Finnair shares tumble on potential Ukraine conflict impact

Shares in Finnish airline Finnair fell sharply on Monday, as the carrier warned that the potential closure of Russian airspace as a result of the Ukraine conflict would severely impact operations.

In the early hours of trading on the Helsinki stock exchange, Finnair shares were down over 20 per cent.

The Finnish carrier noted that the closure of Russian airspace "would notably impact air traffic between Europe and Asia, which plays an important role in Finnair's network."

"Bypassing the Russian airspace lengthens flight times to Asia considerably and, thus, the operation of most our passenger and cargo flights to Asia is not economically sustainable or competitive," Finnair chief executive Topi Manner said in a statement.

Manner added that the company understood "the EU's decision to close its airspace".

"The crisis in Ukraine touches all Europeans," the CEO said.

In response to EU countries closing their airspace for Russian flights, Russia has already barred flights from a number of countries such as Britain, Latvia, Lithuania, Estonia, Slovenia, Bulgaria, Poland and the Czech
Republic.

The impact would worsen if the situation became prolonged, the Finnish company said, and therefore it was withdrawing the forward guidance that it had provided with the earnings report for the fourth quarter of 2021.

In mid-February, Finnair said it expected "Asian markets would gradually open for travel" towards the end of the second quarter of 2022, paving the way for a recovery.

Like many of its competitors, Finnair has been forced to take major cost-cutting measures to cope with the impact of the coronavirus pandemic.

At the end of 2021, Finnair had 5,365 employees, about 850 fewer than at the end of 2020 and 1,400 fewer than before Covid-19.