1. Interim Report 1 January – 30 September 2007
Finnair Group
Interim Report 1 January – 30 September 2007

2. Finnair meeting expectations
Strong demand in scheduled traffic continues
In addition to Asia, European traffic is also growing
Finnair’s market share growing in international traffic departing from Finland
Unit revenues decreased due to new launches, price level improving towards end of year
Unit costs have fallen thanks to efficiency measures
FlyNordic sold to Norwegian Air Shuttle, 14 million euro sales profit

3. Improved results by efficiency programme
Q3/2007
Q3/2006
Change %
Turnover mill. €
545.2
515.4
5.8
EBITDAR excl. capital gains, fair values changes of derivatives and reorganization expenses
88.0
69.8
26.1
EBIT excl. capital gains, fair values changes of derivatives and reorganization expenses
39.2
22.5
74.2
One off items/ capital gains
17.3
0.1 -
Fair value changes of derivatives
3.4
-7.9
Operating profit/loss (EBIT)
59.9
14.7
Profit after financial items
55.9
13.5

4. Scheduled Passenger Traffic and Aviation Services improved
Profitability of scheduled traffic improved clearly, even as unit revenues decreased
Unit costs have fallen
Finnair Technical Services efficiency project is bearing fruit
Average prices for cargo have fallen due to tighter competition, but demand is picking up
Catering profitability improved
Northport still loss-making: Sweden ja Norway operations to be sold to Menzies Aviation

5. Aurinkomatkat-Suntours expands
Finland’s leading tour operator, strategy to expand in neighbouring areas
Acquired Estonia’s second largest tour operator Horizon Travel at start of year…
and St Petersburg area tour operator and travel agency Calypso in October
Growing target group increasingly wealthy middle class in Russia
Winglets installed on Leisure Traffic fleet (seven Boeing s), decreasing fuel consumption by five per cent

6. Unit costs decreased more than yield Change YoY%
Yield (EUR/RTK)
Unit costs (EUR/ATK)
2006
2002
2003
2004
2005
2007

7. Efficiency programme yielding results
80 million euro efficiency programme completed by end of year
Effect felt strongest in the second half of the year
Profit impact for 2007 over EUR 40 million
Full financial impact will begin in 2008
Jobs cut by around 600 in

8. Business growing, number of staff stable
Personnel
Personnel on average

9. Unit costs dropping Unit costs of flight operations* c/ATK
Q3/2007
2006
Unit costs of flight operations* c/ATK
-7.7%
+1.8 %
Unit costs of flight operations excl. fuel* c/ATK
-9.5%
-3.5 %
Personnel expenses c/ATK
-7.2%
-4.1 %
Fuel costs c/ATK
-2.0%
+24.1 %
Traffic charges c/ATK
-7.3%
-3.9 %
Ground handling and catering €/passenger
+18.7%
-1.0 %
Sales and marketing €/passenger
-12.3%
-7.9 %
Aircraft lease payments and depreciation c/ATK
-1.7%
+1.9 %
Other costs c/ATK
-15.3%
-3.1 %
* excluding fair value changes of derivatives
ATK = Available Tonne Kilometre

10. Productivity improved

11. Jet fuel prices going up

12. Jet fuel price risk hedging (Scheduled traffic, 30.9.2007)

13. Fuel costs a fifth of turnover
2007: ~20% of turnover (approx. 450 MEUR)
Finnair scheduled traffic has hedged 66% of its fuel purchases for the next six months, thereafter for the following 24 months with a decreasing level. Finnair leisure flights hedged 60% of summer traffic programme’s consumption.

14. Improved cash flow used for investments
Cash flow January-September
Cash flow statement (EUR mill.)
Q1-Q3/2007
Q1-Q3/2006
Cash flow from operations
169 23
Investments and sale of assets
-226
-149
Investments
-264
-195
Change of advances and others
+38
+46
Cash flow from financing 32 73
Change in liquid funds
-25
-53
Liquid funds at the beginning
273
339
Liquid funds at the end
248
286

15. Strengthening of capital structure by share offering Equity ratio and adjusted gearing%
Equity ratio
Adjusted Gearing

16. Asia growth continues on good level
Demand grew during January-September by 30.9%, passenger numbers 25.8%, cargo 18.9%
Passenger load factor 78.5%
Business Class selling well
59 flights a week to Asia
Non-stop flights to 10 destinations, daily to six
Growth in different markets in Asia diversifies risk
End of year capacity will grow by over 30%
Seoul new destination in 2008

17. Capacity in Asia has grown rapidly
China
2001:
3 flights/week
2007:
25 flights/week
Japan
2 flights/week
15 flights/week
India
2006:
12 flights/week

18. Long-haul network 2007 Tokyo 4 Nagoya 4 7 New York Osaka 7 Beijing 7
Shanghai 7
Guangzhou 4
Hong Kong 7
Helsinki
Bangkok 7
Delhi 7
Mumbai 5

19. Over third of revenue from Asia
Scheduled traffic passenger and cargo revenue January-September
Domestic
Europe
Asia US
Asia-Europe gateway 50%

20. New planes enable future growthIn
A330/A340 fleet of maximum 15 planes in total In
A350 fleet of maximum 15 planes in total

21. Most modern European fleet
Average age of European fleet four years
29 Airbus A320 family aircraft
A total of ten smaller Embraer 170s and five larger Embraer 190s in fleet, five larger aircraft arriving later
New aircraft increase flexibility and improve load factors, decrease costs and are eco-efficient

22. Planned share offering part of investment financing
Renewal and expansion of long-haul fleet part of Finnair strategy
Aircraft acquisitions in amount to almost two billion euros
Extraordinary General Meeting
Size of offering up to 250 million euros, existing shareholders would have a pre-emptive right to subscribe

23. Finnair’s vision 2017
Take further advantage of Helsinki’s geographical position
Via Helsinki a travel concept
The airline of choice for quality and environmentally conscious air travellers in intercontinental traffic in the Northern Hemisphere
A reliable and safe option in an uncertain world
As large European airports become increasingly congested, Helsinki-Vantaa Airport has plenty of room for construction and possibilities for development
Sustainable, profitable growth, an attractive investment

24. Finnair 2017 – ”On top of the World”

25. India opens up new opportunities
Indian traffic makes it possible to open the fastest connections between North America and India
Finland is situated along the shortest route
Demand expected to grow significantly
Russia’s air traffic markets expected to open up in the future, offering opportunities to complement network

26. Success factors Safe Expert, professional people doing quality work
Modern fleet
Sound finances
Trust
Caring for customers and personnel
Finnish
Reliable, responsible, punctual, professional
Creative
Modern, developing, innovative
Fresh
Clean, stylish, refreshing, uncomplicated

27. Future outlook Asian demand remains strong
Average price fall leveling out even though average route length increasing
Unit costs still decreasing
Cooperation with Norwegian continues
Expensive fuel will not increase costs significantly at the end of year because of hedging
Five collective agreements renewed
The operational result for the full year is expected to exceed 70 million euros, last quarter profitable

28. Appendices

29. Profitability development
Change in EBIT per quarter (Excluding capital gains, fair value
changes of derivatives and reorganization expenses)
MEUR
Liikevoiton muutos vuosineljänneksittäin (ilman käyttöomaisuuden myyntivoittoja, johdannaisten käyvän arvon muutoksia ja järjestelykuluja)
2002
2003
2004
2005
2006
2007

30. Average yield and costs EUR c/RTK & EUR c/ATK
Yield (EUR/RTK)
Unit costs (EUR/ATK)
2002
2003
2004
2005
2006
2007

31. Segment results Excluding capital gains, fair value changes of
Derivatives and reorganization expenses
2007
2006 Q3
MEUR
Scheduled Passenger Traffic
28.8
20.3
Leisure Traffic
7.8
8.2
Aviation Services
2.7
-4.6
Travel Services
1.3
0.9
Unallocated items
-1.4
-2.3
Total
39.2
22.5

32. Investments and cash flow from operations
MEUR
Operational net cash flow
Investments

33. Aircraft operating lease liabilities
MEUR
Flexibility, costs, risk management
On 30 September all leases were operating leases. If capitalised using
the common method of multiplying annual aircraft lease payments by
seven, the adjusted gearing on 30 September 2007 would have been
103,3%

34. ROE and ROCE Rolling 12 months%
ROE
ROCE

35. Emissions trading for air traffic
EU air traffic accounts for only 0.5% of all CO2 emissions in the world
Finnair in favour of emissions trading principles
Should be global
Competitively neutral
Investments already made in new technology should be taken into account
Open emissions trading

36. Customers can make environmental choices when flying
Choose an airline with a modern fleet
Fly in the right direction all the way, without unnecessary stopovers
shorter flight routes result in less emissions
Avoid large, congested airports
By making these choices, fuel consumption and emissions can drop by at best 30%!

37. Finnair Financial Targets
”Sustainable value creation”
Operating profit (EBIT)
EBIT margin at least 6% => over 120 mill. € in the coming few years
EBITDAR margin at least 17% => over 350 mill. € in the coming few years
EBITDAR
To create positive value over pretax WACC of 9,5%
Economic profit
Adjusted Gearing
Gearing adjusted for aircraft lease liabilities not to exceed 140 %
Pay out ratio
Minimum one third of the EPS

38. Finnair’s Financial Targets Description of targets
Operating profit (EBIT)
Turnover + other operating revenues – operating costs
Result before depreciation, aircraft lease payments and capital gains
EBITDAR
Economic profit
Operating profit EBIT – Weighted Average Cost of Capital
Adjusted Gearing
Interest bearing debt + 7*Aircraft lease payments – liquid funds) / (Equity + minority interests)
Pay out ratio
Dividend per share / Earnings per share

39. www.finnair.com Finnair Group Investor Relations
tel:
fax: