Finnair Group in nterim re eport 1 Ja anuary 31 Marc ch 2014 - - PDF document

SLIDE 1

Finnair

Difficult firs January–M  Tur  The  Net inve  Uni from  Uni  Goo bus  Mar resu CEO Pekka The first qua Our turnove affected by traffic reven particularly signs of a re Our result fo 34.2 million commercial measures is It was a maj and the Finn concluded i agreement. bear the cur rely on unila The first qua 2013 have b

• n flights be

level, and w replacing th We will cont

• ur long-ha

in achieving

Group in

st quarter, c March 2014 rnover declin e operational t cash flow fr estments tota t cost per av m previous y t revenue pe

• d developm

siness for flig rket outlook f ult of cost re a Vauramo: arter of the y er declined b a slight decr nue decline m in business t ecovery in de

• r the first qu
• euros. This

strategy aim s inevitable a jor disappoin nish Flight A n November Negotiations rrent cost str ateral measu arter also inc been very po etween Euro we made effo he last of our tinue the ren ul fleet starti g our cost red

nterim re

continued co ed by 8.4% t l result was - rom operating alled 233.6 m vailable seat ear’s level. er available s ment in the tra ghts between for 2014 rem duction nego year is typica y 8.4% year- rease in over mainly due to

• travel. Cargo

emand. uarter was ve indicates cle med at turnov and vital for F ntment that o Attendants' As r 2013 in line s with the Fin ructure, I hop ures is the fin cluded some

• sitive. It has

pe and Japa

• rts to improv

Boeing 757 newal of our s ng next year duction targe

eport 1 Ja

• st reductio

to 543.3 mill

• 34.2 million

g activities s million euros kilometre ex seat kilometre ansatlantic jo n Europe and main unchang

• tiations and

ally Finnair’s

• on-year and

rall capacity,

• exchange r
• traffic conti

ery weak: Ou early that our ver growth ar Finnair’s futu

• ur negotiatio

ssociation (S e with the Fin nnish Pilots' pe we can st nal and least e positives. T s also allowe an, which beg ve the comfo aircraft with service conc

• r. However, o
• et. Only a pro

anuary –

• ns essentia

ion euros (59 euros (-17.5 tood at -20.5 (-9.2). xcluding fuel, e (RASK) fe

• int business

d Japan. ged, Finnair’s d employee c weakest, an d amounted t continued s rate fluctuatio nued to suffe ur operationa r cost-reduct re absolutely ure.

• ns with the

SLSY) under nnish Employ Association ill reach a m pleasant alte The results of ed us to accu gan in April.

• rt of travel b

new Airbus cepts this yea

• ur future gro
• fitable Finna

– 31 Marc

al 93.2). 5). 5 million euro CASK (CAS ll by 4.0%. s, the compa s result for 2 consultations d this year th to 543.3 milli strong contra

• ns, and a de

er from mark al result decl tion program y essential. C Finnish Avia the crisis cla yment and G (SLL) are st utual agreem ernative, and f the transatl mulate valua Our operatio y launching a 321 Sharkle ar while also

• wth depend

air can grow

ch 2014

• s (-11.5), an

SK excl. fuel) ny made pre 014 will be s . he period wa

• n euros. Th

ction in leisu ecline in hom ket overcapa ined significa and the mea Continuing w ation Union (I ause include rowth Pact d ill ongoing. A ment on how d we hope to antic joint bu able experien

• nal quality a

a Business C t aircraft. making prep ds significant . nd cash flow ) decreased eparations to substantially as particularly he decline in ure traffic vol me market de acity, but ther antly and sho asures unde with cost-redu IAU), the Tra ed in the agre did not lead t As Finnair sim to save cost

• avoid it.

usiness we b nce for the jo also remained Class seat re paring for the tly on how we from by 0.2 per ce

• begin a join

affected by t y difficult for turnover wa ume, Asian emand, re were early

• wed a loss

r our new uction ade Union PR eements

• any

mply cannot

• ts. Having to

began in July

• int business

d at a high enewal and e renewal of ell we succe ent nt the us. as y

• f

RO

• y

s ed

SLIDE 2

Outlook for The ongoing main marke from that gr Finnair estim

• high. The ou

significant im for its full-ye Business E Global air tr liberalisation network car first quarter growth in th long-haul tra The negativ developmen economy w kilometres, cent in the f some 2 per remained la Cargo traffic between Eu developmen However, th Japan. The price of dollar is a s

• currency. Th

the yen, wh Bank of Jap Strategy im At the begin joining the t has started 2013, the co Airlines and markets, an The airlines capacity, flig r 2014 rema g uncertain e

• ets. Air traffic

rowth without mates its turn utcome of Fi mpact on fina ear 2014 fina Environmen raffic is curre n, increasing rriers, Finnai

• f 2014 to im

he market wa affic. ve developme nt of passeng as reflected market capa first quarter o cent.* Finna argely uncha c continued t urope, the No nts in exchan here were ea f the largest ignificant exp he US dollar ich began in pan. mplementati nning of July transatlantic well and the

• mpetition a

d British Airw nd the joint b s participating ght schedule ains unchan economic ou c is expected t progress in nover to be c nnair's ongo ancial perfor ancial perform t ently undergo g competition r included, co mprove their as mostly con ent of the ex ger traffic an in home mar acity between

• f 2014. Mar

air increased nged from th to suffer from

• rdic region a

nge rates wit arly signs of a individual co pense curren r depreciated 2013, contin

• n and part

2013, Finna joint busines e first months uthorities ap ways for flight usiness ente g in the joint es and fares. ged tlook in Euro to grow mod its cost savi close to the p

• ing employe

rmance in 20 mance after t

• ing a structu

n, overcapac

• ntinued to i

r competitive

• nservative. V

xchange rates d cargo reve rket demand n Helsinki an rket capacity its market s he compariso m overcapaci and Asia und th respect to a recovery in

• st factor of a

ncy in Finnai d slightly aga nued in the f tnerships air increased ss founded b s of the trans proved the c ts between J ered into effe businesses The aim of t

• pe and Asia

derately in 20 ings program previous yea ee consultatio 014, and ther the savings ural change, city, consolida mplement st ness in the p Various partn s of several enue in the fi d, in both bus nd Finnair’s E between Fin hare in Euro

• n period.*

ity in the first der increased cargo opera n demand in airlines, jet fu r’s operation ainst the euro first quarter a its cooperat by American satlantic joint company’s en apan and Eu ect at the beg cooperate co the participa a is contributi

• 014. Finnair

m and its targ ar’s level in 2

• ns and cost

refore the co negotiations the typical c ation, allianc tructural cha prevailing tig nerships have income curre rst quarter o siness travel European de nnair’s Asian

• pean traffic,

t quarter of 2 d pressure. H ations also w Central Euro uel, decrease ns, while the

• in the first q

as a result of ion with fello Airlines, Brit business we ntry into the j

• urope. Japan

ginning of Ap

• mmercially

ting airlines ing to weak c r, however, w get cost struc

• 014. Fuel co

t-saving nego mpany will re have been c characteristic ces and spec nge and cost ht competitiv e increased, encies had a f 2014. The w and leisure t stinations gr and Europe while in Asia 2014, which p High fuel pric eakened the

• pe as well a

ed slightly in Japanese ye

• quarter. The

f stimulus me

• w oneworld

ish Airways a ere in line wit joint busines n is one of Fi pril 2014. by sharing re is to improve consumer de will not be ab cture in place

• sts are expe
• tiations will

econsider giv concluded. cs of which a

• cialisation. Eu

st-reduction p ve situation. especially in a negative eff weakness of

• traffic. Meas

rew by appro ean destinatio an traffic ma put average ces and nega e result for ca as Asia, parti the first qua en is a signif substantial d easures impl alliance mem and Iberia. T th expectatio ss establishe nnair’s most revenue and e the efficien emand in our ble to benefit e. ected to rema have a ving guidanc re market uropean programs in t Capacity n internationa fect on the f the Finnish ured in seat

• ximately 4 p
• ns grew by

rket share yields in traf ative argo traffic. cularly in

• arter. The US

ficant income depreciation emented by mbers by The cooperat

• ns. In Octob

ed by Japan t important by coordinat cy of their r ain ce the al per ffic S e

• f

the tion ber ting

SLIDE 3

• perations,

and Japan w Progress o Finnair cont

• 2014. As pa

approximate million euro solutions an In Novembe Finnish Cab labour agre processes o loss-making company w Although th

• n cost sav

drafting opti representat functions as The employ Negotiation made later i Finnair’s ob market wag

• hours. Achie

competitive competition long-term re per cent, wh Finnair is al annual cost target is the respect to a

• euros. At th

based varia Financial p Finnair’s tur decreased b in leisure tra the Japanes

• utsourced.

to 421.0 mil decreased b in the marke increase the with improve

• f the struct

tinued the im art of the sup ely 35 million

• s. Finnair co

nd schedules er 2013, the A bin Crew Uni ement in line

• f separate, c

g results for 2

• uld have to

e company’s ings, it anno ional plans to ives on the is s well as cab yee consultat s with pilots in spring. bjective in the ges and costs eving the tar ness, as hig and fleet inv eturn objectiv hich would e so continuin ts permanent e company’s all of its costs e same time able costs. performance rnover in the by 2.9 per ce affic, lower e se yen, and t . Operationa llion euros (4 by 5.0 per ce et price of fu eir unit reven ed intercontin ural change mplementatio pplementary n euros and t

• ntinued nego

s for achievin Association

• n (SLSY), t

e with the Fin company-sp 2013, Finnai

• assess alte

s priority and unced in con

• increase o
• ssue. These

bin attendants tions do not a include sign e negotiation s in the indus rgets of the c h fuel prices vestments in ve set for the nable invest g to pursue s tly by 200 m unit cost lev

• s. By the end

e, the compa e in January first quarter

• ent. The facto

euro-denomin the loss of th l costs exclu 445.6). Fuel c ent year-on-y el, and exch ue, expand t nental connec e and cost-re n of its struc cost-reductio technical ser

• tiations with

ng these cost

• f Support S

the Finnish A nnish Employ ecific negotia r stated that rnative meas preference njunction with

• utsourcing. F

consultation s. apply to pilot ificant chang s is primarily stry, primarily cost-reductio , successful the coming e company b ments in gro savings in al illion euros b el in 2010. I d of March 20 ny has been y–March 201 fell by 8.4 pe

• rs contribut

nated revenu he external tu ding fuel dec costs, includ year to 161.0 ange rate flu their network ctions. eduction pr ctural change

• n program,

rvices and cu h the trade u t reduction ta Service Indus Aviation Unio yment and G ations relate if necessary sures for ach is to reach a h the Annual Finnair bega ns concern e ts, as the pilo ges to Collec y to achieve y by impleme n program is cost reductio years requir by Finnair’s B

• wth and bus

l other cost c by the end of In addition, th 014, Finnair able to mov 14 er cent year- ting to the de ue from Asian urnover of Av creased by 5 ing hedging 0 million euro

• uctuations. P

ks and provid rogram e and cost-re Finnair aims ustomer serv nions repres argets. stries (PALTA

• n (IAU) and

Growth Pact a d to Finnair’s y progress we hieving the co an agreemen l General Me n employee employees wo

• ts’ savings

ctive Labour A a level of cos enting chang s essential fo

• n measures

re a substant Board of Dire siness develo

• categories. T

f 2014. The p he company had achieve ve a substant

• on-year to 5

ecline in turno n traffic that viation Servic 5.5 per cent f and costs in

• s (169.4) du

Personnel cos de the travell duction prog s to reduce fl vice personne senting perso A) reached a Trade Union and also agre s cost reduct ere not made

• st reduction

t with person eeting held o consultations

• rking in adm

negotiations Agreements sts and wage ges to wage s

• r improving t

s taken by co tial improvem ctors is an o

• pment.

The combine point of refere must achiev d a total cost tial share of f 543.3 million

• ver in partic

was mainly d ces after the from the com curred from ue to a declin sts declined ling public be grams in the ight crew co el costs by a

• nnel regard

an agreemen n Pro on a ne reed on the s

• tions. When

e in the nego ns. nnel through

• n 27 March t

s with perso ministrative a s deadline is and the dec es that corre structures an the company

• mpetitors, in

ment in profit

• perating pro

ed total target rence for the ve the marke st reduction o fixed costs to euros (593.2 cular include due to the de e operations w mparison per emissions tr ne in capacity by 11.4 per c etween Euro first quarter sts by approximately ing the nt with the ew collective schedule and announcing

• tiations, the

negotiations that it was nnel and support in June. cisions will be esponds with nd working y’s ntensified

• ability. The

fit margin of t is to reduce cost reductio et level with

• f 163 million
• volume-

2). Capacity d a contracti epreciation o were iod, amounti rading, y, the decrea cent to 90.0

• pe
• f

y 8 e d its s e 6 e

• n

n

• n
• f

ng ase

SLIDE 4

million euro denominate which refers derivatives euros (-17.5 Finnair’s inc currency de

• later. This is

not included currency de for January– the compan million euro after taxes w Unit revenu traffic and b to 5.8 euro 2.6 per cent cent and am per cent fro Balance sh The Group’s euros on 31 (5.8). Share income sho Shareholde currency de according to after deferre Cash flow a Finnair cont investments (-11.5), and The equity r per cent (80 (552.7) and company re which sale a The compan million euro the option o employmen entirely unu matures at t

• s (101.6) du

ed operationa s to the oper and in the va 5). come statem enominated f s an unrealis d in the opera enominated f –March inclu ny’s restructu

• s (-13.6). Th

was -28.1 m e per availab business trav cents (6.1). E t from the co mounted to 6 m previous y heet on 31 M s balance sh 1 March 2013 eholders’ equ

• wing a loss.

ers’ equity inc erivatives use

• IAS 19. Th

ed taxes. and financia tinues to hav

• s. Net cash f

d net cash flo ratio was 30. 0.3). At the e interest-bea epaid an airc and leasebac ny’s liquidity

• s (401.4) at
• f re-borrowin

nt pension ins used 180 mill the end of Ju e to the pers al costs decr rating result e alue of foreig ment includes fleet mainten sed valuation ational result fleet mainten uded items re uring, amoun he result befo illion euros (- ble seat kilom vel and the d Excluding th

• mparison pe

6.43 euro cen year’s level a March 2014 heet totalled 2 3). Sharehold uity declined cludes a fair ed for hedgin e value of th al position ve a strong fi low from ope

• w from inves

.8 per cent (3 end of the pe aring net deb raft financing ck agreemen remained st the end of th ng employme surance com ion euro syn une 2016. sonnel reduc reased to 582 excluding no gn currency-d s the change ance reserve n result based

• t. The chang

ance reserve elated to the ting in total t

• re taxes for
• 15.7).

metre (RASK epreciation o e effect of ex

• eriod. Unit co

nts (6.50). Un and amounte 2,056.2 millio ders’ equity t in the first q value reserv ng as well as e item at the nancial posit erating activit stments total 34.4) and ge eriod under re bt stood at 32 g loan of 107 nts have bee trong in the f he period. In ent pension f

• mpany. Drawi

ndicated cred ctions implem 2.1 million eu

• n-recurring i

denominated in the fair va es that took d on IFRS, w ge in the fair es amounted sale of Finn to 12.7 millio January–Ma K) declined, p

• f the Japane

xchange rate

• st per availa

nit cost exclu ed to 4.37 eu

• n euros at t

totalled 625. uarter of 201 ve that is affe s actuarial ga e end of the f tion, which s ties in the fir lled 233.6 m earing was 5. review, intere 2.6 million eu 7 million euro en signed. first quarter o n addition to t fund reserve ing these res dit agreemen mented after t uros (615.1). tems, capita d fleet mainte alue of deriva place during where the res value of deri d to -6.9 milli catering, flee

• n euros (-1.4

arch was -33 primarily due ese yen by 4 e fluctuations able seat kilo uding fuel (CA ro cents. the end of th 9 million eur 14 due to the ected by chan ains and loss first quarter o supports busi rst quarter of illion euros ( .2 per cent (2 est-bearing d uros (151.3).

• s, which was
• f 2014. The

the cash fund es worth app serves requir nt, which was the comparis The compa l gains and c enance reser atives and in the period u sult has no c vatives and

• n euros (5.

et sale and le 4). The opera .9 million eu e to the weak 4.0 per cent y s, passenger

• metre (CASK

ASK excl. fu e period und

• s (738.3), w

e period’s res nges in the fa es related to

• f 2014 was

iness develo 2014 amoun

• 9.2).

20.6). The ad debt amounte During the p s used to fina Group’s cas ds on the ba roximately 43 res a bank gu s intended as son period. E any’s operatio changes in th rves, was -34 the value of under review cash flow effe in the value 3). The non- easeback ag ating result w ros (-18.6) a k developme year-on-year r unit revenue K) decrease el) decrease der review (2 which is 4.9 e sult and com fair values of

• defined ben
• 38.7 million
• pment and f

nted to -20.5 djusted gear ed to 498.8 m period under ance four A3 sh funds amo alance sheet, 30 million eu

• uarantee. Fin

s reserve fun Euro-

• nal result,

he fair value 4.2 million f foreign w but will fall d ect and which

• f foreign
• recurring ite

greements an was -28.4 and the result nt of leisure r and amoun e declined by d by 1.0 per ed by only 0.2 ,188.4 millio euros per sh prehensive f oil and nefit plans n euros (19.0 future 5 million euro ing was 71.2 million euros r review, the 330 aircraft, f

• unted to 466

, the Group h uros from its nnair has an nding and

• f

due h is ms nd t ted y 2 n are 0)

• s

2 for 6.3 has

SLIDE 5

Advance pa At the end o 200 million expenses to Capital exp In the first q and was pri including ad representing The current asset invest corresponds includes thr Fleet Finnair’s fle

• f the first q
• aircraft. In th

expired, and As of the en During the p as per mem In addition t

• company. T
• perated by
• ther airline

airlines. A350 aircra Finnair estim second half replace airc eight more a deliveries m Finnair has agreements

Fleet operate Finnair on 31 Narrow-body Airbus A319 Airbus A320 Airbus A321

ayments rela

• f the review

euros were i

• talled -5.6 m

penditure quarter of 201 marily relate dvance paym g a majority t state of the tments on co s to approxim ree finance le et is manage quarter of 201 he first quart d one new A nd of the first period under morandums o to the aircraf These aircraf y Finnair was es was 5.5 ye ft mates that its f of 2015. Fin craft currently

• aircraft. Finn

may have. the possibili s with differe

ed by 1.3.2014 y fleet

ted to fixed a w period, 65.0 n use. Net c million euros 14, capital ex ed to fleet mo ments, is estim

• f this total.

credit marke

• mpetitive te

mately 65 pe ease aircraft. ed by Finnair 14, Finnair it ter, two B757 A321 Sharkle t quarter of 2 r review, the

• f understand

ft operated by ft are operate s 9.6 years a

• ears. Finnair

s first A350 X nnair ordered y in use in lo nair is evalua ty to adjust t nt durations.

Seats 138/123 165 209/196

asset investm 0 million euro cash flow fro (-4.3) and fin xpenditure e

• difications a

mated at app et and Finnai

• rms. The com

er cent of the . r Aircraft Fina self operated 7 aircraft wer t aircraft was 2014, the com company co ding signed i y Finnair, its ed by other a at the end of t also has eig XWB wide-bo d 11 A350 XW ng-haul traffi ating alternati he size of its

# Own 9 7 10 6 10 4

ments were 7

• s of Finnair’
• m financing

nancial incom excluding adv and improvem proximately 1 ir’s good deb mpany has 3 value of the ance Oy, a w d 44 aircraft, re removed f s added to th mpany opera

• ncluded sale

n December balance she airlines, main the first quar ght leased ai

• dy aircraft w

WB aircraft f

• ic. The order

ives to minim s fleet flexibly

Leased (operational leasing) 2 4 6.0

70.6 million e s short-term amounted to me 0.8 millio vance payme

• ment. Capita

160 million e bt capacity e 38 unencumb e entire fleet o wholly-owned

• f which 15

from Finnair’ he fleet. ates an all-Ai e and leaseb r 2013. eet includes 2 nly by Flybe F rter of 2014, rcraft that it h will be delive rom Airbus in r includes an mise the effec y according t

A (finance leasing)

euros (30.3). commercial

• -114.7 millio

n euros (1.3) ents totalled l expenditure uros, with in nables the fin bered aircraf

• f 1.0 billion

d subsidiary are wide-bo s fleet accor rbus fleet. back agreeme 25 other airc

• Finland. The

and that of t has sublease red and add n 2005. Som n additional o cts that any p to demand a

Average C age 31.1 31.1 12.7 11.6 8.0

paper progr

• n euros (-1

). 33.1 million e for the full y vestments in nancing of fu ft, the book v

• euros. The b
• f Finnair Pl
• dy and 29 n

rding to plan ents for thre craft owned b e average age the Finnair fle ed to be ope ed to the flee me of these a

• ption for the

possible dela and outlook d

Change Or 12.2013 12.2012 +1

ram totalling 3.6). Financi euros (24.1) year 2014, n the fleet uture fixed- value of whic book value

• c. At the en

arrow-body as their leas e A330 aircr by the e of the fleet eet operated rated by othe et in the ircraft will delivery of ays in due to its leas

rdered Add

• ption

1

ial ch d ses aft t d by er se

d. ns

SLIDE 6

Boeing B757 Wide-body fl Airbus A330 Airbus A340 Airbus A350 Total Fleet owned and operated airlines on 31 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 Business se

• ffice servic

activities.

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

The turnove profitability

leet by Finnair d by other 1.3.2014* 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 ces and the m

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

er of Airline B

• f operations

227 297/271/263 270/269 na. Seats 68–72 76 100 craft and two E1

pment in Ja

• 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

• n

million

• ver

es

Business in J s declined su

8 1 7 5 44 23 # Own 12 12 5 5 8 8 25 25 170 aircraft hav

nuary–Marc 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 mainten t and mainte January–Mar

• ubstantially. T

4 2 18 ve been leased t

ch 2014 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 nance, Finna enance of pro

1–3 2014 508.1

• 34.5
• 28.2
• 5.5

4,533

rch fell by 8.0 Ticket reven

3 3 A to Flybe Nordic

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 air Travel Ret

• perties relat

1– 201 552.

• 20.
• 16.
• 2.

5,01

0 per cent to ue from sche

16.0 4.4 11.2 9.6 Average C age 31.1 31.1 4.7 7.8 5.3 5.5 and three E170

• 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 tail Oy and F ted to the co

–3 3 2 5 2 9 6

508.1 million eduled traffic

• 2
• 1

Change Or 12.2013 12.2012 0 aircraft to othe

• 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 Finnair’s prop mpany’s ope

Change %

• 8.0
• 68.5
• 74.2
• 2.6 %-p
• 9.6

n euros (552 c constitutes

11 12 rdered Add

• ption

er parties outsid

eporting the Aviation ance, Finnair maintenance ness segmen ales, custome financing of ces erations Oy, d, the Airline perty holding erational

2013 2,271.9 8.8 6.3 0.3 4,834

2.2) and the approximate

8 8 d. ns e

r e of nt. er s,

9 8 3 3 4

ely

SLIDE 7

65 per cent per cent of t than-expect comparison In January–

• verall capa

78.7 per cen while capac traffic as me increased b In January– The negativ developmen Japanese y weakness o leisure traffi destinations Asian and E traffic, while North Amer improved in The deman regarding th

• perators o

their 2013–2 volumes an with the num correspondi year-on-yea Cargo trans long-haul tra

• revenue. Th
• year. The ov

tonne kilom also operate Tokyo as pa approximate The arrival p scheduled f * Finnair’s e Finnair’s es

• f turnover.

total revenue ted developm n period. –March, Finn acity by 2.9 p

• nt. Measured

city fell by 0.9 easured in re by 8.5 per ce –March, unit ve developme nt of passeng yen still had a

• f the Finnish
• ic. Measured

s grew by ap European de e in Asian tra rican traffic d n this traffic a d for leisure heir own eco utside the G 2014 winter d revenues f mber of pass ing period la ar, to 87.1 pe sported on sc

• affic. In the f

he amount of verall load fa etres decrea ed separate art of capacit ely 26.5 per punctuality o flights, and 8

• estimate. The

stimates of ai Leisure traff

• e. The financ

ment in busin air traffic me per cent year d in revenue 9 per cent. E evenue pass

• nt. The load

revenue per ent of the ex ger traffic an a negative im h economy w d in seat kilom pproximately stinations gr affic market s eveloped po area for both traffic contin nomic situat roup decline season tours for the first q sengers in ch st year. The er cent. cheduled flig first quarter, f cargo and m actor of Finna ased by 1.3 p wet-leased c ty cooperatio cent of total

• f Finnair’s fli

86.4 per cent e estimate is irlines’ sales fic accounts f cial developm ness travel a easured in re r-on-year. Th passenger k uropean traf enger kilome factor in dom available se xchange rates d cargo reve mpact on pas was reflected metres, mark 4 per cent in rew by some share remain

• sitively in the

passenger t nued to weak ion slowed d ed substantia s to Egypt du

• uarter. The c

harter traffic d passenger lo hts (belly ca belly cargo a mail carried b air’s traffic w per cent, and cargo flights

• n with JAL C

cargo traffic ights was ve (84.6) of all based on M through thei for approxim ment of Airlin nd leisure tra evenue passe he passenge kilometres, A ffic grew by 7 etres grew by mestic traffic eat kilometre s of several enue in the fi ssenger reve in home ma ket capacity n the first qua 2 per cent.* ned largely un e first quarte raffic and ca ken in the firs down sales a ally year-on-y ue to unrest capacity of le decreasing b

• ad factor of

rgo) constitu accounted fo by Finnair in was at previou d the revenue to Hanoi, Ho

• Cargo. Sepa

in the first q ery good in Ja flights arrivin MIDT data col ir own sales mately 9 per c e Business w affic and the enger kilome er load factor Asian traffic d 7.6 per cent a y 12.0 per ce was 67.1 pe (RASK) fell income curre rst quarter o nue develop arket demand between He arter of 2014 Finnair incre nchanged fro

• er. Thanks to

argo. st quarter of 2 and decrease

• year. In addit

in the countr eisure traffic by 31.7 per c f leisure traff utes a signific

• r approximat

scheduled t us year's lev e tonne kilom

• ng Kong, Ne

rate cargo ca uarter. anuary–Marc ng on schedu llected on th channels, su cent, and car was affected depreciation etres decreas decreased b declined by 1 and capacity ent year-on-y er cent. by 4.0 per ce encies had a f 2014. In pa ment in Japa d, particularly lsinki and Fin . Market cap eased its ma

• m the comp

the transatla 2014 as con ed market pri tion, all indus ry, which was declined by cent in Janua fic decreased cant proportio tely 17 per c raffic grew by el at 65.1 pe metres by 1.2 ew York and apacity flight ch, with 87.0 ule. e sales volum uch as websi rgo for appro d in particular n of Japanes sed by 4.0 pe by 0.9 perce 1.6 per cent y y by 2.9 per c year, while c ent year-on-y a negative eff articular, the anese traffic y in business nnair’s Europ pacity betwee arket share in parison perio antic joint bu sumers’ unc

• ices. Purcha

stry operator s still reflecte 23.0 per cen ary–March co d by 6.2 perc

• n of the rev

cent of total lo by 9.9 per cen er cent, while 2 per cent. F d Brussels, as ts accounted 0 per cent (85 mes of trave ites.

• ximately 11

r by weaker- se yen from t er cent and ntage points year-on-year

• cent. Domes

apacity year. fect on the depreciation . The s travel and pean en Finnair’s n European

• d.*

usiness, sales certainty ses by tour s cancelled ed in the nt year-on-ye

• mpared to t

centage poin venue from

• ng-haul

nt year-on- e the availabl innair Cargo s well as to d for 5.9) of l agencies an he to r, stic n of s ear, he ts e nd

SLIDE 8

Air traffic s Route netw Finnair offer flights week at most 64 f The leading members in

• neworld ne

Through its Iberia and B between its Japan Airlin between Eu Other renew Finnair will i used on flig From the be Kong, Nago Travel Serv This busine and the bus and FTB’s s produces tra customers p sailing and

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

The turnove amounted to and weaker winter seas uncertainty

• f the packa
• travel. Busin

economy. services and

• rk and allia

rs connectio kly from Hels flights to Asia g airline in Br ncrease the a

• etwork. The

merger part British Airway members en nes and fellow urope and Ja wals and serv install new fu hts to Tokyo eginning of J

• ya, Osaka a

vices (Tour ss area cons siness travel subsidiary Es avel sector s package tour skiing holida

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

er of Travel S

• 74.2 million

r profitability

• n travel to E

regarding th age tours wa ness travel w d products nces ns between A sinki to other a per week. razil, TAM Ai alliance’s ann expansion a ner America

• ys. For Finna

nables bette w oneworld apan after the vices ull-flat seats

• and New Yo

une, aircraft and Shangha Operators a sists of the to agencies tha stravel, whic software and rs, tailored it ays.

• n

million

• ver

es

Services in Ja n euros (81.8 were due to Egypt at the eir own econ as sold at a d was also sub Asia and Eu Finnish and rlines, and U nual capacity also made on n Airlines, U air’s custome r connection alliance mem e review peri in most of its

• rk starting o

fitted with th ai. and Travel A

• ur operator

at were merg h operates in

• solutions. A

ineraries, flig anuary–Marc 8). The opera lower dema end of Augu nomic situatio discount at th stantially red rope with ov European d US Airways jo y by 20 per c neworld the l S Airways jo ers, new airli s to destinat mbers British iod, on 1 Apr s long-haul fl

• n 1 April an

he new full-fla Agencies) Aurinkomatk ged in Decem n the Baltic c Aurinkomatka ght and hotel

1-3 2014 74.2 0.3

• 0.3
• 0.3

704

ch decrease ating result w nd for packa ust due to tra

• n was refle

he last minute duced year-o er 200 route estinations.

• ined the on

cent and add argest allian

• ined the tran

nes joining o tions outside h Airways and ril 2014. eet in 2014. d flights to B at seats will a kat (Suntours mber, namely countries, as at Suntours s l packages, f

1- 201 81. 2. 2. 3. 78

d by 9.3 per was -0.3 milli age tours and vel restrictio cted in the d e, which dec

• n-year due t

pairs and al In the winter eworld allian almost a hu ce in the Am nsatlantic join

• neworld and

the Finnair n d Finnair sta The new Bu Beijing and Se also be used s), its subsid y Area, Finla well as Ama serves leisure flights and cr

• 3

3 8 9 5 1 87

cent from th ion euros (2. d Aurinkomat ns in force in emand for le creased the u to the weakn lso operates r season, Fin nce in March undred destin mericas. nt business w d the joint bu network. arted a joint b usiness Class eoul starting d on flights to diary operatin and Travel Bu adeus Finlan e travellers, o ruises, as we

Change %

• 9.3
• 90.3
• 109.9
• 3.4 %-p
• 10.5

he previous y .5). The decl tkat cancellin n the country eisure travel. unit revenue ness of the F more than 8 nnair operate . The new nations to the with Finnair, usinesses business s seats will b

• n 1 May.
• Hanoi, Hon

ng in Estonia ureau (FTB) d, which

• ffering its

ell as golf,

2013 251.7 3.1 1.6 0.6 751

year and ine in turnov ng all of its

• y. Consumers

A larger sha

• f package

innish 800 ed e be ng a, ver s’ are

SLIDE 9

Resolution The Annual approved th Directors an In line with t balance she The AGM a composed o Kerminen a Nigel Turne Directors en

• W. Heinema

The AGM d Deputy Cha fee of EUR meeting of t Authorised Nieminen a invoice. The Annual

• wn shares

is effective f also authori

• wn shares

Personnel The numbe period due t which is 9.0 4,533 (5,01 (787) peopl March 2014 Incentive s In February 2016, for th incentive ar commencin increase lon described in At the end o Employee S shareholder thereby stre ns of the Ann General Me he company’s nd CEO of th the proposal eet adopted f pproved the

• f seven (7)

nd Ms Gunv er were electe nds at the clo ann as the C ecided that t airman a fee 600 to a me the Board or Public Accou cting as the General Me s and/or use o for a period o ised the Boa

• s. The author

r of Finnair e to the structu 0 per cent few 6) people du e and other f 4. schemes for y, Finnair’s Bo e key person rrangement t g individual ng-term shar n more detai

• f March, Fin

Share Plan. T rs in the com engthen the e nual Genera eeting (AGM) s annual acc he company f

• f the Board

for the year 2 proposal of

• members. M

vor Kronman ed to the Boa

• se of the firs

Chairman of t the Chairman

• f 34,200 eu

mber residin r its Committe untant Pricew principal aud eeting author

• f shares as
• f 18 months

ard of Directo risation is effe employees in ural changes wer than in th uring the first functions 27 r manageme

• ard of Direc

nnel of the F hat Finnair’s

• plans. The p

reholder valu l in a Stock E nnair’s Board The purpose mpany, to pro employees’ i al Meeting ) of Finnair P counts for the from liability. d of Directors 2013. the Shareho Ms Maija-Liisa were re-elec ard as new m st Annual Ge the Board of n of the Boar uros and the ng in Finland ees. waterhouseC

• ditor. Auditor

rised the Boa

• collateral. T

s from the re

• rs to decide

ective for a p n the first qua s in the comp he previous y

• quarter. In t

9 (258) peop ent and pers ctors approve innair Group s Board of Di purpose of the ue and also to Exchange Re d of Directors

• f the plan e
• vide long-ter

nterest in the Plc was held e fiscal year . s, the AGM d

• lders’ Nomin

a Friman, Mr cted to the B

• members. Th

eneral Meetin Directors. rd of Directo

• rdinary me

and EUR 2, Coopers cont r fees are pa ard of Directo The authorisa esolution of th

• n the dispo

period of 18 arter of 2014

• pany. The Gr
• year. The Ai

the review pe

• ple. The num

sonnel ed a new pe

• p. The share

rectors appro e share plan

• commit the

elease publis s decided to established i rm rewards t e developme in Helsinki, F 2013 and dis decided that nation Comm

• r. Klaus W. H
• ard of Direc

he term of off ng following rs will be pai embers a fee 400 to a mem tinues as Fin id in accorda

• rs to decide

ation applies he General M

• sal of a max

months from 4 was signific roup employe rline Busines eriod, Travel mber of emplo rformance sh plan is a par

• ved in 2013

n is to encour e manageme shed on 11 F launch a new n 2013 is to through pote ent of Finnair Finland on 27 scharged the no dividend mittee that the Heinemann, M

• ctors. Ms. Ja

fice of the me their election id an annual

• f 30,000 eu

mber residin nnair’s audito ance with the e on the repu to a maximu

• Meeting. The

ximum of 5,0 m the resolutio cantly lower t ed an averag ss segment e Services em

• yees stood

hare plan, co rt of Finnair’s 3, and which rage the man ent to the com February 201 w 12-month s encourage t ntial share p r’s sharehold 7 March 201 e members o is paid base e Board of D

• Mr. Jussi Itäv

aana Tuomin embers of th

• n. The AGM

fee of 61,20

• uros. In addi

g abroad is p

• r, with APA

e auditor’s re urchase of the um of 5,000,0 e Annual Gen 000,000 of th

• n of the Ge

than in the co ge of 5,516 ( employed an mployed an a at 5,473 (6,1

• vering the y

s long-term s consists of a nagement to

• mpany. The s

14. savings perio the employee price apprecia der value. Th

• 4. The meet
• f the Board

ed on the Directors be vuori, Mr. Ha nen and Mr he Board of elected Klau 00 euros, the tion, a meeti paid for each Mikko easonable e company’s 000 shares a neral Meeting e company’s eneral Meetin

• mparison

(6,061) peop n average of average of 70 117) on 31 years 2014– share-based annually work to share plan is

• d under the

es to become ation and e employee ting

• f

arri us e ing h s and g s ng. le, 04 s e e

SLIDE 10

share plan h Exchange R Share price At the end o the share w NASDAQ O average pric million euro The numbe Finnish stat investors or The numbe returned to 2014, Finna One flaggin Skagen AS cent), as a r Corporate Finnair publ Board of Dir Statement f the Global R interested s Encompass the 2013 An performanc performanc Topics cove and socio-e 2008 becam the United N reporting.  Finn set 8.1/  Finn Con has been we Release publ e developme

• f March 201

was 2.69 euro OMX Helsinki ce 2.66 euro

• s (26.9), wer

r of shares re te owned 55. r in the name r of own sha Finnair purs air held a tota g notification increased to result of sale responsibil lished its An rectors, the G for 2013. The Reporting Ini stakeholders sing objective nnual Report e of the Finn e. ered in detail economic foo me one of the Nations Envi nair’s overall for it. The w /10. nair's fuel co nsumption an ell received b lished on 27 ent and trad 14, Finnair’s

• s (2.55). Du

i Stock Exch

• s (2.88). Som

re traded. ecorded in F .8 per cent (5 e of a nomine ares held by F uant to the ru al of 306,260 n was made

• 7,419,573 s

es of shares c ity nual Report Group Finan e Annual Rep tiative (GRI) and the gen es of what we t measures a nair Group, a in the Annu

• tprint in soci

e first airlines ronment Pro l customer sa eighted over

• nsumption a

nd emissions by personnel. March 2014 ding market value uring the Jan ange was 2. me 4.6 millio Finnair’s Trad 55.8) of Finn ee. Finnair increa ules of the co 0 of its own s during the re shares, equiv completed o for 2013 in M cial Stateme port is also p . Shareholde eral public a ere previous and accounts and identifies al Report inc

• ety. Finnair h

s to report ac

• gram, is the

atisfaction w rall score giv and CO2-em s per availab . The share p 4. e stood at 34 uary–March 87 euros (3.

• n (9.4) of the

de Register e air’s shares, ased by 27,0

• mpany’s pe

shares, repre eview period valent to 5.7

• n 5 May 201

March 2014. ents, Auditor’ prepared acc ers, investors at large comp sly published s for the finan s and explain clude Finnair has reported ccording to G most widely was close to t ven by custom issions decre ble seat kilom plan is descr 44.7 million e period, the h 24), the lowe e company’s entry was 12 while 14.2 p 092 shares in erformance s esenting 0.2 p , as the com 79 per cent of 3. The Annual s Report and cording to G3 s, analysts, m prise the repo as separate ncial, econom s the strateg r’s strategy, p d on environm GRI guideline y recognised the level see mers for the eased by 3.7 metre remain ribed in more euros (326.7) highest price est price 2.39 s shares, with 8,136,115 at per cent (11.0 n March 201 share plan fo per cent of th bined holdin f all shares a Report inclu d Finnair’s C 3 disclosure g media, custo

• rt’s intended

e Financial an mic, social a gic business product deve mental susta

• es. The GRI,

internationa n in recent y flight experie 7 per cent fro ed at the las e detail in a S ), and the clo e for a Finnai 9 euros (2.40 h a total valu t the end of t 0) were held 4, as the sha

• r 2010–2012

he total shar gs of funds m and votes (m udes the Rep Corporate Go guidelines es

• mers, emplo

d audience. nd Sustainab nd environm ramifications elopment, fle ainability sinc formed with al authority on years, achiev ence in Janu

• m previous

st year's leve Stock

• sing price o

r share on th 0) and the ue of 12.2 the period. T d by foreign ares were

• 2. On 31 Mar

e capital. managed by more than 5 p port of the

• vernance

stablished by

• yees, other

bility Reports mental s of this eet, network, ce 1997, and the support n sustainabil ving the targe ary–March w year. l. f he The rch per y s, in

• f

ity et was

SLIDE 11

Significant Aviation is a disruptions, managemen are not with potentially h

• months. Thi

The achieve involve risks suppliers ca power in rel Negotiation that, if realis uninterrupte The aviation Estimating t

• difficult. Exa

regulation a the Court of regulations have increa Finnair’s ris company’s 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 months on a effect of app Finnair’s for sales reven denominate Japanese y (2.6%). App important pu

• costs. Signi

t near term r an industry th seasonal va nt process to hin the compa have a signif is list is not i ement of the

• s. For examp

an have a ne lation to Finn s on cost red sed, could ha ed continuity n industry is the impacts o amples of su and other env f Justice of th

• n the repor

ased substan sk manageme website at w 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 3 a rolling basi proximately 6 reign exchan ue denomina ed in euros. I yen (7.3% of proximately h urchasing cu ficant dollar- risks and un hat is globall ariation and c

• ensure that

any’s full con icant impact ntended to b strategic ad ple, quality o egative effect nair. ductions betw ave an effect

• f its operat

affected by a

• f the regula

ch regulatory vironmental r he European rting of non-f ntially. ent and risks www.finnairgr d sensitivitie riation of the uarter and a creases seas t change in th 15 million eu passenger tra al activities, f nificant expe 32 million eu is), taking he 61 million eu nge risk arise ated in foreig n the first qu turnover), th half of the Gr urrency is the

• denominated

ncertainties y sensitive to changes in e t risks are ide

• ntrol. The risk
• n Finnair’s

be exhaustive vantages an r availability t on Finnair’s ween Finnair t on the achie tions and the a number of atory changes y projects inc regulation, E n Union in Oc financial infor s related to th roup.com. 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 edging into ac uros on Finna es primarily fr gn currencies uarter of 2014 e Chinese y roup’s operat e US dollar, w d expense ite

• economic c

economic tre entified and ks and unce business, fin e. nd cost reduc issues and/o s product and r and the trad evement of t e company’s regulatory p s on airlines’ clude interna EU regulation ctober 2012 rmation (resp he company’ 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

• ccount. With

air’s operatin rom fuel and

• s. Approxima

4, the most i uan (5.1%), ting costs are which accou ems are airc cycles and a

• nds. Finnair

mitigated as rtainties desc nancial resul ctions sought

• r unexpecte

d profitability de unions re the company reputation. rojects at the ’ operational ational regula ns on privacy regarding flig ponsibility) a ’s operations

• 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 hout hedging ng result at a d aircraft purc ately 64 per c mportant oth the Swedish e denominat nts for appro craft leasing p lso reacts qu has impleme much as po cribed below lt and future t through Fin ed additional y, or suppliers presenting it y’s cost reduc e EU and inte activities an ation related y protection a ght passenge nd other stak s are describ 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 , a 10-per-ce n annual leve chases, aircr cent of the G her foreign sa h crown (5.2% ted in foreign

• ximately 40

payments an uickly to exte ented a com

• ssible, altho

w are conside

• utlook with

nnair’s partne costs of par s may obtain ts employees ction targets ernational le nd/or costs in to emission and the decis ers’ rights. In keholder req bed in more d 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 ent change w el. raft leasing p Group’s turno ales currenci %) and the U n currencies. per cent of a nd fuel costs ernal prehensive r ugh many ris ered to in the next 1 ership projec rtnerships an n bargaining s involve risk , the vels. n advance is trading, nois sion made by n addition, quirements detail on the y very much

• portional

leisure and affic has an change in th erating resul s fuel costs a fuel has an llowing 12 would have a payments and

• ver is

ies were the US dollar The most all operating as well as risk sks 2 cts nd ks se y at e lt. are an d

SLIDE 12

traffic charg denominate A 10-per-ce Finnair’s op

• account. W

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

for fuel purc hedging rati basket was Events afte Japan Airlin between Eu In April, the stop-the-clo be covered trading syst Tuomo Mer

• 2014. Aurin

Finnair Trav continuing i Finnair’s sa Flight Atten and Growth Association April 2014 a The negotia Finnair sign company, o approximate

• f the three

Financial re Finnair’s Int the Interim r

• ges. The larg

ed in US dolla ent change in perating resu Without hedgi 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 chases was 7 io for a dolla 70 per cent. er the review nes and fellow urope and Ja European C

• ck model wi

by emission tem. retniemi step komatkat is vel Retail, ha n his role for vings negoti dants' Assoc h Pact in Nov (SLL) are o and concern ations impact ned a Momer

• n the sale of

ely USD 40 m aircraft will n eporting 20 terim report f report for 1 J est investme ars. 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 18 million eu tself against such as forw

• Directors. Fu

eases toward 60 per cent fo 75 per cent o r basket ove . w period w oneworld a apan on 1 Ap Council confir ll remain in e s trading. Th pped down fro a tour opera as been appo r Finnair Trav ations with th ciation (SLSY vember 2013

• ngoing. Finn

the employe t eight differe randum of Un f three Embr million, and t not have sign 14 for 1 January January – 31 ents, namely

• llar exchang

ual level (for t r-cent change ual level. The ate strongly w

• ximately 6 m

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

• r the followi
• ver the follo

er the followin alliance mem pril 2014. rmed the am effect until th he decision s

• m his positi

tor that is a s

• inted the Ma

vel Retail. he Finnish A Y), which we 3, were prove nair continue ees working i ent employee nderstanding raer 170 aircr the transactio nificant impa y – 30 June 2 September y the acquisit ge rate has a the following e would have e sensitivity a with the US d million euros

• count. Witho

air’s operatin currency, int s, swaps and es are hedge f the hedging ng six month

• wing six mo

ng 12 months mbers British mendment of e end of 201 supports the ion as Manag subsidiary of anaging Dire Aviation Unio ere agreed up en unsuccess es employee in administra e groups. g with Infinity raft on 5 May

• ns are expe

act on Finnai 2014 will be 2014 on Frid ion of aircraf an effect of a g 12 months o e an effect of analysis assu

• dollar. A 10-

s on Finnair’s

• ut hedging,

ng result at a erest rate an d options, ac ed for 24 mon g period. The

• hs. At the end

nths and 71 s was 71 per Airways and the Directive 16, which me ICAO’s aim ging Director f Finnair Gro ector of Aurin n (IAU), the T pon as a par

• sful. Negotia

consultation ative and sup y Aviation Ca y 2014. The ected to close r’s 2014 resu published on day 31 Octob ft and their sp pproximately

• n a rolling b

f approximat umes that the per-cent cha s operating re a 10-per-cen n annual leve nd jet fuel po ccording to th nths forward e higher and d of the revie per cent for t r cent, and th d Finnair star e on emission eans that only to move tow r of Aurinkom

• up. Timo Ko

nkomatkat on Trade Union t of the natio tions with the n negotiations pport function apital LLC, a value of the e in the seco ult. n Friday 15 A ber 2014. pare parts, a y 20 million e basis), taking tely 70 millio e Chinese yu ange in the e esult at an a nt change w el.

• sitions by us

he risk mana

• n a rolling

lower limits ew period, th the whole ye he hedging r rted a joint b ns trading in y flights insid wards a globa matkat-Sunto

• usa, Managi

n an interim b n PRO and th

• nal Finnish E

e Finnish Pil s that comm ns as well as US-based a arrangemen

• nd half of 20

August 2014 are mainly euros on g hedging int n euros on uan and the uro-yen nnual level (f

• uld have an

sing different agement polic basis, and th

• f the degre

he hedging ra

• ear. The

atio for a yen usiness

• aviation. Th

de the EEA w al emissions

• urs on 24 A

ing Director o basis while a he Finnish Employment

• ts'

enced on 2 s cabin crew. ircraft leasin nt is

• 014. The sale

and to for n t cy he ee atio n e will pril

• f

also t g e

SLIDE 13

FINNAIR PL Board of Dir Briefings Finnair will h

• ffice at Tie

The confere code 25585 For further Chief Finan Erno Hilden Financial Co Mari Repon Investor Re Kati Kakso LC rectors hold a press etotie 9. An E ence may be 56# r information cial Officer n, tel. +358 9

• mmunicatio

nen, tel. +35 lations Office

• nen, tel. +35

conference English-langu e attended by n, please co 9 818 8550,

• ns and Inve

8 9 818 4054 er 58 9 818 278

• n 7 May 20

uage telepho y dialling you

• ntact:

erno.hilden@ stor Relation 4, mari.repon 80, kati.kakso 014 at 11:00

• ne conferenc

ur local acces @finnair.com ns Director nen@finnair

• nen@finna

a.m. and an ce for analys ss number +3 m .com ir.com, analyst brie sts will begin 358 800 770 efing at 12:30 at 4:00 p.m 0 306 and us 0 p.m. at its . Finnish time ing the PIN e.

SLIDE 14

Key Figures Q1 2014 Q1 2013 Change % 2013 Turnover and result Turnover, EUR million 543.3 593.2

• 8.4

2,400.3 Operational result, EBIT, EUR million *

• 34.2
• 17.5
• 95.1

11.9 Operational result, % of turnover

• 6.3
• 3.0
• 3.3 %-p

0.5 Operating result, EBIT, EUR million

• 28.4
• 13.6
• 108.4

7.9 Operational EBITDAR, EUR million 17.4 33.3

• 47.7

210.1 Result before taxes, EUR million

• 33.9
• 18.6
• 82.7

26.8 Net result, EUR million

• 28.1
• 15.7
• 79.4

22.9 Balance sheet and cash flow Equity ratio, % 30.8 34.4

• 10.3

32.6 Gearing, % 5.2 20.6

• 74.8

19.9 Adjusted gearing, % 71.2 80.3

• 11.3

79.2 Gross investment, EUR million 33.1 24.1 37.2 77.3 Return on capital employed, ROCE, 12 months rolling, % 2.7 3.3

• 18.3

3.6 Return on equity, ROE, 12 months rolling, % 1.5 1.9

• 18.7

3.2 Net cash flow from operating activities, EUR million

• 20.5
• 11.5
• 78.4

142.4 Share Share price at the end of quarter, EUR 2.69 2.55 2.77 Earnings per share from the result of the period, EUR **

• 0.22
• 0.12
• 78.1

0.18 Earnings per share, EUR

• 0.24
• 0.15
• 61.8

0.11 Traffic data, unit costs and revenue Passengers, 1,000 2,214 2,160 2.5 9,269 Available seat kilometres (ASK), million 7,481 7,702

• 2.9

31,162 Revenue passenger kilometres (RPK), million 5,885 6,129

• 4.0

24,776 Passenger load factor (PLF), % 78.7 79.6

• 0.9 %-p

79.5 Unit revenue per available seat kilometre, (RASK), cents/ASK 5.81 6.06

• 4.0

6.24 Unit revenue per revenue passenger kilometre, yield, cents/RPK 6.42 6.68

• 3.9

6.86 Unit cost per available seat kilometre, (CASK), cents/ASK 6.43 6.50

• 1.0

6.47 CASK excluding fuel, cents/ASK 4.37 4.38

• 0.2

4.35 Available tonne kilometres (ATK), million 1,134 1,149

• 1.3

4,709 Revenue tonne kilometres (RTK), million 738 747

• 1.2

3,107 Cargo and mail, tonnes 35,220 32,049 9.9 146,654 Cargo traffic unit revenue per revenue tonne kilometre, cents/RTK 23.49 25.42

• 7.6

25.14 Overall load factor, % 65.1 65.0 0.1 %-p 66.0 Flights, number 23,982 23,518 2.0 97,360 Personnel Average number of employees 5,516 6,061

• 9.0

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, non-recurring items and capital gains. 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 15

Consolidated income statement in mill. EUR Q1 2014 Q1 2013 Change % 2013 Turnover 543.3 593.2

• 8.4

2,400.3 Other operating income 4.5 4.4 3.9 18.8 Operating expenses Staff costs

• 90.0
• 101.6
• 11.4
• 381.3

Fuel

• 161.0
• 169.4
• 5.0
• 689.9

Lease payment for aircraft

• 16.2
• 14.7

10.4

• 57.5

Other rental payments

• 39.4
• 35.6

10.8

• 152.0

Fleet materials and overhaul

• 30.3
• 35.6
• 14.8
• 125.8

Traffic charges

• 51.6
• 50.1

3.1

• 222.3

Ground handling and catering expenses

• 63.2
• 63.5
• 0.5
• 257.3

Expenses for tour operations

• 25.1
• 28.1
• 10.5
• 89.4

Sales and marketing expenses

• 14.3
• 17.9
• 20.2
• 72.9

Depreciation

• 35.5
• 36.2
• 2.0
• 140.7

Other expenses

• 55.4
• 62.4
• 11.3
• 218.1

Operational result, EBIT

• 34.2
• 17.5
• 95.1

11.9 Fair value changes of derivatives and foreign currency denominated fleet maintenance reserves

• 6.9

5.3 <-200 % 21.7 Non-recurring items 12.7

• 1.4

> 200 %

• 25.7

Operating result, EBIT

• 28.4
• 13.6
• 108.4

7.9 Financial income 0.8 1.3

• 39.0

42.6 Financial expenses

• 5.6
• 4.3
• 32.4
• 19.7

Share of result in associates and joint ventures

• 0.7
• 2.0

66.3

• 4.0

Result before taxes

• 33.9
• 18.6
• 82.7

26.8 Direct taxes 5.8 2.9 100.5

• 3.9

Result for the period

• 28.1
• 15.7
• 79.4

22.9 Result for the period attributable to shareholders of the parent company

• 28.2
• 15.8

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

• 0.24
• 0.15

0.11 Earnings per share from the result of the period

• 0.22
• 0.12

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 16

Consolidated balance sheet in mill. EUR 31 Mar 2014 31 Mar 2013 2013 ASSETS Non-current assets Intangible assets 18.4 23.2 19.3 Tangible assets 1,152.6 1,312.9 1,292.6 Investments in associates and joint ventures 7.5 10.4 8.2 Financial assets 20.2 22.0 20.5 Deferred tax asset 8.6 0.0 0.0 Non-current assets total 1,207.3 1,368.4 1,340.6 Short-term receivables Inventories 17.0 11.3 19.9 Derivatives 29.0 60.1 43.6 Trade and other receivables 324.0 309.6 237.1 Money market investments 165.6 361.6 335.9 Cash and cash equivalents 300.7 39.8 122.9 Current assets total 836.3 782.3 759.4 Non-current assets held for sale 12.6 37.6 17.7 Assets total 2,056.2 2,188.4 2,117.6 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity Share capital 75.4 75.4 75.4 Other equity 549.9 662.2 601.9 Total 625.4 737.6 677.3 Non-controlling interest 0.5 0.7 0.7 Equity total 625.9 738.3 678.0 Long-term liabilities Deferred tax liability 0.0 8.5 3.4 Long-term interest-bearing liabilities 369.3 373.4 385.5 Pension obligations 25.1 8.8 10.6 Provisions 75.4 86.3 69.3 Other long-term liabilities 26.7 20.5 25.4 Long-term liabilities total 496.5 497.4 494.1 Short-term liabilities Provisions 30.1 36.2 40.5 Short-term interest-bearing liabilities 129.6 179.3 207.5 Derivatives 34.2 12.6 29.1 Trade payables and other liabilities 739.9 721.9 666.1 Liabilities of non-current assets held for sale 0.0 2.6 2.3 Short-term liabilities total 933.8 952.6 945.5 Liabilities total 1,430.3 1,450.1 1,439.6 Shareholders' equity and liabilities total 2,056.2 2,188.4 2,117.6 Comparative figures for 2013 have been restated due to change in accounting principles related to treatment of

• verhauls. In addition, comparative figures in balance sheet have been effected by the netting of deferred taxes. See

note 2 for more information.

SLIDE 17

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

• 28.2
• 28.2

0.1

• 28.1

Items of comprehensive income

• 23.7
• 23.7
• 23.7

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

• 23.7

0.0

• 28.2

0.0

• 51.9

0.1

• 51.8

Dividends paid 0.0

• 0.2
• 0.2

Share-based payments

• 0.1
• 0.1
• 0.1

Shareholders' equity, 31 Mar 2014 75.4 168.1

• 38.7

247.3 54.3 118.9 625.4 0.5 625.9 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 0.0 247.1 112.6 171.1 774.4 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

• 15.7
• 15.7

0.1

• 15.7

Items of comprehensive income 19.0 19.0 0.0 19.0 Translation difference

• 0.1
• 0.1

Comprehensive income for the financial period 0.0 0.0 19.0 0.0

• 15.7

0.0 3.3

• 0.1

3.1 Dividends paid

• 12.7
• 12.7
• 12.7

Purchase of own shares

• 1.7
• 1.7
• 1.7

Shareholders' equity, 31 Mar 2013 75.4 168.1 19.0 245.5 58.5 171.1 737.6 0.7 738.3

SLIDE 18

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

• 28.1
• 15.7

22.9 Operations for which a payment is not included * 21.4 30.9 115.9 Other adjustments to profit for the period Interest and other financial expenses 5.6 4.3 19.7 Interest income and other financial income

• 0.1
• 1.2
• 38.6

Income taxes

• 5.8
• 2.9

3.9 Changes in working capital

• 11.6
• 21.6

35.8 Interest paid

• 2.6
• 3.1
• 12.1

Paid financial expenses

• 2.0
• 1.0
• 3.8

Received interests 2.7 0.9 1.4 Taxes paid 0.0

• 2.0
• 2.7

Net cash flow from operating activities

• 20.5
• 11.5

142.4 Cash flows from investing activities Investments in intangible assets

• 0.1
• 0.6
• 2.3

Investments in tangible assets

• 39.2
• 18.5
• 96.4

Net change of financial interest bearing assets at fair value through profit and loss 90.4 9.0 14.6 Net change of shares classified as available for sale 0.0 0.0 53.7 Divestment of fixed assets and group shares 181.8 0.0 8.9 Dividends received 0.0 0.1 1.2 Change in non-current receivables 0.7 0.7 1.0 Net cash flow from investing activities 233.6

• 9.2
• 19.3

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

• 114.7
• 11.9
• 115.0

Hybrid bond repayments 0.0 0.0

• 52.4

Hybrid bond interest and expenses 0.0 0.0

• 15.4

Purchase of own shares 0.0

• 1.7
• 1.7

Dividends paid 0.0 0.0

• 13.0

Net cash flow from financing activities

• 114.7
• 13.6
• 47.4

Change in cash flows 98.4

• 34.3

75.7 Liquid funds, at beginning 331.8 256.1 256.1 Change in cash flows 98.4

• 34.3

75.7 Liquid funds, at end 430.2 221.7 331.8 0.0 0.0 Notes to consolidated cash flow statement * Operations for which a payment is not included Depreciation 35.5 36.2 140.7 Employee benefits 2.9 0.5 7.3 Fair value changes in derivatives and changes in exchange rates of fleet overhauls 6.9 5.3

• 21.7

Other adjustments

• 23.9
• 11.1
• 10.5

Total 21.4 30.9 115.9 Financial asset at fair value 165.6 361.6 335.9 Liquid funds 300.7 39.8 122.9 Short-term cash and cash equivalents in balance sheet 466.3 401.4 458.8 Maturing after more than 3 months

• 36.1
• 132.2
• 126.5

Shares held to trading purposes 0.0

• 47.5
• 0.4

Total in cash flow statement 430.2 221.7 331.8 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 19

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 overhauls 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

• n 28 February 2014.

The business segments are Airline Business and Travel Services. Comparative periods have been restated according to new segment division.

SLIDE 20

Business segment data in mill. EUR Airline Business Travel Services Group eliminations Unallocated items Group External turnover 469.4 73.9 543.3 Internal turnover 38.7 0.3

• 39.0

0.0 Turnover 508.1 74.2

• 39.0

0.0 543.3 Operational result, EBIT

• 34.5

0.3

• 34.2

Operating result

• 28.2
• 0.3

0.0

• 28.4

Share of result in associates and joint ventures

• 0.7
• 0.7

Financial income 0.8 0.8 Financial expenses

• 5.6
• 5.6

Income tax 5.8 5.8 Non-controlling interest

• 0.1
• 0.1

Result for the period attributable to shareholders of the parent company

• 28.2

Depreciation 35.0 0.4 35.5 Business segment data in mill. EUR Airline Business Travel Services Group eliminations Unallocated items Group External turnover 511.7 81.5 593.2 Internal turnover 40.5 0.3

• 40.9

0.0 Turnover 552.2 81.8

• 40.9

593.2 Operational result, EBIT

• 20.5

2.9

• 17.5

Operating result

• 16.2

2.5

• 13.6

Share of result in associates and joint ventures

• 2.0
• 2.0

Financial income 1.3 1.3 Financial expenses

• 4.3
• 4.3

Income tax 2.9 2.9 Non-controlling interest

• 0.1
• 0.1

Result for the period attributable to shareholders of the parent company

• 15.8

Depreciation 35.8 0.4 36.2 Turnover in mill. EUR Q1 2014 Q1 2013 Change % 2013 Airline Business 508.1 552.2

• 8.0

2,271.9 Travel Services 74.2 81.8

• 9.3

251.7 Group eliminations

• 39.0
• 40.9

4.6

• 123.2

Total 543.3 593.2

• 8.4

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

• 28.2
• 16.2
• 74.2

6.3 Travel Services

• 0.3

2.5

• 109.9

1.6 Total

• 28.4
• 13.6
• 108.4

7.9 Employees average by segment Q1 2014 Q1 2013 Change % 2013 Airline Business 4,533 5,016

• 9.6

4,834 Travel Services 704 787

• 10.5

751 Other functions 279 258 8.1 274 Total 5,516 6,061

• 9.0

5,859 Q1 2013 Q1 2014

SLIDE 21

• 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 379.8

• 12.8

432.0 10.8 370.5

• 17.0

Fair value hedging of aircraft acquisitions 302.1 4.0 294.9 22.3 244.1 2.2 Currency hedging of lease payments 99.5

• 0.9

35.8 0.6 58.3

• 1.6

Hedge accounting items total 781.4

• 9.6

762.7 33.7 672.9

• 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) 364.5 3.4 179.0 3.8 407.9 2.4 Operational cash flow hedging (options) Call options 130.5 11.3 278.5 14.1 149.8 16.1 Put options 164.2

• 0.7

344.1

• 4.8

169.5

• 0.8

Balance sheet hedging (forward contracts) 19.3

• 0.3

32.7 0.8 20.4

• 1.2

Items outside hedge accounting total 683.3 13.4 834.3 13.9 747.5 16.5 Currency derivatives total 1,464.7 3.7 1,597.0 47.6 1,420.4 0.1 Commodity derivatives Hedge accounting items: Jet fuel forward contracts, tonnes 575,950

• 11.3

584,060 1.1 563,550 11.8 Electricity derivatives, MWh 20,388

• 0.1

0.0 17,568 0.0 Hedge accounting items total

• 11.4

1.1 11.8 Items outside hedge accounting: Jet fuel forward contracts, tonnes 17,500

• 0.3

0.0 18,000 0.8 Options Call options, jet fuel, tonnes 204,500 1.7 213,000 1.2 201,000 3.4 Put options, jet fuel, tonnes 204,500

• 1.3

268,500

• 2.5

201,000

• 1.1

Electricity derivatives, MWh 63,936

• 0.6

83,376

• 0.3

71,100

• 0.5

Items outside hedge accounting total

• 0.5
• 1.6

2.6 Commodity derivatives total

• 11.8
• 0.5

14.4 Interest rate derivatives Hedge accounting items: Interest rate swaps 150.0 3.3 0.0 0.0 150.0 1.2 Hedge accounting items total 150.0 3.3 0.0 0.0 150.0 1.2 Items outside hedge accounting: Cross currency Interest rate swaps 17.1 0.0 23.6 1.6 17.3 0.2 Interest rate swaps 25.0

• 0.4

25.0

• 0.9

25.0

• 0.5

Items outside hedge accounting total 42.1

• 0.4

48.6 0.7 42.3

• 0.3

Interest rate derivatives total 192.1 2.9 48.6 0.7 192.3 0.9 Derivatives total

• 5.3

47.8 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. 31 Mar 2014 31 Mar 2013 2013

SLIDE 22

• 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 31 Mar 2014 Level 1 Level 2 Level 3 Financial assets at fair value through profit and loss Securities held for trading 150.6 35.2 115.4 Derivatives held for trading Currency and interest rate swaps 3.3 3.3

• of which in fair value hedge accounting

3.3 3.3 Currency derivatives 23.6 23.6

• of which in fair value hedge accounting

5.2 5.2

• of which in cash flow hedge accounting

0.6 0.6 Commodity derivatives 0.9 0.5 0.4

• of which in cash flow hedge accounting

0.4 0.4 Total 178.3 35.2 142.7 0.4 Financial liabilities recognised at fair value through profit and loss Derivatives held for trading Interest rate swaps 0.4 0.4

• of which in fair value hedge accounting

0.0 0.0 Currency derivatives 19.9 19.9

• of which in fair value hedge accounting

1.2 1.2

• of which in cash flow hedge accounting

14.3 14.3 Commodity derivatives 12.7 12.7

• of which in cash flow hedge accounting

11.7 11.7 Total 33.0 0.0 33.0 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 2.3 2.3 Profits and losses in income statement total

• 0.3
• 0.3

In comprehensive income 0.0 Purchases (and sales) 0.0 Settlements (and issues)

• 1.6
• 1.6

Transfers to and from Level 3 0.0 Closing balance 0.0 0.4 0.0 0.4 Total profits and losses recognised for the period for assets held at the end of the reporting period In other operating expenses

• 0.3
• 0.3

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 23

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

The tax rate for the first quarter was -17.1 % (-15.6 %).

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

in mill. EUR 31 Mar 2014 31 Mar 2013 2013 Carrying amount at the beginning of period 1,311.9 1,354.2 1,354.2 Fixed asset investments 33.1 24.1 77.3 Change in advances 4.6

• 2.4

33.3 Disposals

• 142.9
• 2.8
• 11.0

Depreciation

• 35.5
• 36.2
• 140.7

Depreciation included in non-recurring items

• 0.3
• 0.9
• 1.2

Carrying amount at the end of period 1,171.0 1,336.1 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 7.1 18.6 9.8

• 11. NON-CURRENT ASSETS HELD FOR SALE

Non current assets held for sale 31 Mar 2014 31 Mar 2013 2013 Tangible assets 7.1 18.6 9.8 Inventories 5.5 16.5 5.4 Trade receivables and other receivables 0.0 2.5 2.5 Total 12.6 37.6 17.7 Liabilities of non-current assets held for sale 31 Mar 2014 31 Mar 2013 2013 Trade payables and other liabilities 0.0 2.6 2.3 Total 0.0 2.6 2.3

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

in mill. EUR 31 Mar 2014 31 Mar 2013 2013 Pledges on own behalf 218.7 577.0 503.7 Guarantees on behalf of group undertakings 70.4 66.0 67.6 Guarantees on behalf of others 2.3 2.5 2.3 Total 291.3 645.5 573.5 Investment commitments for property, plant and equipment at 31 March 2014 totalled 928 million euros (1,000).

• 14. OPERATING LEASE COMMITMENTS

in mill. EUR 31 Mar 2014 31 Mar 2013 2013 Lease commitments from fleet payments 496.5 155.3 259.2 Other lease commitments 239.5 244.9 244.8 Total 736.0 400.2 504.0 During the financial period the Group did not acquire 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

• f Finncatering Oy, which was sold during Q1 2014.

During the first quarter of 2014 Finnair amortized its loans according to the loan instalment program. In addition, Finnair repaid the loans related to the sold A330 aircraft.

SLIDE 24

• 15. RELATED PARTY TRANSACTIONS

in mill. EUR 31 Mar 2014 31 Mar 2013 2013 Transactions with associates and joint ventures Sales 18.2 17.3 65.5 Purchases 20.5 18.3 105.8 Non-current financial assets 9.9 9.9 9.9 Trade and other receivables 65.4 32.4 36.1 Other long-term liabilities 10.1 8.3 9.7 Pension obligations 24.8 8.3 10.5 Trade payables and other liabilities 2.4 1.8 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 Q1 2014 Q1 2013 Change % 2013 Profit for the period

• 28.1
• 15.7
• 79.4

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

112.5 0.0 Change in fair value of available-for- sale financial assets after taxes 0.0 10.6

• 100.0
• 10.4

Change in fair value of hedging instruments after taxes

• 14.6

10.6 <-200 %

• 4.2

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

• 9.1
• 2.3

<-200 %

• 0.2

Other comprehensive income items total

• 23.7

18.8 <-200 %

• 15.0

Comprehensive income for the financial period

• 51.8

3.1 <-200 % 7.9 Earnings attributable to shareholders

• f the parent company of the

comprehensive income statement

• 51.9

3.3 <-200 % 7.7 Earnings attributable to non- controlling interest of the comprehensive income statement 0.1

• 0.1

163.9 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 25

• 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