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Finnair warned of a significant fall in operating profit this year due to the coronavirus outbreak, joining a growing list of airlines to cut their forecasts due to the travel disruption caused by the virus.
Finland’s national airline also said on Friday was scrapping its capacity growth target for this year, and would look into cutting costs by 40-50 million euros ($44-54 million), with measures under consideration including temporary layoffs.
Its shares dropped nearly 6% after the Helsinki market open.
“Finnair currently estimates that the coronavirus situation will decrease demand, resulting in a negative impact on revenue for Q2 2020,” the company said in a statement, adding this would result in a “significantly lower” operating profit for the year.
British Airways-owner IAG also warned on Friday its earnings would be hit by the virus outbreak this year, while budget airline easyJet said it had seen a “significant” softening of demand in and out of its northern Italian bases amid a spike in nearby infections.
Asia – where most virus cases have been recorded – accounts for more than 40% of Finnair’s passenger revenue, but on Feb. 7 the airline still estimated the direct financial impact of the outbreak would be relatively limited during the first quarter.
On Friday, the company withdrew its capacity growth guidance of approximately 4% for 2020, saying it planned to adjust it over the next months.
“As the coronavirus situation has entered a new phase with outbreaks in several new countries, we will take appropriate measures to adapt our costs, operations and resources to better match our revenues,” Chief Executive Topi Manner said.