Finnair (FOY; NR/BB+ S) 2Q (3m to June) Earnings Call

• It's clarified the wide FY EBIT guidance range of €110-180m is to account for best/worst case and mid-point is ~effectively its guidance (i.e. €145m). That would be -21% yoy, a 4.7% margin on midpoint of revenue guidance (€3.1b) and a -17% miss on consensus €175m.
• Says North Atlantic routes (to and from US) doing well for everyone and it expects that to continue in Q3 - sees it reflecting US vs. (weaker) European economic backdrops.
• On the falling yields (we've seen this flagged in US airlines as well) it didn't give much colour heading forward outside noting it was demand dependent and the -4% fall this qtr was only a small normalisation from the elevated levels of last year. It says yields still above '19 levels...but so are costs and fuel.
• Finnair and its hub Helsinki Airport were not using the technology that caused disruptions to many airlines/airports this morning. Regardless, should be short-lived with CrowdStrike CEO tweeting a fix has been deployed.

Using stronger seasonal operating cash flow and new €500m issuance to pay down €25s, pension liabilities and leases alongside commenting a €1b cash pile is around its "long-term targets" demonstrates responsible approach from the co to the BS. We attribute the equity px action (near all time lows) to the FY EBIT guidance miss but also the lack of pay-outs they are getting - dividends have not been paid since 2019 (despite stated 1/3 payout policy) and buybacks have not been done since 2021. In credit - and at these levels of carry on 29s - we are more concerned about the downside, which is why the government ownership and explicit history of financial support is very supportive for us.

Value view on the 29s from is unch (pls scale risk to single carrier & bordering Russia tail risks). Numbers from this morning here.