Finnair Says Drop In Ticket Prices Accelerating

Finnish national airline Finnair reported lower April passenger numbers and said a steep drop in business travel has led to an accelerated fall in air fares.

Capacity cuts enabled the carrier to increase the load factor of aircraft kept in service despite the drop in passenger numbers, Finnair said on Thursday. "Demand has fallen in all types of traffic, and particularly in domestic traffic, where flying has declined by nearly one fifth.

"Through capacity cuts we have maintained load factors at a reasonable level," it said. "The problem, however, is an acceleration of the fall in average prices, resulting from a sharp reduction in business travel."

Total passenger traffic -- a measure of the number of passengers and kilometers flown -- fell 0.4 percent in April from a year ago, but capacity was cut 4.0 percent, Finnair said.

That capacity reduction led to a 2.6 percentage points improvement in the load factor to 72.4 percent, Finnair said.

Capacity has been cut by nearly 7 percent in Asian traffic and by around 12 percent in European traffic, Finnair said.

Total passengers fell in April by 7.3 percent from a year earlier to 617,132, it said.