hedge accounting 7.9 - 7.9
Total 788.3 723.4 64.9
Financial liabilities at fair value
Derivatives
Currency derivatives 6.1 - 6.1
- of which in cash flow hedge accounting 6.1 - 6.1
Commodity derivatives 26.8 - 26.8
- of which in cash flow hedge accounting 26.8 - 26.8
Total 32.9 - 32.9
6.27 Fuel price risk in flight operations
Timing of the notional and hedged price
Maturity
31 December 2023
Hedged price
$/tonne
Notional
amount (tonnes) Under 1 year 1 to 2 years
Jet fuel consumption priced with NWE index
892.1 655,264 626,264 29,000
Jet fuel consumption priced with SING index
918.3 21,736 21,736 -
Foreign exchange risk
Maturity
Timing of the notional
EUR mill.
31 December 2023
Average exchange rate
of hedging instruments
against the euro
Notional
amount (gross) Less than 1 year
USD 1.1 422.1 422.1
JPY 152.1 69.8 69.8
Cross-currency interest rate swaps are included in the nominal amount calculation.
Finnair – Financial Information 2023 104
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Auditor’s
Report
Financial
Statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Board of directors’proposal on the dividend
Finnair Plc’s distributable equity on 31 December 2023 amounts to 473,123,719.36 euros, of which the net result for
the financial year 2023 is 231,458,763.52 euros.
The Board of Directors proposes to the Annual General Meeting that no dividend be paid based on the balance
sheet to be adopted for the financial year, which ended on 31 December 2023, and the result be retained in the
equity.
Signing of the Report of the Board of Directors and the Financial Statements
Helsinki, 13 February 2024
The Board of Directors of Finnair Plc
Sanna Suvanto-Harsaae Tiina Alahuhta-Kasko Montie Brewer
Jukka Erlund Hannele Jakosuo-Jansson Henrik Kjellberg
Simon Large Minna Pajumaa
Jaakko Schildt
Interim CEO of Finnair Plc
Finnair – Financial Information 2023 105
Review of
the year 2023
The Report of the
Board of Directors
Auditor’s
Report
Financial
Statements
Board of Directors’
Proposal on the Dividend
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Auditor’s report (This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.)
To the Annual General Meeting of Finnair Plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Finnair Plc (business identity code 0108023-3) for the year ended
31 December 2023. The financial statements comprise the consolidated balance sheet, income statement,
statement of comprehensive income, statement of changes in equity, statement of cash flows and notes,
including material accounting policy information, as well as the parent company’s balance sheet, income
statement, statement of cash flows and notes.
In our opinion
— the consolidated financial statements give a true and fair view of the group’s financial position, financial
performance and cash flows in accordance with IFRS Accounting Standards as adopted by the EU
— the financial statements give a true and fair view of the parent company’s financial performance and
financial position in accordance with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good
auditing practice are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent
company and group companies are in compliance with laws and regulations applicable in Finland regarding
these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of
regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note 1.3.3 to the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Materiality
The scope of our audit was influenced by our application of materiality. The materiality is determined based on
our professional judgement and is used to determine the nature, timing and extent of our audit procedures and
to evaluate the effect of identified misstatements on the financial statements as a whole. The level of materiality
we set is based on our assessment of the magnitude of misstatements that, individually or in aggregate, could
reasonably be expected to have influence on the economic decisions of the users of the financial statements.
We have also taken into account misstatements and/or possible misstatements that in our opinion are material
for qualitative reasons for the users of the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. The significant risks of material misstatement referred to in the EU Regulation No 537/2014
point (c) of Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of
whether there was evidence of management bias that represented a risk of material misstatement due to fraud.
The key audit matter How the matter was addressed in the audit
Financial position and funding arrangements
(Refer to Accounting principles for consolidated financial statements and Notes 3.3, 3.5 and 3.9)
At the end of the financial year consolidated liquid funds
amounted to € 708 million and interest-bearing liabilities
€ 2,026 million, of which € 284 million will mature during
2024. The equity amounted to € 577 million.
To strengthen its balance sheet Finnair continued
executing several financing transactions including
rights issue, conversion and repayment of capital loan,
repayment of hybrid bond and pension loans as well as
several fleet related transactions.
Financial position and funding arrangements are
considered a key audit matter as funding arrangements
have significant impact on the cash flows and financial
position as well as the view given of those in the
consolidated financial statements.
With the involvement of KPMG IFRS specialists, we
assessed the terms of the funding arrangements and
the impacts on classification and recognition in relation
to accounting principles and accounting standards
applied in the consolidated financial statements.
Our procedures have included assessing the
accounting treatment of financial transactions as well
as comparing the changes in equity to the terms and
proceeds of the rights issue.
We have also reconciled the balance sheet values of
financial transactions to external confirmations at the
balance sheet date.
In addition, we assessed the appropriateness of the
disclosures provided on the financing arrangements
and financial position.
Finnair – Financial Information 2023 106
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Financial
Statements
Auditor’s
Report
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
The key audit matter How the matter was addressed in the audit
Fleet valuation
(Refer to Accounting principles for consolidated financial statements and Note 2)
The Group has own aircraft and right of use aircraft
with total carrying value of € 1,828 million representing
49 % of total consolidated assets. Finnair purchased
nine leased narrowbody aircrafts during the financial
year. The aircraft-related depreciation charge was
€ 296 million.
The evaluation of the expected useful life of the
components of the aircraft, the expected residual
value, impairment of existing aircraft and assessment
of whether onerous contract exists related to the future
committed aircraft purchases requires a significant
degree of management judgement.
The valuation of the fleet is considered as a key
audit matter due to the significance to the Group’s
consolidated statement of financial position, due to
management judgement involved in forecasting future
cash flows.
We assessed the reasonableness of assumptions
made for useful lives, components and residual values
regarding owned and leased aircraft and reconciled
these assumptions against carrying values of aircraft
components and associated depreciations recorded in
the income statement.
Our audit procedures, with the involvement of KPMG
valuation specialists, included testing the integrity of
the calculations and the technical model. We have
challenged the assumptions used in impairment testing
and their reasonableness by comparing against
external industry market data, budgets approved by
the Board of Directors and our own views.
We have also assessed the appropriateness of the
related disclosures.
Valuation of deferred tax assets for unused tax losses
(Refer to Accounting principles for consolidated financial statements and note 5.1)
As a result of the prolonged COVID-19 pandemic and
Ukrainian war Finnair recorded tax losses amounting
to € 1.3 billion in 2020-2022. In the financial year 2023,
Finnair recognized to its balance sheet deferred tax
assets of € 126 million related to tax loss carryforwards.
The total balance of deferred tax assets arising from tax
losses amounts to € 220 million.
Deferred tax assets are recognized to the extent that
it is probable that they can be utilized against taxable
profit in the future. The valuation of deferred tax assets is
based on management’s estimate of the future taxable
profits which will be generated before the unused tax
losses expire.
Valuation of deferred tax assets for unused tax losses
is considered a key audit matter due to the high level
of management judgement involved in preparation of
forecasts of future taxable profits and the significance
of carrying amounts.
We assessed the appropriateness of the methodology
adopted by Finnair to identify existing tax loss carry
forwards that will be utilized. To determine the
recognition threshold of the deferred tax assets for
unused tax losses we assessed the forecasting process
by examining the procedure for preparing the taxable
income forecasts used as a basis for estimates and
by comparing income forecasts for prior years with
actual results.
We evaluated the appropriateness of key assumptions
used in the forecasts and compared them with the ones
adopted for non-current asset impairment tests.
We also challenged the degree of the probability
and accuracy of the available future taxable profits
taking into consideration the positive and negative
evidence and their individual significance for the overall
assessment and examined their plausibility.
In addition, we assessed the appropriateness of
the disclosures relating to deferred tax assets in
accordance with IFRS.
The key audit matter How the matter was addressed in the audit
Deferred passenger revenue
(Refer to Accounting principles for consolidated financial statements and Note 1.2.4)
The deferred passenger revenue amounted to € 507
million. Passenger ticket sale is presented as deferred
income in the consolidated statement of financial
position from the point of sale until the flight is flown
and the sale is recognized as revenue. Recognition of
unused tickets as revenue is based on the expected
breakage amount of tickets remaining unused. The
points earned in the customer loyalty program are
measured at fair value and recognised as a decrease
of revenue and debt at the time when the points-
earning event is recognised as revenue or when the
points expire.
Large volumes of transactions flow through various
computer systems from the date of sale until revenue
is recognized in the consolidated statement of profit or
loss. The recording process is complex, which gives rise
to inherent risk of error, in determining the amount and
timing of the revenue recognition.
Due to the significant volume and manual adjustment
related to the recognition of passenger revenue,
deferred passenger revenue is determined a key
audit matter.
We obtained an understanding of revenue recognition
process. We used data analytics tools for identifying
revenue flows and risks in revenue recognition of ticket
sales and focused our audit on key risks identified.
Further, we used data analyses in testing deferred
revenue of unflown tickets.
We evaluated the design and tested the operating
effectiveness of key controls over revenue recognition.
We tested the mathematical accuracy and input data
of the calculation used to recognize revenues from the
breakage model. We also analysed the assumptions
used in the revenue recognition of the customer
loyalty program.
We tested a sample of passenger revenue
recognized as well as a sample of unused tickets in
the deferred revenue.
Aircraft maintenance provision
(Refer to Accounting principles for consolidated financial statements and Note 1.3.6)
The Group operates aircrafts which are owned or
held under lease agreement. The Group is obliged to
return leased aircraft and their engines according to
the redelivery condition set in the lease agreement.
To fulfil these maintenance obligations, the Group
has recognised airframe heavy maintenance, engine
performance maintenance, engine life limited part and
other material maintenance provisions amounting to
€ 144 million.
The measurement of aircraft maintenance provisions
requires management judgement especially related
to timing of maintenance events and valuation of
maintenance costs occurring in the future. The future
maintenance costs and their timing are dependent
on, for example, how future traffic plans realise, the
market price development of maintenance costs and
the actual condition of the aircraft at the time of the
maintenance event.
We identified aircraft maintenance provision as a
key audit matter due to the inherently complex model
and management judgement incorporated in the
assumptions used in the calculation.
We obtained an understanding of the process by which
the lease agreements are analysed and recorded in the
maintenance model and by which the variable factors
within the provision are estimated.
We evaluated the appropriateness of the maintenance
provision model and challenged the key assumptions
used such as expected timing and cost of maintenance
checks.
We obtained and inspected a sample of asset lease
agreements to evaluate the completeness of the
restoration and return liabilities for obligations at the
redelivery at the end of the lease.
We tested the input data and mathematical accuracy
of the calculations as well as recalculated the
maintenance provision by using data analysis tools.
In addition, we performed retrospective analysis on the
accuracy of the provision.
Finnair – Financial Information 2023 107
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Financial
Statements
Auditor’s
Report
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the
EU, and of financial statements that give a true and fair view in accordance with the laws and regulations
governing the preparation of financial statements in Finland and comply with statutory requirements. The
Board of Directors and the Managing Director are also responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible
for assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going concern basis of accounting. The financial
statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the
parent company or the group or cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with good auditing practice will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the financial
statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
parent company’s or the group’s internal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
— Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going
concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the parent company or the group to cease to continue
as a going concern.
— Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events so that the financial
statements give a true and fair view.
— Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our
audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence and communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting on May 29, 2020, and our appointment
represents a total period of uninterrupted engagement of four years.
Other Information
The Board of Directors and the Managing Director are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual Report
but does not include the financial statements or our auditor’s report thereon. We have obtained the report of
the Board of Directors prior to the date of this auditor’s report, and the Annual Report is expected to be made
available to us after that date. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
With respect to the report of the Board of Directors, our responsibility also includes considering whether the
report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in
the financial statements and the report of the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Other opinions
We support that the financial statements and the consolidated financial statements should be adopted. The
proposal by the Board of Directors regarding the treatment of distributable funds is in compliance with the
Limited Liability Companies Act. We support that the Members of the Board of Directors of the parent company
and the Managing Director should be discharged from liability for the financial period audited by us.
Helsinki, 13 February 2024
KPMG OY AB
KIRSI JANTUNEN
Authorized Public Accountant, KHT
Finnair – Financial Information 2023 108
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Financial
Statements
Auditor’s
Report
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Independent Auditor’s Reasonable Assurance Report
on Finnair Plc’s ESEF Financial Statements
To the Board of Directors of Finnair Plc
We have undertaken a reasonable assurance engagement in respect of whether the consolidated
financial statements for the year ended 31 December, 2023 included in the digital financial statements
213800SB6EOB8SSK9W63-2023-12-31-en.zip of Finnair Plc (Business ID 0108023-3) have been marked up with
iXBRL markups in accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of Directors
and financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This
responsibility includes:
— preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
— marking up the primary statements and the notes to the consolidated financial statements, and the company
identification data included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of the
ESEF RTS; and
— ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem
necessary to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical requirements applicable in Finland,
which apply to the engagement we have performed, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding compliance
with ethical requirements, professional standards and applicable legal and regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking
up of the consolidated financial statements included in the ESEF financial statements comply in all material
respects with the Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in
accordance with International Standard on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence whether;
— the primary statements of the consolidated financial statements included in the ESEF financial statements
are, in all material respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
— whether the notes to the consolidated financial statements and the company identification data included
in the ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in
accordance with Article 4 of the ESEF RTS; and
— whether the ESEF financial statements and the audited financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes the
assessment of the risks of material departures from the requirements set out in the ESEF RTS, whether due to
fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated
financial statements and the company identification data included in the ESEF financial statements of Finnair
Plc identified as 213800SB6EOB8SSK9W63-2023-12-31-en.zip for the year ended 31 December, 2023 are, in all
material respects, marked up in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of Finnair Plc for the year ended 31
December, 2023 is set out in our Auditor’s Report dated 13 February, 2024. In this report, we do not express any
audit opinion or other assurance conclusion on the consolidated financial statements.
Helsinki 19 February, 2024
KPMG OY AB
Kirsi Jantunen
Authorised Public Accountant, KHT
Finnair – Financial Information 2023 109
Review of
the year 2023
The Report of the
Board of Directors
Board of Directors’
Proposal on the Dividend
Financial
Statements
Auditor’s
Report
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1. Operating result
2. Fleet and other fixed assets and leasing
arrangements
3. Capital structure and financing costs
4. Consolidation
5. Other notes
6. Parent company financial statements
Board of directors’ proposal on the dividend
Auditor’s report
Contact information
House of Travel and Transportation
Finnair Oyj
Tietotie 9 A (Helsinki Airport)
01053 FINNAIR
Tel. +358 600 0 81881
(1,25€/answered call + local charge)
company.finnair.com
investors.finnair.com
www.facebook.com/finnair
www.facebook.com/finnairsuomi
www.twitter.com/Finnair
www.twitter.com/FinnairSuomi
https://blog.finnair.com/en/
https://blog.finnair.com/
www.instagram.com/feelfinnair/