FINNAIR HAS WARNED that its financial performance will "decline substantially" this year following signs of a significant economic slowdown in Finland and key European markets.

The airline says that it will add no new destinations and maintain capacity at present levels over the year as it prepares for slower growth. Fleet plans, which include adding five McDonnell Douglas MD-80s and four chartered Boeing 757s, remain in place.

"As growth slows, measures to increase revenues and curb costs must be strengthened without delay," cautions chief executive Antti Potila. The gloom comes as Finnair reported a strong set of results for its 1995/6 financial year to March, helped by record traffic figures. Scheduled passenger services grew by nearly 18%. Pre-tax profits were also at a high of FIM533 million ($113 million) on sales which topped FIM7 billion.

Source: Flight International