Coronavirus impact on Finnair Finnair has cancelled approximately - PowerPoint PPT Presentation

Coronavirus impact on Finnair • Finnair has cancelled approximately 200 flights between 5 February and 29 March • All flights to China between 6 and 29 February • Guangzhou, Beijing Daxing and Nanjing cancelled also during March • Direct financial impact is relatively limited in Q1 • We are preparing for different scenarios as it is difficult to estimate the length of coronavirus impact • One A350 delivery has been delayed from April to June • We are committed to the Chinese market on a long-term basis – some tactical changes to flight frequencies may be done 2

Outlook and guidance Guidance on 7 February 2020: We are currently seeing strong performance continuing in Europe. As stated earlier, the direct financial impact of coronavirus during Q1 2020 is relatively limited, even if the mainland China cancellations continued until end of Q1 2020. We currently forecast our capacity to increase by approximately 4 per cent in 2020. Due to the situation with coronavirus, we do not provide a full year revenue estimate at this time. The guidance will be updated in connection to Q1 2020 interim report. 3

2019: Volatile year ended with a strong quarter Q4 2020 Topi Manner, Finnair

A volatile year for aviation • Global uncertainties impacted aviation • Trade war • Brexit • Boeing MAX8 issue decreased capacity • Industrial action • Air space restrictions (Pakistan, Iran) • Sustainability took center stage • Finnair continued strong growth • ASK +11.3% • New long-haul destinations: Los Angeles, Daxing, Sapporo • Almost 1,000 new people joined Finnair • Strong focus on distribution and digital services 5

Full year 2019: costs excl. fuel increased in line with revenue Comparable operating result Capacity Revenue NPS 162.8 M€ +11.3% +9.2% 38* (218.4 M€) Operating cost (Excl. fuel) PLF Operating cost Passenger volume +9.2% -0.1%-points +11.1% +10.3%** (In fuel combined effect of price paid, currency and hedges totaled 42 million euros) NPS = Net Promoter Score *New Customer satisfaction survey was launched in beginning of January 2019. In the new survey NPS is calculated based on responses from all customers starting from beginning of 2019, including Finnair Plus and non-members. In 2018, NPS was calculated based on responses from Finnair Plus members only and therefore these results are not comparable. In 2018, NPS was 47. **Finnair carried in total of 14.7 million passengers in 2019 and 13.3 million passenger in 2018. 6

Strong Q4 ended the year • Revenue increased by 13.4% (774.9 M€) • Over 3.5 million passengers, up to 104 weekly flights to Asia • Increased market share in Asia and in Europe • New routes to Beijing Daxing and Sapporo in Japan • Unit revenues increased in Europe • Double digit growth in Asian capacity with flat unit revenues despite Hongkong unrest • Global operating environment in cargo weak as expected • Aurinkomatkat was again Finland’s largest tour operator, with increased market share 7

Q4: Strong revenue growth while costs in check Comparable operating result Capacity Revenue NPS 31.2 M€ +10.6% +13.4% 41** (26.5 M€)* Operating cost PLF (Excl. fuel) Operating cost Passenger volume +2.1%- +10.9% +12.4% +11.0%*** points (In fuel combined effect of price paid, currency and hedges totaled 12 million euros) NPS = Net Promoter Score *Pilot long-term incentive scheme cancelled in 2018 caused a positive one-off item of c. 11 M€ in Q4 2018. **New Customer satisfaction survey was launched in beginning of January 2019. In the new survey NPS is calculated based on responses from all customers starting from beginning of 2019, including Finnair Plus and non-members. In 2018, NPS was calculated based on responses from Finnair Plus members only and therefore these results are not comparable. In Q4 2018, NPS was 45. ***Finnair carried in total of 3.5 million passengers in Q4/2019 and 3.2 million passenger in Q4/2018. 8

Finnair market shares (rolling 12 months) have increased in both Asian and European traffic Finnair market share and ASK development – Europe Finnair market share and ASK development – to Asia Helsinki to Europe (incl. domestic Finland) Finnair market Finnair market ASK, Millions ASK, Millions share [%] share [%] 7.0% 25,000 70% 25,000 6.0% 60% 20,000 20,000 5.0% 50% 15,000 15,000 40% 4.0% 3.0% 30% 10,000 10,000 2.0% 20% 5,000 5,000 1.0% 10% 0.0% 0 0% 0 2014/Q4 2015/Q1 2015/Q2 2015/Q3 2015/Q4 2016/Q1 2016/Q2 2016/Q3 2016/Q4 2017/Q1 2017/Q2 2017/Q3 2017/Q4 2018/Q1 2018/Q2 2018/Q3 2018/Q4 2019/Q1 2019/Q2 2019/Q3 2019/Q4 2014/Q4 2015/Q1 2015/Q2 2015/Q3 2015/Q4 2016/Q1 2016/Q2 2016/Q3 2016/Q4 2017/Q1 2017/Q2 2017/Q3 2017/Q4 2018/Q1 2018/Q2 2018/Q3 2018/Q4 2019/Q1 2019/Q2 2019/Q3 2019/Q4 Departure Periods Departure Periods Finnair market share (rolling 12 months) Finnair market share (rolling 12 months) Finnair ASK (rolling 12 months) Finnair ASK (rolling 12 months) Note: 2019/Q4 market shares are only including 2019/October and 2019/November Note: 2019/Q4 market shares are only including 2019/October and 2019/November 9

Passenger revenue driving the growth Revenue by product • European traffic performed strongly, positive 13.4% development also in North American routes. 775 57 683 57 • Hong Kong impact in revenue less than expected. 53 45 60 39 • Ancillary revenue per passenger grew to 12.72€ (12.42). 616 531 • Soft global cargo demand environment, especially in Asia, impacted cargo revenue. Q4 2018 Q4 2019 • Decreased market supply of package holidays +16.0% Passenger revenue together with the growing customer demand +13.6% Ancillary positively affected travel services result. -4.6% Cargo +7.5% Travel services 10

We succeeded in increasing both passenger load factors and unit revenues across all market areas, especially in Europe and North America Domestic North America Total % Change Total % Change ASK (million) 520.0 0.3% ASK (million) 1,012.0 32.8% Revenue (Million) 52.8 8.6% Revenue (Million) 42.3 38.5% RASK (Cents/ASK) 10.16 8.2% RASK (Cents/ASK) 4.18 4.3% PLF % 67.4% 3.5pp PLF % 79.9% 1.2pp Europe Total % Change 4,313.1 6.9% ASK (million) 249.1 17.3% Revenue (Million) Total traffic Asia 5.78 9.8% RASK (Cents/ASK) Total % Change Total % Change 79.2% 3.4pp PLF % 11,587.4 10.6% ASK (million) ASK (million) 5,742.4 11.4% 615.9 16.0% Revenue (Million) Revenue (Million) 255.4 12.0% 5.32 4.8% RASK (Cents/ASK) RASK (Cents/ASK) 4.45 0.5% 79.0% 2.1pp PLF % PLF % 79.7% 0.8pp 11 *PLF=Passenger load factor

Q4 revenue growth was driven by strong performance in Europe Passenger revenue Q4/18 vs Q4/19 Other revenue Q4/18 vs Q4/19 +16.0% +4.3% 4.9 615.9 4.0 159.0 4.2 36.8 5.3 -2.8 11.8 44.6 152.5 -2.8 27.3 39.2 530.9 57.2 Ancillary and retail revenue 60.0 Cargo 57.3 Travel services 53.3 Q4 2018 Asia North Europe Unallo- Q4 2019 Q4 2018 Ancillary Cargo Travel Q4 2019 services Atlantic Domestic cated • Increased competition on routes between China and Finland, and softened demand to Hong Kong weighted down Asia. • Capacity additions to North Atlantic were well received. • Competitors’ capacity reductions and Finland’s Council of the EU presidency had a beneficial effect on the European traffic. 12

Increasing unit cost puts focus on efficiency OPEX, 759.2M€ in total +12.4% Comparable EBIT Q4/18 vs Q4/19 +4.6M€ Fuel 91.5 4% 5% Passenger revenue 84.9 Staff 22% 6% Ancillarysales5.3 Combined effect of price paid, currency and Travel services4.0 Passenger and handling services Cargo -2.8 hedges totaled approx. 12 million euros 7% Traffic charges -3.2 Depreciation and impairment -17.1 12% -12.0 Aircraft materials and overhaul 18% Sales, marketing and distribution -26.0 -1.2 10% -10.5 Capacity rents -4.3 -3.6 16% -7.6 31.2 -1.4 Property, IT and other expenses 26.5 -12.0 • Unit cost at constant currency excluding fuel increased by 1.3% (Q4/2019 vs Q4/2018) Q4 Revenue Other Staff Fuel Capacity Aircraft Traffic Passenger Depreciation Q4 operating costs costs rents materials charges and and 2018 2019 • Capacity growth 10.6% income and Sales, handling impairment overhaul marketing services Property, • Operating costs 12.4% and IT and • OPEX excluding fuel 10.9% distribution other costs expenses 13 OPEX = operating expenses.

Fuel costs increased with volume growth and the USD effect Fuel costs Q4/19 vs. Q4/18 Fuel hedges 31 December 2019 +26M€ 100% hedge ratio upper lower 90% 27 171 80% 14 70% 60% 145 6 50% 40% -21 30% 20% 10% 0% Q4 2018 Volume Price Currency Hedging Q4 2019 deviation ~12 M€ Period Hedging ratio Average price of the hedged position • Q4/18 hedging gain 27.7 M€ Q1 2020 69 % 686 USD/tons* • Q4/19 hedging gain 0.4 M€ Q2 2020 67 % 681 USD/tons* Q3 2020 57 % 665 USD/tons* CO2 emissions trading fees: Q4 2020 46 % 640 USD/tons* • Q4/18: 3.9 M€ • Q4/19: 4.0 M€ * Average of swaps and bought call options strikes. 14