Finnair Group in nterim re eport 1 Ja anuary 30 June e 2014 - - PDF document

SLIDE 1

Finnair

Improved p weak unit r April–June  Tur  The  Net inve and the  Uni the  Uni  Finn and CEO Pekka The second million euro loss of exte

• perator Au

and intensif

• revenue. Th

unit revenue revenue dev Our passen

• ur cost red

met with un cost reducti compensate euros in a q Achieving th absolutely e structure. Outlook Outlook on The ongoing main marke from that gr

Group in

passenger lo revenue dev e 2014 rnover declin e operational t cash flow fr estments tota d leaseback a first A350 ai t cost per av previous yea t revenue pe nair updates d its 2014 op a Vauramo: d quarter of 2

• s. The factor

rnal turnover urinkomatkat fied internatio he appreciati e from passe velopment o nger load fact duction progr derstanding

• ns with som

e for the drop quarter traditi he cost reduc essential in th 15 August 2 g uncertain e

• ets. Air traffic

rowth without

nterim re

• ad factor a

velopment - ed by 7.2% t l result was - rom operating alled -92.2 m arrangement ircraft. vailable seat ar’s level. er available s s its guidance erational res 2014 was diff rs affecting t r resulting fro

• Suntours. T
• nal competi
• n of the eu

enger traffic. f other airline tors in April–

• ram. I am ple

also among me of our per p in revenue ionally strong ctions we are his financial 014: economic ou c is expected t progress in

eport 1 Ja

and progres Q2 operatio to 565.7 mill

• 19.6 million

g activities s million euros ts implement kilometre ex seat kilometre e and estima sult to show a

• ficult. Finnair

he decrease

• m the restru

he impact of ition, particul ro against ou The challeng es. –June improv eased that ou

• ur personn

rsonnel grou , and our ope g for Finnair. e pursuing a

• situation. Fin

tlook in Euro to grow mod its cost redu

anuary –

s in cost sa

• nal result s

ion euros (60 euros (7.5). tood at 69.2 (-46.5). The ted during th xcluding fuel, e (RASK) fe ates its turnov a significant r’s turnover d e in turnover ucturing of av f the weak ec larly in long- ur other prim ging operatin ved year-on-y ur cost reduc nel, and that

• ups. Howeve

erational res . and reaching nnair is very

• pe and Asia

derately in 20 uction progra

– 30 June

avings were showed a lo 09.7). million euros cash flow fro he review per (CASK excl ll by 5.8%. ver in 2014 t loss. declined by 7 included a s viation servic conomic pros haul traffic, h mary revenue ng environme year, and at ction targets we were abl r, these posi sult declined market leve committed to a is contributi

• 014. Finnair,

am and its ta

e 2014

not enough ss of 19.6 m s (101.2), an

• m investme

riod as well a . fuel), decre

• be significa

7.2 per cent y ubstantial de ces, and the spects in Fin had a negativ currencies c ent has also the same tim and market- e to reach ag tive steps we to a substan l costs in all

• achieving a

ing to weak c however, w rget cost stru h to compen million euros nd cash flow ents includes as advance p eased by 2.4 antly lower th year-on-year ecline in unit weak develo nland on dom ve effect on o continued to been reflect me we made

• based appro

greement on ere not suffic ntial loss at 1 cost categor a competitive consumer de will not be abl ucture in pla nsate for the s from aircraft sale payments for per cent fro han in 2013 r to 565.7 revenue, the

• pment of to

mestic deman

• ur unit

weaken our ted in the progress wi

• ach have be

n the necessa cient to 9.6 million ries is e cost level a emand in our e to benefit ce. e e r m e ur nd th een ary and r

SLIDE 2

Finnair estim

• high. Due to

the decline Outlook issu The ongoing main marke from that gr Finnair estim

• high. The ou

significant im for its full-ye Business E The strengt passenger t reflected in kilometres, per cent yea destinations traffic marke Cargo traffic cargo traffic High fuel pr the result fo for air cargo The price of remains at a Japanese y

• quarter. The

quarter. * Finnair’s e Finnair’s es Strategy im In May, Finn strategy wo traffic via He investment. Finnair and traffic betwe business fo joint busine mates its turn

• delays in th

in unit reven ued on 2 Jun g uncertain e

• ets. Air traffic

rowth without mates its turn utcome of Fi mpact on fina ear 2014 fina Environmen hening of the traffic and ca home marke market capa ar-on-year in s grew by so et share rem c volumes de c unit revenu rices and neg

• r Finnair’s ca
• .

f the largest a high level. yen is a signif e substantial

• estimate. The

stimates of ai mplementati nair’s Board

• rk. Finnair’s

elsinki by uti fellow onew een Europe a unded by fel sses have st nover in 201 he personnel nue, Finnair e ne 2014: economic ou c is expected t progress in nover in 201 nnair's ongo ancial perfor ancial perform t e euro again argo revenue et demand in acity between n the second me 2.8 per c mained largely eveloped pos e due to mar gative develo argo traffic. T individual co The US dol ficant income depreciation e estimate is irlines’ sales

• n and part
• f Directors

strategic obj lising Finland world alliance and Japan o low oneworl tarted well an 4 to be signi l cost reducti estimates tha tlook in Euro to grow mod its cost redu 4 to be subs

• ing employe

rmance in 20 mance after t st several re e in the secon n both busine n Helsinki an quarter of 20

• cent. Finnair

y unchanged sitively in Fin rket overcap

• pments in e

The prolonge

• st factor of a

lar is a signif e currency. T n of the yen a based on M through thei tnerships approved th jectives are t d’s geograph e partners Ja n 1 April 201 d alliance m nd their first ficantly lowe ion negotiatio at its 2014 op

• pe and Asia

derately in 20 uction progra stantially lowe ee consultatio 014, and ther the savings evenue curre nd quarter of ess travel and nd Finnair’s E

• 014. Market

increased its d from the co nnair’s main pacity in traffi exchange rat ed weak eco airlines, jet fu ficant expens The US dolla against the e MIDT data col ir own sales e company’s to double As hic location, a apan Airlines

• 14. Previousl

embers Ame months were er than in 201

• ns and the

perational re a is contributi

• 014. Finnair,

am and its ta er than in 20

• ns and cost

refore the co negotiations ncies had a f 2014. The w d leisure traf European de capacity bet s market sha

• mparison pe

market areas c between E es with respe

• nomic situat

uel, decrease se currency ar depreciate euro, which b llected on th channels, su s strategic ta sian revenues and create s and British A y, in July 20 erican Airline e in line with

• 13. Fuel cost

unfavorable sult will show ing to weak c however, w rget cost stru

• 13. Fuel cos

t-saving nego mpany will re have been c negative effe weakness of

• ffic. Measure

stinations gr tween Finnai are in Europe eriod.* s, but there w Europe, the N ect to cargo ion in the eu ed slightly in in Finnair’s o d slightly aga began in 201 e sales volum uch as websi rgets as part s by 2020 fro hareholder v Airways start 13, Finnair jo es, British Air expectations ts are expect market cond w a significan consumer de will not be abl ucture in pla sts are expec

• tiations will

econsider giv concluded. ect on the de f the Finnish ed in availabl rew by appro ir’s Asian an ean traffic, w was continue Nordic countr

• perations a

urozone affec the second

• perations, w

ainst the eur 13, continued mes of trave ites. rt of Finnair’s

• m the 2010

value and be ted a joint bu

• ined the tra

rways and Ib s. ted to remain ditions driving nt loss. emand in our e to benefit ce. cted to remai have a ving guidanc evelopment o economy wa e seat

• ximately 9.2

d European hile in Asian ed pressure o ries and Asia also weakene cts the dema quarter, but while the ro in the seco d in the seco l agencies an s annual level, grow e an attractive usiness for nsatlantic joi

• beria. These

n g r in ce

• f

as 2

• n

a. ed and

• nd

nd nd e int

SLIDE 3

Progress o Finnair cont

• f 2014. Th

reductions. and schedu achieve ma hours. Finnair’s sa as a part of 2014 withou increase the the employe proceed wit to achieve it services on

• utsource 1–

The cost red potential pa

• utsourcing

reduction op In May, Finn which is wit set for colle and also bri commitmen to protection scope of the Finnair also but failed to Finnair and Finnair reac the scope o Employee c

• June. The n

reduced in a euros in ann Negotiation lead to restr personnel s In June, a p Growth Pac decision on Labour Agre be continue Finnair is co

• f reference
• f the struct

tinued the im e focus was Finnair cont ules for achie rket level wa vings negoti the national ut reaching th e use of outs ee consultati th cabin serv ts cabin crew a total of ap

–3 routes withi

ductions ach

• artners. The n

g plans is app ptions includ nair signed a hin the scop ctive labour ings other sig nts to future-o n against un e IAU.

• signed a co
• reach an ag

its senior sta ches approxi

• f FYT.

consultations negotiations c administratio nual cost sav s concerning ructuring of o services offic partial solutio ct between F transferring eement chan ed until 7 Sep

• mmitted to r

e for the cost ural change mplementatio

• n personne

inued negoti eving these c ages and cos ations with th Finnish Emp he desired re sourcing in ca

• ns failed to

vice outsourc w cost reduct pproximately

n this year.

hieved by out need for redu proximately 5 e redundanc a company-s e of the Finn agreements gnificant sav

• riented mea

ilateral termi

• st savings a

greement wit aff and engin mately 6 per s concerning covered eigh

• n and suppo

vings for Finn g Finnair Flig

• perations bu

e are still on

• n was reach

innair and th to a new wa nges concern ptember 2014 reducing its a t reduction ta e and cost re n of its struc el costs, an a ations with th cost reduction sts, primarily he Finnish F ployment and

• esult. Employ

abin services

• lead to an a

cing accordin tion target of 20 long-hau tsourcing and uctions in Fin 540 man-yea cies, shifts to pecific cost r nish Aviation in the area o

• vings. In addi

asures to imp nation until 3 greement wi th clerical em neers (FYT) r cent greate Finnair’s ad ht different pe

• rt functions

nair. ght Academy ut no staff re going. hed in the cos he Finnish Ai age model th ning new pilo 4. annual costs arget is the c eduction pro ctural change area in which he trade unio n targets. Fin by impleme Flight Attenda d Growth Pa yee consulta s in long-hau agreement on ng to the plan f 18 million e l and short-h d their timeta nnair’s own p ars, as discus

• part-time w

reduction ag Union IAU. T

• f technical s

ition to direct prove produc 31 Decembe ith the Helsin mployees with reached an a er efficiency a ministration ersonnel gro by the end o y’s simulator eductions at t st savings ne rline Pilots’ A at lowers un

• ts. In order t

s permanentl company’s un

• gram

e and cost re h Finnair has

• ns represen

nnair’s objec nting change ants’ Associa act in Novem ations pertain ul and short-h n alternative ns discussed

• euros. The co

haul routes in able will be c personnel ov ssed in the e

• rk, tempora

reement per The agreeme services with t cost reduct

• ctivity. As pa

er 2015 in tec nki Airport em hin the scope agreement in and related s and support

• ups in total.
• f 2014. Thes

maintenance this stage. N egotiations in Association ( it costs. In a to finalise the y by 200 mil nit cost level duction prog s not yet achi nting personn tive in the ne es to wage st ation (SLSY), ber 2013, we ning to cabin haul traffic w cost reductio in the emplo

• mpany is pla

n the next tw clarified later ver the next tw employee con ary lay-offs, o taining to Fin ent achieves hin the scope ions, the agr rt of the agre chnical servic mployees wit e of Trade U n May on col savings throu personnel w Altogether o se measures e were concl egotiations c n line with the SLL) The ne ddition, the p e new wage lion euros by in 2010. Ach gram in the s ieved the tar nel regarding egotiations w structures and , which were ere conclude crew and Fi were conclude

• n measures
• yee consult

anning to ou wo years. The r in negotiatio two years in

• nsultations. T
• r combinatio

nnair Technic s the cost red e of the IAU w reement inclu eement, Finn ces, which is thin the scop Union PRO. llective wage ugh this agre were largely c

• ver 100 jobs

s will result in uded in June concerning F e Finnish Em egotiations re parties agree model, the n y the end of 2 hieving the ta econd quarte rgeted cost g the solution was primarily d working e agreed upo ed on 28 Apr nnair’s plans ed in May. A s, Finnair wil tations in ord utsource cabi

aim is to

• ns with

relation to th The personn

• ns of these.

cal Services duction targe well enough, udes nair committe s within the pe of the IAU e settlement. eement within concluded in s will be n 5.3 million e and they w Finnair’s mployment a eached a ed on Collect negotiations

• 2014. The po

argets specif er ns to

• n

ril s to As l der in he nel . , ets ed , n will nd tive will

• int

fied

SLIDE 4

for the cost- continue to reduction of able to mov The long-te

• f six per ce

successful c coming yea Financial p Finnair’s tur Capacity gr decline in u weak develo the compari incurred fro exchange ra personnel re to 589.7 mil non-recurrin currency-de Finnair’s inc currency de

• later. This is

not included currency de for April–Ju amounting i before taxes (18.1). Unit revenu (6.39). Excl the compari 6.39 euro ce implementa Financial p Finnair’s tur Capacity de decline in u weak develo and the wea comparison from emissi rate fluctuat 12.8 per cen

• period. Euro
• perational
• reduction pr

pursue savin f 176 million ve a substant rm return ob ent, which wo cost reductio rs require a performance rnover in the ew by 0.5 pe nit revenue,

• pment of A

ison period, m emissions ate fluctuatio eductions im llion euros (6 ng items, cap enominated f come statem enominated f s an unrealis d in the opera enominated f ne included in total to -2. s for April–Ju e per availab uding the eff ison period. ents (6.55). U ation of the co performance rnover in the ecreased by nit revenue,

• pment of A

ak developm n period, amo

• ns trading,

tions, a decli nt to 176.3 m

• -denominat

result, which rogram is ess ngs in all cos euros comp tial share of f bjective set fo

• uld enable
• n measures

substantial im e in April–Ju second qua er cent. The f the loss of e urinkomatka amounting to s trading, dec

• ns. Personn

mplemented a 606.5). The c pital gains an fleet mainten ment includes fleet mainten sed valuation ational result fleet mainten items related 2 million eur une was -31 ble seat kilom fect of excha Unit cost per Unit cost exc

• st reduction

e in January first half of t 1.2 per cent the loss of e urinkomatka ment of cargo

• unting to 84

decreased b ne in capaci million euros ed operation h refers to th sential for im st categories ared to the u fixed costs to

• r the compa

investments taken by co mprovement une 2014 arter of 2014 factors contr external turno t Suntours. O

• 423.6 millio

creased by 3 nel costs dec after the com company’s op nd changes i nance reserve s the change ance reserve n result based

• t. The chang

ance reserve d to fleet sale ros (-19.3). T .0 million eur metre (RASK ange rate fluc r available se cluding fuel ( n program an y–June 2014 the year fell b . The factors external turno t Suntours, t . Operationa 44.6 million e by 4.0 per ce ty and the de (202.1) due nal costs dec e operating r mproving Finn

• s. By the end

unit cost leve

• volume-ba

any by Finna in growth an

• mpetitors, in

t in profitabili fell by 7.2 pe ributing to the

• ver resulting

Operational c

• n euros (43

3.2 per cent y clined by 14.2 mparison peri perational re n the fair val es, was -19. in the fair va es that took d on IFRS, w ge in the fair es amounted e and leaseb The operating ros (22.6) an K) declined b ctuations, pa eat kilometre (CASK excl. nd totalled 4. 4 by 7.8 per ce s contributing

• ver resulting

the declining al costs exclu euros (880.6) ent year-on-y ecrease in th to the perso clined to 1,17 result exclud nair’s compe

• f June 201

el in 2010. At sed variable ir’s Board of nd business d ntensified com ty. er cent year- e decrease i g from the re costs exclud 35.0). Fuel co year-on-year 2 per cent to

• d. Euro-den

esult, which r lue of derivat 6 million eur alue of deriva place during where the res value of deri d to -4.5 milli back agreem g result was - nd the result by 5.8 per cen assenger unit e (CASK) dec fuel) decreas 35 euro cent ent year-on-y g to the decre g from the re purchases b uding fuel de ). Fuel costs, year to 327.1 he market pri nnel reductio 71.8 million e ding non-recu titiveness, an 4, Finnair ha the same tim costs. Directors is development mpetition and

• n-year to 5

n turnover in estructuring o ing fuel decr

• sts, includin

r to 166.1 mil 86.3 million nominated o efers to the o tives and in t

• s (7.5).

atives and in the period u sult has no c vatives and

• n euros (1.4

ents and the

• 26.3 million

after taxes w nt year-on-ye t revenue de creased by 2 sed by 2.4 pe ts (4.46). year to 1,109 ease in turno estructuring o by tour opera creased by 4 including he million euro ice of fuel. P

• ns impleme

euros (1,221. urring items, nd the comp ad achieved me, the com an operating

• t. High fuel p

d fleet invest 565.7 million ncluded a sub

• f aviation se

reased by 2.6 ng hedging a llion euros (1 euros (100.5

• perational co
• perating res

the value of the value of under review cash flow effe in the value 4). The non- e company’s euros (-10.4 was -23.9 mil ear to 6.02 e eclined by 3.8 2.4 per cent a er cent due t 9.0 million eu

• ver included
• f aviation se

ators outside 4.1 per cent edging and c

• s (341.0) du

Personnel cos ented after th .6). The com capital gains pany will a total cost pany has be g profit marg prices, tments in the euros (609.7 bstantial ervices, and t 6 per cent fro nd costs 171.5) due to 5) due to the

• sts decreas

sult excludin foreign f foreign w but will fall d ect and which

• f foreign
• recurring ite

restructuring 4). The result llion euros euro cents 8 per cent fro amounted to to the uros (1,202.9 d a substantia ervices, and t e the Group, from the costs incurred e to exchang sts declined e compariso pany’s s and change en in e 7). the

• m
• e

sed g due h is ms g, t

• m
• 9).

al the d ge by

• n

es

SLIDE 5

in the fair va

• 53.9 million

The change reserves am related to th amounting i before taxes (2.4). Unit revenu euro cents ( per cent fro and amount cent due to Balance sh The Group’s euros on 30 (5.55). Shar income sho Shareholde currency de plans accor deferred tax Cash flow a Finnair cont investments (89.7) and n The equity r per cent (72 (522.1) and an aircraft fi agreements The compan million euro

• ption of re-

employmen entirely unu matures at t Advance pa Finnair has review perio totalled -11. alue of deriva n euros (-10. e in the fair v mounted to -1 he sale of Fin in total to 10 s for January e per availab (6.23). Exclu m the compa ted to 6.41 e a contractio heet on 30 J s balance sh 0 June 2013) reholders’ eq

• wing a loss.

ers’ equity inc erivatives use rding to IAS 1 xes. and financia tinues to hav

• s. In January

net cash flow ratio was 31. 2.8). At the e interest-bea inancing loan s for these ai ny’s liquidity

• s (425.0) at
• borrowing e

nt pension ins used 180 mill the end of Ju ayments rela a 200-million

• d. Net cash

.2 million eur atives and in 0). alue of deriv 11.4 million e nncatering, fl .6 million eur y–June was ble seat kilom uding the effe arison period euro cents (6 n of producti une 2014 heet totalled ). Shareholde quity declined cludes a fair ed for hedgin

• 19. The valu

al position ve a strong fi y–June 2014 w from invest .8 per cent (3 end of the pe aring net deb n of 107 milli rcraft were im remained st the end of Ju employment p surance com ion euro syn uly 2016. ted to fixed a n-euro short- flow from fin ros (-8.9) and n the value of vatives and in euros (6.7). T eet sale and ros (-20.7). T

• 64.9 million

metre (RASK ect of exchan

• d. Unit cost p

.53). Unit co

• n volume a

1,944.5 millio ers’ equity to d in the first value reserv ng as well as e of the item nancial posit , net cash flo ments totalle 33.3) and ge riod under re bt stood at -6 ion euros, wh mplemented trong in the f

• une. In addit

pension fund

• mpany. Drawi

ndicated cred asset investm

• term comme

nancing amo d financial in f foreign curr n the value o The non-recu d leaseback a The operating euros (4.1) K) declined b nge rate fluct per available

• st excluding

and totalled 4

• n euros at t
• talled 608.4

half of 2014 ve that is affe s actuarial ga m at the end o tion, which s

• w from oper

ed 141.4 mill earing was -1 eview, interes 69.5 million e hich was use during the f first half of 20 ion to the ca d reserves w ing these res dit agreemen ments were 7 ercial paper

• unted to -18

ncome 3.2 m rency-denom

• f foreign cur

urring items f agreements g result was and the resu by 4.9 per cen tuations, pas seat kilomet fuel (CASK 4.36 euro cen the end of th million euros due to the p ected by chan ains and loss

• f June 2014

supports busi rating activiti ion euros (-5 1.4 per cent st-bearing de uros (97.1). ed to finance irst half of th

• 014. The Gro

ash funds on

• rth approxim

serves requir nt, which was 74.7 million e program, wh 83.4 million e illion euros ( minated fleet rency denom for January– and the com

• 54.7 million

ult after taxes nt year-on-ye ssenger unit r tre (CASK) d

• excl. fuel) de

nts (4.42). e period und s (709.9), wh eriod’s result nges in the fa es related to 4 was -28.0 m iness develo es amounted 55.7). t (13.8). The ebt amounte In the first qu e four A330 a e year.

• up’s cash fu

the balance mately 430 m res a bank gu s intended as euros (52.5). hich was unu uros (-63.5). 38.7). maintenance minated fleet –June include mpany’s restr n euros (-24.0 s was -52.0 m ear and amo revenue dec decreased by ecreased by der review (2 hich is 4.75 e t and compre fair values of

• pilots’ defin

million euros

• pment and f

d to 48.7 mil adjusted ge ed to 416.6 m uarter, the co

• aircraft. Sale

unds amount sheet, the G million euros

• uarantee. Fin

s reserve fun used at the e . Financial ex e reserves, w maintenanc ed items ucturing, 0). The resu million euros

• unted to 5.9

clined by 3.5 y 1.7 per cen just 1.3 per ,162.7 millio euros per sha ehensive f oil and ned benefit (-24.9) after future lion euros aring was 63 million euros

• mpany repa

and leaseba ted to 486.1 Group has the from its nnair has an nding and nd of the xpenses was ce lt s 2 nt n are r 3.5 aid ack e

SLIDE 6

Capital exp In January– was related

• engines. Ca

155 million The current asset invest

• f which cor

balance she Fleet Finnair’s fle

• f June 201

first half of t expired, and During the f as per mem

• perates an

In addition t

• company. T

Memorandu sale of three The averag the Finnair f subleased t A350 aircra Finnair estim second half replace airc more aircraf may have. Finnair has agreements penditure –June 2014, to the Busin apital expend euros, with i t state of the tments on co rresponds to eet value inc et is manage 4, Finnair its the year, two d two new A3 first half of th moranda of un n all-Airbus fl to the aircraf These aircraf um of Unders e Embraer 1 e age of the fleet operate to be operate ft mates that its f of 2015. Fin craft currently

• ft. Finnair is

the possibili s with differe capital expe ness Class s diture for the nvestments credit marke

• mpetitive te
• approximate

ludes three f ed by Finnair self operated

• B757 aircra

321 Sharklet he year, the c nderstanding eet. ft operated by ft are operate standing with 70 aircraft. T fleet operate ed by other a ed by other a s first A350 X nnair ordered y in use in lo s evaluating a ty to adjust t nt durations. nditure exclu eat renewal full year 201 in the fleet re et and Finnai

• rms. The com

ely 64 per ce finance lease r Aircraft Fina d 45 aircraft, aft were remo t aircraft wer company con g signed in D y Finnair, its ed by other a h Infinity Avia The transacti ed by Finnair irlines was 5 airlines. XWB wide-bo d 11 A350 XW ng-haul traffi alternatives t he size of its uding advanc

• f the long-h

14, including epresenting a ir’s good deb mpany has 3 ent of the val e aircraft. ance Oy, a w

• f which 15
• ved from Fi

re added to t ncluded sale December 20 balance she airlines, main ation Capital

• n is expect

r was 9.7 yea 5.7 years. Fin

• dy aircraft w

WB aircraft f

• ic. In addition

to minimise t s fleet flexibly ce payments haul fleet and advance pa a majority of bt capacity e 38 unencumb lue of the en wholly-owned are wide-bod nnair’s fleet he fleet. e and leaseba

• 013. As of the

eet includes 2 nly by Flybe F LLC, a US-b ted to close i ars at the en nnair also ha will be delive rom Airbus in n to the 11 fi the effects th y according t totalled 53.0 d other impro yments, is e f this total. nables the fin bered aircraf tire fleet of 0 d subsidiary dy and 30 na according to ack agreeme e end of Mar 25 other airc

• Finland. In M

based aircraf n the second d of the first s eight lease red and add n 2005. Som rm orders, F hat any possi to demand a 0 million euro

• vements to

estimated at a nancing of fu ft, the balanc 0.9 billion eur

• f Finnair Pl

arrow-body a

• plan as thei

ents for four A rch 2014, the craft owned b May, Finnair s ft leasing com d half of 2014 half of 2014 ed aircraft tha ed to the flee me of these a Finnair has op ible delays in and outlook d

• s (38.1) and

the fleet and approximate uture fixed- ce sheet valu

• ros. The
• c. At the en
• aircraft. In the

ir leases A330 aircraft e company by the signed a mpany, on th 4. , and that of at it has et in the ircraft will ptions for eig n deliveries due to its leas d d ly ue d e t he ght se

SLIDE 7

Fleet operate Finnair on 30 Narrow-body Airbus A319 Airbus A320 Airbus A321 Boeing B757 Wide-body fl Airbus A330 Airbus A340 Airbus A350 Total Fleet owned and operated airlines on 30 ATR 72 Embraer 170 Embraer 190 Total * All ATR aircra the Group.

Business a The segmen business ar Services se Travel Reta properties r The segmen Airline Bus This busine service and

• aircraft. The

Managemen Finnair Fligh Services se

• ffice servic

activities.

ed by 0.6.2014 y fleet leet by Finnair d by other 0.6.2014* aft, all E190 airc

area develop nt reporting o reas are Airli egment is not ail Oy as well elated to the nt informatio siness ss area is re service con e Airline Bus nt functions a ht Academy egment also i ces and the m

Seats 138 165 209/196 227 297/271/263 270/269 297 Seats 68–72 76 100 craft and two E1

pment in Ap

• f Finnair Gr

ne Business t reported se as Finnair’s e company’s

• n for the 201

esponsible fo cepts, flight o iness segme as well as th Oy and Finn includes airc management

# Own 9 7 10 6 11 4 8 7 5 45 22 # Own 12 12 5 5 8 8 25 25 170 aircraft hav

pril–June 20 roup’s financ and Travel S

• eparately. Ins

s property ho

• perational a

13 financial y

• r scheduled
• perations a

ent comprises e subsidiarie nair Aircraft F craft maintena t and mainte

Leased (operational leasing) 2 4 7 5 2 20 ve been leased t

014 cial statemen

• Services. Fro

stead, the op

• ldings, office

activities) are year has bee passenger a and activity co s the Sales & es Finnair Ca Finance Oy. F ance, Finnai enance of pro

A (finance leasing) 3 3 A to Flybe Finland

ts is based o

• m the first q

perations it in e services an e reported as en restated a and charter t

• nnected wit

& Marketing, argo Oy, Finn From the firs r Travel Reta

• perties relat

Average C age 31.1 12.9 11.9 7.6 4.7 11.5 9.7 Average C age 31.1 4.9 8.0 5.5 5.7 d and three E17

• n business a

quarter of 20 ncluded (aircr nd the manag s part of the ccordingly. raffic as well th the procur Operations nair Cargo T st quarter of 2 ail Oy and Fi ted to the co

Change Or from 12.2013 +2

• 2

Change Or from 12.2013 70 aircraft to oth

• areas. The r

014 onward, t raft maintena gement and Airline Busin l as cargo sa rement and f and Resourc Terminal Ope 2014 onward innair’s prop mpany’s ope

rdered Add

• ption

11 11 rdered Add

• ption

er parties outsid

eporting the Aviation ance, Finnair maintenance ness segmen ales, custome financing of ces erations Oy, d, the Aviatio erty holdings erational

d. ns 8 8 d. ns de

r e of nt. er

• n

s,

SLIDE 8

Key figures Turnover and Turnover, EU Operational re Operating res Operating r Personnel Average numb

The turnove profitability 72 per cent approximate In April–Jun capacity by

• cent. Measu

decreased b European tr

• cent. The lo

measured in factor in No revenue pas load factor i Unit revenu The strengt passenger t significant s business tra Finnair’s Eu Market capa increased it from the com North Amer sales impro The deman regarding th

• perators o

structural ch scheduled f more sales as a decline

• f leisure tra

decreasing factor of leis Cargo trans long-haul tra

d result R million esult, EUR millio sult, EBIT, EUR result, % of turn ber of employee

er of Airline B

• f operations
• f the segm

ely 11 per ce ne, Finnair tra 0.5 per cent ured in reven by 0.4 per ce raffic measur

• ad factor in

n revenue pa

• rth Atlantic t

ssenger kilom in domestic t e per availab hening of the traffic and ca

• share. The w

avel and leis uropean dest acity betwee ts market sha mparison pe rican traffic d

• ved in this tr

d for leisure heir own eco utside the G hange under flight destina channels for e in leisure tr affic declined by 29.2 per sure traffic de sported on sc

• affic. In the s
• n

million

• ver

es

Business in A s declined su ent’s turnove ent of total re affic measure t year-on-yea nue passeng

• ent. The load

red in revenu European tra assenger kilo raffic rose by metres grew traffic rose by ble seat kilom e euro again argo revenue weakness of t ure traffic. M tinations grew en Finnair’s A are in Europe eriod.* eveloped po raffic area for traffic weake nomic situat roup decline rway in leisur

• tions. This c

r popular leis raffic capacity d by 31.0 per cent in April– ecreased by cheduled flig second quart

4- 201 541

• 20
• 27
• 5

April–June fe

• ubstantially. T

er, leisure tra evenue. ed in revenu

• ar. The passe

er kilometres d factor in As ue passenge affic rose by

• metres decr

y 6.2 percent by 4.9 per c y 1.2 percen metre (RASK st several re e in the secon the Finnish e Measured in a w by approxi Asian and Eu ean traffic, w

• sitively in the

r both passe ened in the s ion slowed d ed substantia re traffic, with hange offers sure destinat y and an inc r cent year-o –June compa 1.8 percenta hts (belly ca ter, belly carg

• 6

14 4-6 2013 .3 583.3 .8 8.1 .0

• 9.4

.0

• 1.6

ell by 7.2 per Ticket reven affic account ue passenger enger load fa s, Asian traff sian traffic ros er kilometres 1.9 percenta reased by 4. tage points t cent year-on- ntage points t K) fell by 5.8 evenue curre nd quarter of economy was available sea imately 9.2 p uropean dest while in Asian e second qu enger traffic a second quart down sales a ally year-on-y h the most p s passengers

• tions. This ch

rease in cap

• n-year, with

ared to the c age points ye rgo) constitu go accounte

Change % 20

• 7.2

1,04 >-200%

• 187.5
• 3.4%-p

4

cent to 541. ue from sche s for approxi r kilometres actor increas fic grew by 1 se by 1.4 pe grew by 14. age points to 8 per cent an

• 91.5 per ce
• year, while c

to 65.6 per c per cent in A ncies had a f 2014. The J s reflected in at kilometres, per cent year tinations grew n traffic mark

• arter. Thank

and cargo. ter year-on-y and decrease

• year. At the s
• pular charte

s better chan hange was a pacity in Euro the number correspondin ear-on-year, utes a signific d for approx

1-6 014 1-6 2013 49.4 1,135.5 55.3

• 12.4

55.2

• 25.6
• 5.3
• 2.3

,450 4,942

3 million eur eduled traffic imately 4 per rose by 2.2 p sed by 1.3 pe .4 per cent y rcentage poi 3 per cent an

• 79.7 per ce

nd capacity b

• ent. Domesti

capacity incr cent. April–June ye negative effe Japanese ye n home mark , market cap r-on-year in t w by some 2 ket share rem s to the trans year, and con ed market pri same time, F er destination nces to tailor lready reflec

• pean traffic
• f passenge

g period last to 84.7 per c cant proportio imately 17 pe

Change %

• 7.6

2 >-200%

• 115.8
• 3.0%-p
• 10.0

ros (583.3), a c constitutes r cent and ca per cent and ercentage po year-on-year ints to 78.7 p nd capacity b

• ent. North Atla

by 11.3 per c ic traffic mea reased by 3.0 ear-on-year. ect on the de en continued ket demand, pacity betwee the second q 2.8 per cent. mained largel satlantic join nsumers’ unc

• ices. Purcha

Finnair has an ns being cha their travel a cted in the se in particular. ers in charter t year. The p cent.

• n of the rev

er cent of tot

2013 2,271.9 8.8 6.3 0.3 4,834

and the approximate argo for

• verall
• ints to 79.5

, while capac per cent. by 11.6 per antic traffic

• cent. The loa

asured in 0 per cent. T evelopment o to represent both in en Helsinki a quarter of 20 Finnair ly unchanged t business, certainty ses by tour n ongoing anged to and opens econd quarte . The capacit r traffic passenger loa venue from tal long-haul ely per city ad The

• f

t a nd 14. d er ty ad

SLIDE 9

• revenue. Th
• year. Finnai

kilometres r separate we part of capa per cent of t rates with re The arrival p flights, and * Finnair’s e Finnair’s es Air traffic s Route netw Finnair offer flights week at most 78 f Nizhny Nov and Krabi in Japan Airlin traffic betwe Through its Finnair, Iber joint busine SriLankan A Other renew In May, Finn the option o service bag Finnair will i been used o beginning o Nagoya, Os After the rev be available

• f both the P

Awards In May, Finn program is t impartial as he amount of ir’s overall lo rose by 1.1 p et-leased car acity coopera total cargo tr espect to car punctuality o 89.8 per ce

• estimate. The

stimates of ai services and

• rk and allia

rs connectio kly from Hels flights to Asia vgorod, Sama n Thailand in nes and fellow een Europe a merger part ria and Britis sses betwee Airlines joine wals and serv nair and Fina

• f dropping th

drop units w install new fu

• n flights to T
• f May, and f

saka and Sha view period, e to Platinum Premium Lo nair was the the most ext ssessments o f cargo and m

• ad factor inc

per cent and rgo flights in ation with JA raffic in the s rgo operation

• f Finnair’s fli

nt (92.1) of a e estimate is irlines’ sales d products nces ns between A sinki to other a per week. ara and Kaza the winter s w oneworld and Japan o ner America sh Airways in en its membe d the onewo vices avia introduc heir checked will also be in ull-flat seats Tokyo and N rom the begi anghai. in August, F m and Gold F unge and the

• nly Nordic

ensive and r

• f all of the s

mail carried b creased sligh the revenue the first qua L Cargo. Sep second quarte ns weakened ights was go all flights arriv based on M through thei Asia and Eu Finnish and During the p an in Russia season 2014– alliance part n 1 April 201 n Airlines, U n April 2014. ers enables b

• rld alliance i

ced self-servi baggage at ntroduced at in most of its New York from inning of Jun Finnair will op innair Plus m e Finnair Lou airline to rec respected co ervices offer by Finnair in htly year-on-y tonne kilom arter to Hano parate cargo

• er. High fuel

d the result fo

• od in April–J

ving on sche MIDT data col ir own sales rope with ov European d period under in July and A –2015. ners British A 14. S Airways a For Finnair’s better connec in April and b ice bag drop a self-servic Oulu and Tu s long-haul fl m the beginn ne, they have pen a new Pr members and unge will also ceive a four-s

• mmercial air

red by the air scheduled t year, to 67.0 etres by 3.0 i, Hong Kong

• capacity flig

prices and n

• r cargo traff

June, with 90 edule. llected on th channels, su er 200 route estinations. review, Finn August, as w Airways and lso joined the s customers, ctions to des began codes units at Hels ce bag drop u urku airports eet in 2014. ning of April, e also been u remium Loun d other onew

• enjoy acce

star Skytrax rline rating in rline. raffic grew by per cent. Th per cent. Fin g and Brusse ghts account negative dev fic. 0.0 per cent ( e sales volum uch as websi pairs and al In the summ air announce well as sched Finnair start e transatlant new airlines stinations out sharing with F sinki Airport, unit immedia later this yea The new Bu

• n flights to

used on fligh nge at Helsin world top-tier ss to a Finni

• rating. The W

n the industry by 3.9 per cen he available t nnair Cargo a els, as well a ted for appro velopments in (92.2) of sch mes of trave ites. lso operates mer season, F ed it will ope duled service ted a joint bu tic joint busin s joining one tside the Fin Finnair. giving Finna ately after ch ar. usiness Class Beijing and hts to Hanoi, nki Airport. T r customers. ish sauna. World Airline y, and it is ba nt year-on- tonne also operate as to Tokyo a

• ximately 22.

n exchange eduled l agencies an more than 8 Finnair opera n new routes es to Phuket usiness for ness with eworld and th nair network air customers eck-in. Self- s seats have Seoul from t Hong Kong, he facilities w The custome Star Rating ased on d as 8 nd 800 ates s to he k. s e the will ers

SLIDE 10

After the rev repeating th 18 million tr named the W Travel Serv This busine and the bus and FTB’s s produces tra

• ffering its c

as golf, saili

Key figures Turnover and Turnover, EU Operational re Operating res Operating r Personnel Average numb

The turnove contraction uncertainty

• perational

improved pr Changes in In June, Fin Finnair’s Ex 53, was app Executive B will join Finn Tuomo Mer

• 2014. Aurin

Director of F

• 2014. Kous

role as the M Riku Aho w Finance Ltd Finnair Airc and fleet as view period, he honour for ravellers from World’s Best vices (Tour ss area cons siness travel subsidiary Es avel sector in customers pa ing and skiin

d result R million esult, EUR millio sult, EBIT, EUR result, % of turn ber of employee

er of Travel S in Aurinkom regarding th result of Tra rofitability of n senior ma nnair announ xecutive Boa pointed Finna

• Board. She is

nair by the e retniemi step komatkat Su Finnair Trave a served as Managing Di as appointed d from 1 July raft Finance sset manage in July, Finn r the fifth stra m more than t Airline Allia Operators a sists of the to agencies tha stravel, whic nformation s ackage tours ng holidays.

• n

million

• ver

es

Services in A atkat Suntou eir own econ avel Services business tra nagement ced that Sen rd, will leave air’s new Se s currently SV nd of 2014. T pped down fro untours is a t el Retail, was the acting M irector of Fin d Managing D

• 2014. Aho p

Ltd is a who ment. air was nam aight time. Th 160 countrie nce for the s and Travel A

• ur operator

at were merg h operates in ystems and s, tailored itin

4- 201 42 1 1

April–June de urs’ turnover, nomic situatio s turned arou avel agencies nior Vice Pre e the compan nior Vice Pre VP Human R Tiensuu will

• m his positi
• ur operator

s appointed t Managing Dire nair Travel R Director of F previously se

• lly-owned su

med Northern he award is

• es. Also at th

second year Agencies) Aurinkomatk ged in Decem n the Baltic c

• solutions. Au

neraries, fligh

• 6

14 4-6 2013 .6 51.3 .1

• 0.6

.8

• 1.0

.9

• 1.9

ecreased by , and amoun

• n was refle

und to show a s. esident, Hum

• ny. At the beg

esident, Hum Resources at leave Finnai ion as Manag r that is a sub the Managin ector of Sunt Retail Ltd. Finnair Aircra erved as Ass ubsidiary of F Europe’s Be based on an e World Airli running. kat (Suntours mber, namely countries, as urinkomatkat ht and hotel p

Change % 2

• 17.0

1 > 200% 175.8 3.8%-p

17.0 per cen ted to 42.6 m cted in the d a profit of 0.8 an Resource ginning of Ju man Resourc t Stora Enso r on 31 Augu ging Director bsidiary of Fi g Director of tours since th ft Finance Lt istant Vice P Finnair Plc. It est Airline at independen ne Awards, t s), its subsid y Area, Finla well as Ama t Suntours se packages, fli

1-6 014 1-6 2013 16.8 133.1 1.4 2.4 0.5 1.5 0.4 1.1 690 778

nt year-on-ye million euros emand for le 8 million euro es, Manne T uly, Eija Haka es, and a me ’s Printing an ust 2014. r of Aurinkom innair Group f Aurinkomat he end of Ap td and its sub President at F t is responsib the World A nt Skytrax su the oneworld diary operatin and Travel Bu adeus Finlan erves leisure ights and cru

Change %

• 12.3
• 41.1
• 67.2
• 0.7%-p
• 11.3

ear, primarily (51.3). Cons eisure travel.

• s (-1.0) due

iensuu, a me akari, M. Sc. ember of Fin nd Living div matkat Sunto

• p. Timo Kous

tkat Suntours pril 2014, in a bsidiary Finn Finnair Aircra ble for aircra Airline Awards rvey of some d alliance wa ng in Estonia ureau (FTB) d, which e travellers, uises, as wel

2013 251.7 3.1 1.6 0.6 751

due to a sumers’ The e to the ember of (Education) nnair’s ision, and sh

• urs on 24 Ap

a, Managing s on 14 Augu addition to hi nair ATR aft Finance L aft procureme s, e as a, l ), he pril g ust s Ltd. ent

SLIDE 11

Personnel The numbe due to the s is 9.3 per ce (4,942) peo

• ther functio

Share price At the end o share was 2 NASDAQ O average pric million euro The numbe Finnish stat investors or There were quarter, the to the rules 306,260 of i One flaggin AS increase equivalent t Corporate Finnair publ published a the financia the strategic Finnair has report accor Program, is In the secon  Finn targ  Finn con  The pers cov Hea r of Finnair e structural cha ent fewer tha

• ple during th
• ns 285 (261

e developme

• f June 2014

2.84 euros (2 OMX Helsinki ce 2.79 euro

• s (46.8), wer

r of shares re te owned 55. r in the name no changes number of s

• f the comp

its own share g notification ed to 7,419,5 to 5.79 per ce responsibil lished its An as separate F l, economic, c business ra reported on rding to GRI s the most wi nd quarter of nair’s overall

• get. The weig

nair’s fuel co nsumption an e wellbeing-a sonnel, was vered by the alth and Safe employees in anges in the an in the prev he first half of 1) people. Th ent and trad 4, Finnair’s m 2.70). During i Stock Exch

• s (2.80). Som

re traded. ecorded in F .8 per cent (5 e of a nomine s in the numb shares held b any’s perform es, represen n was made 573 shares a ent of all sha ity nual Report Financial and social and e amifications environmen

• guidelines. T

dely recogni f 2014, l customer sa ghted overall

• nsumption a

nd emissions at-work index at the same survey are M ety. n the first half

• company. Th

vious year. T f the year. Tr he number of ding market value g the January ange was 3. me 8.9 millio Finnair’s Trad 55.8) of Finn ee. ber of own sh by Finnair inc mance share ting 0.2 per c in January–J as a result of ares and vote for 2013 in M d Sustainabil environmenta

• f this perfor

tal sustainab The GRI, for sed internati atisfaction w l score given and CO2 em s per availabl x (4.0/5.0), w level as in th My Immediate f of 2014 wa he Group em The Airline B ravel Service f employees stood at 363 y–June perio 01 euros (3.

• n (16.7) of th

de Register e air’s shares, hares held by creased by 2 e plan for 20 cent of the to June, as the purchase of es (more tha March 2014. ity Reports, t al performan rmance. bility since 19 rmed with the ional authorit was close to t n by custome issions incre le seat kilom which reflects he previous e Supervisor as significantl mployed an a usiness segm es employed stood at 5,2 3.9 million eu

• d, the highes

24), the lowe he company entry was 12 while 13.4 p y Finnair dur 27,092 share 10–2012. On

• tal share ca

combined ho f shares com an 5 per cent Encompass the 2013 An ce of the Fin 997, and in 2 e support of t ty on sustain the level see ers for the flig eased by 0.7 metre increase s the general

• year. (Scale

r, My Work C ly lower than average of 5, ment employ an average 209 (5,999) o uros (346.0), st price for a est price 2.39 ’s shares, wi 8,136,115 at per cent (12.6 ing the seco es that were r n 30 June 20 apital.

• ldings of fun

pleted on 5 M ). ing objective nual Report nnair Group, 2008 became the United N nability report n in recent y ght experienc per cent yea ed by 0.2 pe wellbeing at : 1=very poo Community, M n in the comp ,425 (5,981) yed an avera

• f 690 (778
• n 30 June.

and the clos a Finnair sha 9 euros (2.40 ith a total val t the end of t 6) were held

• nd quarter. I

returned to F 014, Finnair h nds manage May 2013. T es of what we measures an and identifie e one of the f Nations Envir rting. years, achiev ce was 8.1/1 ar-on-year, a er cent year-o t work of the

• r – 5=excelle

My Perspect parison perio people, whic age of 4,450 ) people and sing price of t re on the 0) and the lue of 24.6 the period. T d by foreign n the first Finnair pursu held a total o ed by Skagen This is ere previousl nd accounts es and explai first airlines t

• nment

ving the set 0. and

• n-year.

company’s ent). The are ive, and My

• d

ch d the The uant

• f

n ly for ns to eas

SLIDE 12

Other even In April, the stop-the-clo be covered trading syst Significant Aviation is a disruptions, managemen are not with The risks an business, fin The achieve involve risks suppliers ca power in rel Negotiation reduction pl effect on the and the com The aviation Estimating t

• difficult. Exa

regulation a the Court of regulations have increa In recent we clarified its c managemen website at w Seasonal v Due to the s their lowest share of As business tra A one-perce effect of app unit cost of In addition t the compan effect of app nts during th European C

• ck model wi

by emission tem. t near term r an industry th seasonal va nt process to hin the compa nd uncertaint nancial resu ement of the

• s. For examp

an have a ne lation to Finn s on cost red lans to reduc e achieveme mpany’s repu n industry is the impacts o amples of su and other env f Justice of th

• n the repor

ased substan eeks, Finnair contingency nt and risks www.finnairg variation and seasonal var in the first q ian traffic inc avel. entage-point proximately 1 scheduled p to operationa ny’s most sig proximately 2 he review pe Council confir ll remain in e s trading. Th risks and un hat is globall ariation and c

• ensure that

any’s full con ties describe lt and future strategic ad ple, quality o egative effect nair. ductions betw ce personnel ent of the com utation. affected by a

• f the regula

ch regulatory vironmental r he European rting of non-f ntially. r has carried plans for dis related to the roup.com. d sensitivitie riation of the uarter and a creases seas t change in th 15 million eu passenger tra al activities, f nificant expe 28 million eu eriod rmed the am effect until th he decision s ncertainties y sensitive to changes in e t risks are ide ntrol. ed below are

• utlook with

vantages an r availability t on Finnair’s ween Finnair costs, such mpany’s cost a number of atory changes y projects inc regulation, E n Union in Oc financial infor

• ut more de

sruptions affe e company’s es in busine airline busin at their highes sonal fluctuat he passenge uros on the G affic has an e fuel price dev ense item. A uros on Finna mendment of e end of 201 supports the

• economic c

economic tre entified and considered in the next 1 nd cost reduc issues and/o s product and r and the trad as outsourc t reduction ta regulatory p s on airlines’ clude interna EU regulation ctober 2012 rmation (resp etailed asses ecting flight o s operations a ess operatio ness, the Gro st in the third tion due to d er load factor Group’s opera effect of appr velopment ha 10-per-cent air’s operatin the Directive 16, which me ICAO aim to cycles and a

• nds. Finnair

mitigated as to potentially 2 months. T ctions pursue

• r unexpecte

d profitability de unions re cing, involve argets, the u rojects at the ’ operational ational regula ns on privacy regarding flig ponsibility) a ssments of th

• perations an

are describe

• ns
• up’s turnove

d quarter of t destination-sp r or the avera ating result. A roximately 17 as a key imp change in th ng result at a e on emission eans that only

• move towar

lso reacts qu has impleme much as po y have a sign his list is not ed through F ed additional y, or suppliers presenting it risks that, if r ninterrupted e EU and inte activities an ation related y protection a ght passenge nd other stak he use of airs nd airspace r d in more de er and profit a he year. The pecific seaso age yield in p A one-perce 7 million euro pact on Finna he world mar n annual leve ns trading in y flights insid rd a global e uickly to exte ented a com

• ssible, altho

nificant impa t intended to Finnair’s partn costs of par s may obtain ts employees realised, cou continuity of ernational le nd/or costs in to emission and the decis ers’ rights. In keholder req space in con restrictions. etail on the c are generally e growing pro

• ns in Asian

passenger tra entage-point c

• s on the op

air’s result, a rket price of f el (for the fo

• aviation. Th

de the EEA w missions ernal prehensive r ugh many ris ct on Finnair be exhaustiv nership proje rtnerships an n bargaining s and cost uld have an f its operatio vels. n advance is trading, nois sion made by n addition, quirements flict areas an Finnair’s risk

• mpany’s

y very much

• portional

leisure and affic has an change in th erating resul s fuel costs a fuel has an llowing 12 e will risk sks r’s ve. ects nd ns se y nd k at e lt. are

SLIDE 13

months on a effect of app Finnair’s for sales reven denominate Japanese y (approximat denominate approximate leasing pay aircraft and A 10-per-ce Finnair’s op

• account. Wi

Finnair’s op Hong Kong exchange ra the following effect of app The compan derivative in verified by t degree of h

• f hedging a

purchases o ratio for a d was 69 per Events afte Finnair subs Airport to W The transac

• taxes. With

Free Helsin Group cove Finnair anno launched se upgrades co

• system. Fin
• n the grou

and replace upgrades ar Financial re Finnair’s int a rolling basi proximately 6 reign exchan ue denomina ed in euros. I yen (approxim tely 5%) and ed in foreign ely 40 per ce ments and fu their spare p ent change in perating resu ithout hedgin perating resu dollar contin ate has an e g 12 months proximately 1 ny protects it nstruments, s the Board of edging decre are 90 and 6

• ver the seco
• llar basket

cent. er the review sidiary Finna World Duty Fr ction will hav the transact ki Ltd. as ex ers only the a

• unced the c

everal produc

• ming in the

nair is also d nd and in the e the complim re based on eporting 20 terim report f is), taking he 65 million eu nge risk arise ated in foreig n the second mately 10% o d the South K

• currencies. T

ent of all ope uel costs as parts, are ma n the euro-do lt at an annu ng, a 10-per- lt at an annu nue to correla ffect of appro s), taking hed 19 million eu tself against such as forw

• Directors. Fu

eases toward 60 per cent fo

• nd half of 2
• ver the follo

w period air Travel Ret ree Group. T e a positive tion, approxim isting employ airport retail f cabin design ct upgrades fall include t developing a e air and int mentary cold feedback co 14 for 1 January edging into ac uros on Finna es primarily fr gn currencies d quarter of 2

• f turnover),

Korean won ( The most imp rating costs. well as traffic ainly denomi

• llar exchang

ual level (for t

• cent change

ual level. The ate strongly w

• ximately 7 m

dging into acc uros on Finna the risks of c ward contracts uel purchase ds the end of

• r the followi

014 was 75

• wing 12 mo

tail signed in he transactio impact of ap mately 60 of

• yees. The tra

function.

• f its new A

in its long-ha the Economy mobile appl roduces Sky snack servic

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SLIDE 14

FINNAIR PL Board of Dir Briefings Finnair will h

• ffice at Tie

The confere code 25585 For further Chief Finan Financial Co mari.repone IRO Kati Ka LC rectors hold a press etotie 9. An E ence may be 56# r information cial Officer E

• mmunicatio

en@finnair.co aksonen, te conference English-langu e attended by n, please co Erno Hilden,

• ns and Inve
• m
• l. +358 9 818
• n 15 Augus

uage telepho y dialling you

• ntact:

, tel. +358 9 stor Relation 8 2780, kati.k st 2014 at 11

• ne conferenc

ur local acces 818 8550, e ns Director M kaksonen@f 1:00 a.m. and ce for analys ss number +3 rno.hilden@ Mari Repone finnair.com, d an analyst sts will begin 358 800 770 finnair.com n, tel. +358 9 briefing at 1 at 3:00 p.m 0 306 and us 9 818 4054, 2:30 p.m. at . Finnish time ing the PIN its e.

SLIDE 15

Key figures Q2 2014 Q2 2013 Change % Q1-Q2 2014 Q1-Q2 2013 Change % 2013 Turnover and result Turnover, EUR million 565.7 609.7

• 7.2

1 109.0 1 202.9

• 7.8

2 400.3 Operational result, EBIT, EUR million *

• 19.6

7.5 <-200 %

• 53.9
• 10.0

<-200 % 11.9 Operational result, % of turnover

• 3.5

1.2

• 4.7 %-p
• 4.9
• 0.8
• 4.0 %-p

0.5 Operating result, EBIT, EUR million

• 26.3
• 10.4
• 152.6
• 54.7
• 24.0
• 127.6

7.9 Operational EBITDAR, EUR million 35.5 57.4

• 38.1

53.0 90.7

• 41.6

210.1 Result before taxes, EUR million

• 31.0

22.6 <-200 %

• 64.9

4.1 <-200 % 26.8 Net result, EUR million

• 23.9

18.1 <-200 %

• 52.0

2.4 <-200 % 22.9 Balance sheet and cash flow Equity ratio, % 31.8 33.3

• 4.5

32.6 Gearing, %

• 11.4

13.8

• 183.1

19.9 Adjusted gearing, % 63.5 72.8

• 12.8

79.2 Gross investment, EUR million 19.9 14.0 42.5 53.0 38.1 39.1 77.3 Return on capital employed, ROCE, 12 months rolling, %

• 1.8

7.0

• 125.5

3.6 Return on equity, ROE, 12 months rolling, %

• 4.8

7.3

• 165.8

3.2 Net cash flow from operating activities, EUR million 69.2 101.2

• 31.6

48.7 89.7

• 45.7

142.4 Share Share price at the end of quarter, EUR 2.84 2.70 2.77 Earnings per share from the result of the period, EUR **

• 0.19

0.14 <-200 %

• 0.41

0.02 <-200 % 0.18 Earnings per share, EUR

• 0.20

0.12 <-200 %

• 0.44
• 0.03

<-200 % 0.11 Traffic data, unit costs and revenue Passengers, 1,000 2 516 2 397 4.9 4 730 4 557 3.8 9 269 Available seat kilometres (ASK), million 7 792 7 754 0.5 15 273 15 457

• 1.2

31 162 Revenue passenger kilometres (RPK), million 6 197 6 062 2.2 12 082 12 192

• 0.9

24 776 Passenger load factor (PLF), % 79.5 78.2 1.3 %-p 79.1 78.9 0.2 %-p 79.5 Unit revenue per available seat kilometre, (RASK), cents/ASK 6.02 6.39

• 5.8

5.92 6.23

• 4.9

6.24 Unit revenue per revenue passenger kilometre, yield, cents/RPK 6.60 7.18

• 8.1

6.51 6.93

• 6.0

6.86 Unit cost per available seat kilometre, (CASK), cents/ASK 6.39 6.55

• 2.4

6.41 6.53

• 1.7

6.47 CASK excluding fuel, cents/ASK 4.35 4.46

• 2.4

4.36 4.42

• 1.3

4.35 Available tonne kilometres (ATK), million 1 179 1 166 1.1 2 313 2 314

• 0.1

4 709 Revenue tonne kilometres (RTK), million 789 767 3.0 1 527 1 513 0.9 3 107 Cargo and mail, tonnes 38 469 37 010 3.9 73 689 69 059 6.7 146 654 Cargo traffic unit revenue per revenue tonne kilometre, cents/RTK 23.22 24.00

• 3.2

23.35 24.66

• 5.3

25.14 Overall load factor, % 67.0 65.8 1.2 %-p 66.0 65.4 0.7 %-p 66.0 Flights, number 25 419 25 239 0.7 49 401 48 757 1.3 97 360 Personnel Average number of employees 5 425 5 981

• 9.3

5 859 ** Before hybrid bond interest. * Operational result: Operating result excluding changes in the fair value of derivatives and in the value of foreign currency denominated fleet maintenance reserves and non-recurring items, that includes capital gains and losses. Comparative figures for 2013 have been restated due to change in accounting principles related to treatment of overhauls. In addition, comparative figures in balance sheet have been effected by the netting of deferred taxes. See note 2 for more information.

SLIDE 16

Consolidated income statement in mill. EUR Q2 2014 Q2 2013 Change % Q1-Q2 2014 Q1-Q2 2013 Change % 2013 Turnover 565.7 609.7

• 7.2

1 109.0 1 202.9

• 7.8

2 400.3 Other operating income 4.4 4.3 1.0 8.9 8.7 2.5 18.8 Operating expenses Staff costs

• 86.3
• 100.5
• 14.2
• 176.3
• 202.1
• 12.8
• 381.3

Fuel

• 166.1
• 171.5
• 3.2
• 327.1
• 341.0
• 4.0
• 689.9

Lease payment for aircraft

• 20.3
• 14.2

42.9

• 36.5
• 28.9

26.3

• 57.5

Other rental payments

• 39.4
• 36.8

7.1

• 78.8
• 72.4

8.9

• 152.0

Fleet materials and overhaul

• 30.0
• 33.2
• 9.7
• 60.3
• 68.8
• 12.3
• 125.8

Traffic charges

• 58.4
• 59.0
• 1.0
• 110.0
• 109.0

0.9

• 222.3

Ground handling and catering expenses

• 61.1
• 65.2
• 6.4
• 124.3
• 128.7
• 3.5
• 257.3

Expenses for tour operations

• 14.6
• 17.8
• 17.9
• 39.8
• 45.9
• 13.4
• 89.4

Sales and marketing expenses

• 19.6
• 19.8
• 1.1
• 33.9
• 37.8
• 10.2
• 72.9

Depreciation

• 34.9
• 35.7
• 2.3
• 70.4
• 71.9
• 2.2
• 140.7

Other expenses

• 59.1
• 52.7

12.1

• 114.5
• 115.2
• 0.6
• 218.1

Operational result, EBIT

• 19.6

7.5 <-200 %

• 53.9
• 10.0

<-200 % 11.9 Fair value changes of derivatives and foreign currency denominated fleet maintenance reserves

• 4.5

1.4 <-200 %

• 11.4

6.7 <-200 % 21.7 Non-recurring items

• 2.2
• 19.3

88.8 10.6

• 20.7

151.1

• 25.7

Operating result, EBIT

• 26.3
• 10.4
• 152.6
• 54.7
• 24.0
• 127.6

7.9 Financial income 2.4 37.4

• 93.6

3.2 38.7

• 91.8

42.6 Financial expenses

• 5.6
• 4.7
• 18.6
• 11.2
• 8.9
• 25.1
• 19.7

Share of result in associates and joint ventures

• 1.6

0.4 <-200 %

• 2.2
• 1.6
• 39.5
• 4.0

Result before taxes

• 31.0

22.6 <-200 %

• 64.9

4.1 <-200 % 26.8 Direct taxes 7.1

• 4.6

> 200 % 12.9

• 1.7

> 200 %

• 3.9

Result for the period

• 23.9

18.1 <-200 %

• 52.0

2.4 <-200 % 22.9 Result for the period attributable to shareholders of the parent company

• 24.0

17.9

• 52.2

2.2 22.6 Result for the period to non-controlling interest 0.1 0.1 0.2 0.2 0.3 Earnings per share attributable to shareholders of the parent company (euro) Earnings per share (basic, diluted)

• 0.20

0.12

• 0.44
• 0.03

0.11 Earnings per share from the result of the period

• 0.19

0.14

• 0.41

0.02 0.18 Comparative figures for 2013 have been restated due to change in accounting principles related to treatment of overhauls. See note 2 for more information.

SLIDE 17

Consolidated balance sheet in mill. EUR 30 Jun 2014 30 Jun 2013 2013 ASSETS Non-current assets Intangible assets 17.5 21.4 19.3 Tangible assets 1 090.1 1 310.2 1 292.6 Investments in associates and joint ventures 6.0 10.7 8.2 Financial assets 18.5 21.8 20.5 Deferred tax asset 14.1 3.4 0.0 Non-current assets total 1 146.1 1 367.5 1 340.6 Short-term receivables Inventories 15.6 18.2 19.9 Derivatives 39.3 39.1 43.6 Trade and other receivables 248.0 285.9 237.1 Money market investments 248.8 330.0 335.9 Cash and cash equivalents 237.3 94.9 122.9 Current assets total 789.0 768.2 759.4 Non-current assets held for sale 9.5 27.1 17.7 Assets total 1 944.5 2 162.7 2 117.6 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity Share capital 75.4 75.4 75.4 Other equity 532.3 633.7 601.9 Total 607.7 709.1 677.3 Non-controlling interest 0.6 0.8 0.7 Equity total 608.4 709.9 678.0 Long-term liabilities Deferred tax liability 0.0 0.0 3.4 Long-term interest-bearing liabilities 326.3 327.3 385.5 Pension obligations 44.6 5.0 10.6 Provisions 60.5 83.5 69.3 Other long-term liabilities 27.6 22.3 25.4 Long-term liabilities total 459.0 438.1 494.1 Short-term liabilities Provisions 44.4 45.3 40.5 Short-term interest-bearing liabilities 90.3 194.8 207.5 Derivatives 13.3 37.3 29.1 Trade payables and other liabilities 729.1 734.7 666.1 Liabilities of non-current assets held for sale 0.0 2.5 2.3 Short-term liabilities total 877.2 1 014.6 945.5 Liabilities total 1 336.2 1 452.7 1 439.6 Shareholders' equity and liabilities total 1 944.5 2 162.7 2 117.6 Comparative figures for 2013 have been restated due to change in accounting principles related to treatment of overhauls. In addition, comparative figures in balance sheet have been effected by the netting of deferred taxes. See note 2 for more information.

SLIDE 18

Consolidated statement of changes in equity in mill. EUR Share capital Other restricted funds Hedging reserve and

• ther OCI

items Unrestricted equity funds Retained earnings Hybrid bond Equity attributable to share- holders of the parent Non- controlling interests Own equity total Shareholders' equity, 1 Jan 2014 75.4 168.1

• 15.0

247.3 82.5 118.9 677.3 0.7 678.0 Result for the period

• 52.2
• 52.2

0.2

• 52.0

Items of comprehensive income

• 13.0
• 13.0
• 13.0

Translation difference 0.0 0.0 0.0 Comprehensive income for the financial period 0.0 0.0

• 13.0

0.0

• 52.2

0.0

• 65.2

0.2

• 65.0

Dividends paid 0.0

• 0.2
• 0.2

Share-based payments

• 0.1
• 0.1
• 0.1

Hybrid bond repayments, interest and expenses

• 4.3
• 4.3
• 4.3

Shareholders' equity, 30 Jun 2014 75.4 168.1

• 28.0

247.3 25.9 118.9 607.7 0.6 608.4 in mill. EUR Share capital Other restricted funds Hedging reserve and

• ther OCI

items Unrestricted equity funds Retained earnings Hybrid bond Equity attributable to share- holders of the parent Non- controlling interests Own equity total Shareholders' equity, 1 Jan 2013 75.4 168.1 0.0 247.1 112.6 171.1 774.3 0.9 775.2 Change in accounting principles (restatement)

• 25.6
• 25.6
• 25.6

Shareholders' equity, restated, 1 Jan 2013 75.4 168.1 0.0 247.1 87.0 171.1 748.7 0.9 749.6 Result for the period 2.2 2.2 0.2 2.4 Items of comprehensive income

• 24.9
• 24.9
• 24.9

Comprehensive income for the financial period 0.0 0.0

• 24.9

0.0 2.2 0.0

• 22.7

0.2

• 22.5

Dividends paid

• 12.7
• 12.7
• 0.3
• 13.0

Purchase of own shares

• 1.7
• 1.7
• 1.7

Share-based payments 1.8

• 0.3

1.5 1.5 Hybrid bond repayments, interest and expenses

• 4.0
• 4.0
• 4.0

Shareholders' equity, 30 Jun 2013 75.4 168.1

• 24.9

247.3 72.1 171.1 709.1 0.8 709.9

SLIDE 19

Consolidated cash flow statement in mill. EUR Q1-Q2 2014 Q1-Q2 2013 2013 Cash flows from operating activities Profit for the financial year

• 52.0

2.4 22.9 Operations for which a payment is not included * 57.4 89.6 115.9 Other adjustments to profit for the period Interest and other financial expenses 11.2 8.9 19.7 Interest income and other financial income

• 0.9
• 37.1
• 38.6

Income taxes

• 12.9

1.7 3.9 Changes in working capital 47.7 32.1 35.8 Interest paid

• 4.7
• 5.8
• 12.1

Paid financial expenses

• 2.0
• 1.6
• 3.8

Received interests 4.9 1.4 1.4 Taxes paid 0.0

• 2.0
• 2.7

Net cash flow from operating activities 48.7 89.7 142.4 Cash flows from investing activities Investments in intangible assets

• 0.4
• 0.8
• 2.3

Investments in tangible assets

• 66.7
• 54.4
• 96.4

Net change of financial interest bearing assets at fair value through profit and loss

• 21.1
• 56.7

14.6 Net change of shares classified as available for sale 0.0 54.1 53.7 Divestment of fixed assets and group shares 227.2 0.0 8.9 Dividends received 0.0 1.1 1.2 Change in non-current receivables 2.4 0.9 1.0 Net cash flow from investing activities 141.4

• 55.7
• 19.3

Cash flows from financing activities Proceeds and changes from borrowings 0.0 0.0 150.0 Loan repayments and changes

• 178.0
• 44.8
• 115.0

Hybrid bond repayments 0.0 0.0

• 52.4

Proceeds from hybrid bond 0.0 0.0 0.0 Hybrid bond interest and expenses

• 5.3
• 4.0
• 15.4

Purchase of own shares 0.0

• 1.7
• 1.7

Dividends paid 0.0

• 13.0
• 13.0

Net cash flow from financing activities

• 183.4
• 63.5
• 47.4

Change in cash flows 6.7

• 29.5

75.7 Liquid funds, at beginning 331.8 256.1 256.1 Change in cash flows 6.7

• 29.5

75.7 Liquid funds, at end 338.6 226.6 331.8 Notes to consolidated cash flow statement * Operations for which a payment is not included Depreciation 70.4 73.1 140.7 Employee benefits 5.8 8.4 7.3 Fair value changes in derivatives and changes in exchange rates of fleet overhauls 11.0

• 6.7
• 21.7

Other adjustments

• 29.7

14.9

• 10.5

Total 57.4 89.6 115.9 Financial asset at fair value 248.8 330.0 335.9 Liquid funds 237.3 94.9 122.9 Short-term cash and cash equivalents in balance sheet 486.1 425.0 458.8 Maturing after more than 3 months

• 147.6
• 197.8
• 126.5

Shares held to trading purposes 0.0

• 0.6
• 0.4

Total in cash flow statement 338.6 226.6 331.8 Comparative figures for 2013 have been restated due to change in accounting principles related to treatment of overhauls. In addition, comparative figures in balance sheet have been effected by the netting of deferred taxes. See note 2 for more information.

SLIDE 20

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

• 1. BASICS OF PREPARATION
• 2. ACCOUNTING PRINCIPLES
• 3. CRITICAL ACCOUNTING ESTIMATES AND SOURCES OF UNCERTAINTY
• 4. SEGMENT INFORMATION

This consolidated interim report has been prepared according to the International (IAS) Standard 34: Interim Financial Reporting. The accounting principles applied in the interim report are consistent with the principles published in the 2013 consolidated financial statements, except for the changes mentioned below. The figures presented in this statement are not rounded, and therefore total sum calculated from these individual figures does not necessarily match the corresponding sum stated here. Key figures stated here are calculated using the exact figures. Finnair has changed the accounting principle for its aircraft engine overhauls. From the beginning of 2014, Finnair capitalizes engine overhauls to its balance sheet and depreciates related costs during the engines’ maintenance periods. Previously

• verhauls were expensed when they occured.

The change reduces the volatility of engine overhaul costs, which improves the accuracy of forecasting future profitability and improves comparability over of periods. It also improves comparability with other airlines, because, based on the study conducted by International Air Traffic Association IATA, the amended practice corresponds to the current industry practice. The change decreased Finnair equity at 31 December 2013 by 13.8 million euros and improved 2013 EBIT by 16.7 million euros. In addition, the change increased 2013 gross investments, improved 2013 cash flow from operating activities and reduced cash flow from investing activities respectively. It also affected Finnair’s 2013 key figures. The change in the accounting principle affects the Airline Business segment. Comparative periods have been restated accordingly, and comparison between restated and previously reported figures have been published at 27 of March 2014 in a separate stock exchange release. In addition, the group has made an evaluation on the nature and classification of its deferred tax assets and liabilities, and concluded that they meet the criteria for netting according to IAS 12, up to the amount that they relate to income taxes levied by the same taxation authority. The deferred tax assets and liabilities have been netted and comparative periods have been adjusted accordingly. The IFRS-standards and interpretations applied by the Group in 2014 are introduced in the accounting principles of 2013 financial statements. The preparation of the interim report requires the company’s management to make estimates and assumptions that influence the levels of reported assets and liabilities as well as of revenue and expenses. The actual outcome may differ from the estimates

• made. The main estimates used are the same as used while preparing the financial statements 2013.

Segment information is presented in line with business segments, which are based on the Group's internal organisation structure and management reporting. From the first quarter of 2014 onward, Aviation Services segment is not reported separately, but its

• perations are reported as a part of the Airline Business segment. After the structural changes in technical services and catering

implemented in 2012, the Aviation Services segment has consisted of aircraft maintenance and the operations of Finncatering Oy and Finnair Travel Retail Oy, as well as Finnair’s property holdings, office services and the management and maintenance of properties related to the company’s operational activities. Finncatering Oy was sold to LSG Lufthansa Service Europa/Afrika GmbH on 28 February 2014. The business segments are Airline Business and Travel Services. Comparative periods have been restated according to new segment division.

SLIDE 21

Business segment data in mill. EUR Airline Business Travel Services Group eliminations Unallocated items Group External turnover 994.3 114.7 1 109.0 Internal turnover 55.1 2.1

• 57.2

0.0 Turnover 1 049.4 116.8

• 57.2

0.0 1 109.0 Operational result, EBIT

• 55.3

1.4

• 53.9

Operating result

• 55.2

0.5

• 54.7

Share of result in associates and joint ventures

• 2.2
• 2.2

Financial income 3.2 3.2 Financial expenses

• 11.2
• 11.2

Income tax 12.9 12.9 Non-controlling interest

• 0.2
• 0.2

Result for the period attributable to shareholders of the parent company

• 52.2

Depreciation 69.7 0.7 70.4 Business segment data in mill. EUR Airline Business Travel Services Group eliminations Unallocated items Group External turnover 1 070.4 132.4 1 202.9 Internal turnover 65.0 0.7

• 65.7

0.0 Turnover 1 135.5 133.1

• 65.7

1 202.9 Operational result, EBIT

• 12.4

2.4

• 10.0

Operating result

• 25.6

1.5

• 24.0

Share of result in associates and joint ventures

• 1.6
• 1.6

Financial income 38.7 38.7 Financial expenses

• 8.9
• 8.9

Income tax

• 1.7
• 1.7

Non-controlling interest

• 0.2
• 0.2

Result for the period attributable to shareholders of the parent company 2.2 Depreciation 71.2 0.7 71.9 Turnover in mill. EUR Q2 2014 Q2 2013 Change % Q1-Q2 2014 Q1-Q2 2013 Change % 2013 Airline Business 541.3 583.3

• 7.2

1 049.4 1 135.5

• 7.6

2 271.9 Travel Services 42.6 51.3

• 17.0

116.8 133.1

• 12.3

251.7 Group eliminations

• 18.2
• 24.8

26.7

• 57.2
• 65.7

13.0

• 123.2

Total 565.7 609.7

• 7.2

1 109.0 1 202.9

• 7.8

2 400.3 Operating result in mill. EUR Q2 2014 Q2 2013 Change % Q1-Q2 2014 Q1-Q2 2013 Change % 2013 Airline Business

• 27.0
• 9.4
• 187.5
• 55.2
• 25.6
• 115.8

6.3 Travel Services 0.8

• 1.0

175.8 0.5 1.5

• 67.2

1.6 Total

• 26.3
• 10.4
• 152.6
• 54.7
• 24.0
• 127.6

7.9 Employees average by segment Q1-Q2 2014 Q1-Q2 2013 Change % 2013 Airline Business 4 450 4 942

• 10.0

4 834 Travel Services 690 778

• 11.3

751 Other functions 285 261 9.2 274 Total 5 425 5 981

• 9.3

5 859 Q1-Q2 2013 Q1-Q2 2014

SLIDE 22

• 5. MANAGEMENT OF FINANCIAL RISKS

Derivatives, in mill. EUR Nominal value Fair net value Nominal value Fair net value Nominal value Fair net value Currency derivatives Hedge accounting items (forward contracts): Jet fuel currency hedging 439.9

• 6.0

426.9

• 0.3

370.5

• 17.0

Fair value hedging of aircraft acquisitions 575.5 6.5 273.2 14.8 244.1 2.2 Currency hedging of lease payments 134.6 0.4 37.4

• 0.1

58.3

• 1.6

Hedge accounting items total 1 150.0 0.8 737.6 14.4 672.9

• 16.4

Items outside hedge accounting: Jet fuel currency hedging 4.9

• 0.3

0.0 0.0 0.0 0.0 Operational cash flow hedging (forward contracts) 429.2 3.9 186.4 0.6 407.9 2.4 Operational cash flow hedging (options) Call options 123.5 5.8 217.3 17.5 149.8 16.1 Put options 156.2

• 1.1

283.9

• 2.6

169.5

• 0.8

Balance sheet hedging (forward contracts) 12.0 0.3 32.2 0.2 20.4

• 1.2

Items outside hedge accounting total 725.7 8.5 719.9 15.7 747.5 16.5 Currency derivatives total 1 875.7 9.3 1 457.5 30.1 1 420.4 0.1 Commodity derivatives Hedge accounting items: Jet fuel forward contracts, tonnes 546 750 10.7 602 120

• 23.3

563 550 11.8 Electricity derivatives, MWh 20 362 0.0 0.0 17 568 0.0 Hedge accounting items total 10.7

• 23.3

11.8 Items outside hedge accounting: Jet fuel forward contracts, tonnes 13 500 0.1 12 000 0.0 18 000 0.8 Options Call options, jet fuel, tonnes 221 000 2.5 204 000 1.5 201 000 3.4 Put options, jet fuel, tonnes

• 221 000
• 1.0

230 000

• 5.9

201 000

• 1.1

Electricity derivatives, MWh 69 127

• 0.4

86 005

• 0.6

71 100

• 0.5

Items outside hedge accounting total 1.2

• 5.0

2.6 Commodity derivatives total 11.9

• 28.3

14.4 Interest rate derivatives Hedge accounting items: Interest rate swaps 150.0 5.0 0.0 0.0 150.0 1.2 Hedge accounting items total 150.0 5.0 0.0 0.0 150.0 1.2 Items outside hedge accounting: Cross currency Interest rate swaps 14.3

• 0.4

19.9 0.4 17.3 0.2 Interest rate swaps 25.0

• 0.3

25.0

• 0.8

25.0

• 0.5

Items outside hedge accounting total 39.3

• 0.7

44.9

• 0.4

42.3

• 0.3

Interest rate derivatives total 189.3 4.3 44.9

• 0.4

192.3 0.9 Derivatives total 25.6 1.4 15.4 No significant changes have been made to the Group’s risk management principles in the reporting period. The objectives and principles of risk management are consistent with information presented in the Group’s 2013 Financial Report. The tables below present the nominal value or the amount and net fair value of derivative contracts used in Group's hedge accounting. 30 Jun 2014 30 Jun 2013 2013

SLIDE 23

• 6. 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, in mill. EUR 30 Jun 2014 Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Securities held for trading 209.3 35.3 174.0 Derivatives held for trading Currency and interest rate swaps 5.0 5.0

• of which in fair value hedge accounting

5.0 5.0 Currency derivatives 20.6 20.6

• of which in fair value hedge accounting

7.3 7.3

• of which in cash flow hedge accounting

2.2 2.2 Commodity derivatives 12.6 11.2 1.4

• of which in cash flow hedge accounting

11.0 11.0 Total 247.5 35.3 210.7 1.4 Financial liabilities recognised at fair value through profit and loss Derivatives held for trading Interest rate swaps 0.7 0.7

• of which in fair value hedge accounting

0.0 0.0 Currency derivatives 11.2 11.2

• of which in fair value hedge accounting

0.8 0.8

• of which in cash flow hedge accounting

7.9 7.9 Commodity derivatives 0.7 0.7

• of which in cash flow hedge accounting

0.3 0.3 Total 12.6 0.0 12.6 0.0 During the reporting period no significant transfers took place between fair value hierarchy Levels 1 and 2. Reconciliation of financial assets and liabilities valued at fair value according to Level 3 Fair values at the end of the reporting period, in mill. EUR Securities held for trading Derivatives held for trading Available-for- sale share investments Total Opening balance 0.4 0.4 Profits and losses in income statement total

• 0.1
• 0.1

In comprehensive income Purchases (and sales) Settlements (and issues) 1.1 1.1 Transfers to and from Level 3 Closing balance 0.0 1.4 0.0 1.4 Total profits and losses recognised for the period for assets held at the end of the reporting period In other operating expenses

• 0.1
• 0.1

The fair values of hierarchy Level 1 are based fully on quoted (unadjusted) prices in active markets of the same assets and liabilities. The fair values of Level 2 instruments are based to a significant extent on input data other than the quoted prices included in Level 1, but however on data that are observable either directly (price) or indirectly (derived from price) for the said asset or liability. The fair values of Level 3 instruments, on the other hand, are based on asset or liability input data that are not based on observable market information (unobservable inputs), but rather to a significant extent on confirmations supplied by counterparties based on generally accepted valuation models. The fair value hierarchy level, to which a certain item valued at fair value is classified in its entirety, is determined in accordance with the requirements of IFRS 7 based on the lowest level of input significant to the overall fair value of the said item. The significance of the input data has been assessed in its entirety in relation to said item valued at fair value. During the reporting period, no transfers took place to or from fair value hierarchy Level 3 in the fair value levels of financial assets and liabilities. According to management estimates, the changing of input data used in determining the fair value of financial instruments valued at Level 3 to some other possible alternative assumption would not significantly change the fair value of items valued at fair value in Level 3, given the relatively small amount of the said assets and liabilities.

SLIDE 24

• 7. COMPANY ACQUISITIONS AND SALES
• 8. INCOME TAXES

The tax rate for the second quarter was -19.8 % (-22.9 %).

• 9. DIVIDEND PER SHARE
• 10. CHANGE IN INTANGIBLE AND TANGIBLE ASSETS

in mill. EUR 30 Jun 2014 30 Jun 2013 2013 Carrying amount at the beginning of period 1 311.9 1 354.2 1 354.2 Fixed asset investments 53.0 38.1 77.3 Change in advances 8.7 21.9 33.3 Disposals

• 195.4
• 9.4
• 11.0

Depreciation

• 70.4
• 71.9
• 140.7

Depreciation included in non-recurring items

• 0.3
• 1.2
• 1.2

Carrying amount at the end of period 1 107.5 1 331.6 1 311.9 Proportion of assets held for sale at the beginning of period 9.8 16.7 16.7 Proportion of assets held for sale at the end of period 4.9 14.7 9.8

• 11. NON-CURRENT ASSETS HELD FOR SALE

Non current assets held for sale 30 Jun 2014 30 Jun 2013 2013 Tangible assets 4.9 14.7 9.8 Inventories 4.5 9.3 5.4 Trade receivables and other receivables 0.0 3.1 2.5 Total 9.5 27.1 17.7 Liabilities of non-current assets held for sale 30 Jun 2014 30 Jun 2013 2013 Trade payables and other liabilities 0.0 2.5 2.3 Total 0.0 2.5 2.3

• 12. INTEREST-BEARING LIABILITIES
• 13. CONTINGENT LIABILITIES

in mill. EUR 30 Jun 2014 30 Jun 2013 2013 Pledges on own behalf 208.9 575.2 503.7 Guarantees on behalf of group undertakings 70.0 66.0 67.6 Guarantees on behalf of others 2.2 2.4 2.3 Total 281.1 643.6 573.5 Investment commitments for property, plant and equipment at 30 June 2014 totalled 897 million euros (1,000).

• 14. OPERATING LEASE COMMITMENTS

in mill. EUR 30 Jun 2014 30 Jun 2013 2013 Lease commitments from fleet payments 599.0 148.0 259.2 Other lease commitments 234.2 253.0 244.8 Total 833.2 401.0 504.0 During the second quarter the Group did not acquire nor sell any businesses. During Q1 2014 Finnair sold its subsidiary Finncatering Oy, which was previously classified as assets held for sale. The Annual General Meeting on 27 March 2014 decided that no dividend is paid for 2013. The Annual General Meeting on 27 March 2013 decided to distribute a dividend of 0.10 euros per share. The total dividend was 12.7 million euros, based on the number of shares registered on 3 April 2013. The dividend was paid on 10 April 2013. Mainly inventories and tangible asset related to Finnair Technics. Comparative period includes also non-current assets and liabilities of Finncatering Oy, which was sold during Q1 2014. During the second quarter of 2014 Finnair amortized its loans according to the loan instalment program. In the first quarter of 2014, Finnair repaid the loans related to the sold A330 aircraft.

SLIDE 25

• 15. RELATED PARTY TRANSACTIONS

in mill. EUR 30 Jun 2014 30 Jun 2013 2013 Transactions with associates and joint ventures Sales 36.0 34.3 65.5 Purchases 39.1 71.7 105.8 Non-current financial assets 9.9 9.9 9.9 Trade and other receivables 0.7 27.7 36.1 Other long-term liabilities 10.3 8.8 9.7 Pension obligations 44.4 4.5 10.5 Trade payables and other liabilities 3.7 5.0 3.5 Guarantees on behalf of associates and joint ventures 2.0 2.0 2.0

• 16. ITEMS OF STATEMENT OF COMPREHENSIVE INCOME

in mill. EUR Q2 2014 Q2 2013 Change % Q1-Q2 2014 Q1-Q2 2013 Change % 2013 Profit for the period

• 23.9

18.1 <-200 %

• 52.0

2.4 <-200 % 22.9 Other comprehensive income items Items that may be classified reclassified to profit or loss in subsequent periods Translation differences 0.0 0.1

• 111.4

0.0 0.0

• 0.0

Change in fair value of available- for-sale financial assets after taxes 0.0

• 21.1

100.0 0.0

• 10.4

100.0

• 10.4

Change in fair value of hedging instruments after taxes 24.1

• 27.3

188.3 9.6

• 16.7

157.3

• 4.2

Items that will not be reclassified to profit or loss in subsequent periods Actuarial gains and losses from defined benefit plans

• 13.4

4.5 <-200 %

• 22.5

2.1 <-200 %

• 0.2

Other comprehensive income items total 10.7

• 43.8

124.5

• 13.0
• 25.0

48.0

• 15.0

Comprehensive income for the financial period

• 13.2
• 25.7

48.6

• 65.0
• 22.6
• 188.0

7.9 Earnings attributable to shareholders of the parent company of the comprehensive income statement

• 13.3
• 25.8

48.4

• 65.2
• 22.8
• 186.3

7.7 Earnings attributable to non- controlling interest of the comprehensive income statement 0.1 0.1

• 10.6

0.2 0.2

• 1.7

0.3

• 17. EVENTS AFTER THE REVIEW PERIOD

There have not been other remarkable events after the closing date as told in the interim report. Other comprehensive income include the unrealisable change in the fair value of the hedging instruments of the hedge accounting items, which has earlier been recognised straight in the hedging reserve of the shareholders’ equity, and the translation difference.

SLIDE 26

• 18. CALCULATION OF KEY RATIOS

Earnings / share: Return on capital employed, % (ROCE): Result for the period - hybrid bond interest Profit before taxes + interest and

• ther financial expenses * 100

Average number of shares at the end of the financial year, adjusted for share issues Balance sheet total - non-interest-bearing liabilities (average) Earnings per share from the result of the period: Net interest-bearing liabilities: Result for the period Interest-bearing liabilities - interest-bearing assets - listed shares Average number of shares at the end of the financial year, adjusted for share issues Equity / share: Equity ratio, %: Shareholders' equity Shareholders' equity + non-controlling interest * 100 Number of shares at the end of the financial year, adjusted for share issues Balance sheet total - advances received Gearing, %: Return on equity, % (ROE): Net interest-bearing liabilities * 100 Result * 100 Shareholders' equity + non-controlling interest Equity + non-controlling interest (average) Operating profit, EBIT: Shareholders' equity: To equity holders of the parent The figures of interim report have not been audited. Operating profit excluding capital gains, non-recurring items and fair value changes in derivatives and changes in the exchange rates of fleet

• verhauls