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UPDATE 2-Finnair Q3 boosted by Asia, business traffic jump

Published 10/28/2010, 05:02 AM
Updated 10/28/2010, 05:04 AM

* Q3 EBIT 41.9 million euros vs f'cast range 9-32.5 million

* Q3 turnover up 26 pct to 551 mln euros vs f'cast 520 mln

* Says sees Q4 profit significantly down quarter-on-quarter

* Shares up over 6 percent at highest in more than 2 years

(Adds quotes, shares)

By Terhi Kinnunen

HELSINKI, Oct 28 (Reuters) - A pick-up in demand in Asian flights and business traffic helped Finnish national carrier Finnair swing back to profit in the third quarter, sending its shares to a more than two-year high.

Finnair's operating profit in July through September reached 41.9 million euros ($57.9 million) compared with a loss of 20.6 million a year ago, beating all forecasts which ranged from 9 million to 32.5 million in a Reuters poll.

"We have seen an increase in demand ... and it was particularly strong in Q3 and especially strong in the traffic between Europe and Asia," Chief Executive Mika Vehvilainen said in an interview published on Finnair's website.

"And at the same time the business travelers have returned also in the European flights."

These trends boosted Finnair's average ticket prices and lifted profits for the group, the company said in a statement coinciding with Deutsche Lufthansa saying it expects business to remain strong into 2011.

Shares in Finnair jumped more than 6 percent in early trade to levels last seen in August 2008 and were 3.3 percent higher at 5.57 euros by 0812 GMT, compared with a flat STOXX Europe 600 travel and leisure index.

Turnover grew 26 percent to 551 million euros, beating a mean estimate of 520 million in the poll.

"The company said unit revenues improved ... but we must remember this is a return to a realistic operating environment from a very difficult situation a year ago," said Nordea analyst Pasi Vaisanen.

The carrier said it expected the fourth quarter to be profitable, but to be significantly weaker than in the third quarter. (Editing by Karen Foster and David Holmes) ($1=.7242 Euro)

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