Good day, ladies and gentlemen. I'm Erkka Salonen from Finnair IR, and it's my pleasure to welcome you all to this Finnair's third quarter 2022 Earnings Call. I have here with me Finnair CEO, Mr. Topi Manner, and it's my pleasure to introduce you to our new CFO, Mr. Kristian Pullola, who is joining the Q&A session. I will now turn this call over to you, Topi. Please. Thank you, Erkka, and good day for all of you, and thanks for joining this Q3 earnings call. The main entries related to Finnair Q3 are that our net result was still negative. However, the comparable EBIT was positive, landed at EUR 35 million, driven by seasonality and the pent-up demand that we experienced. In September, early September, we introduced new strategy, and the implementation of that strategy has now begun and is proceeding at pace. I will be covering some points of that later in the presentation. As stated, the comparable EBIT was positive for the first time in almost three years. The long and hard pandemic quarters are behind us, 10 quarters of negative operating result, now turning to a positive EBIT. I stated the net result is still negative. Number of passengers during the quarter increased to 2.8 million, and we saw the demand coming back across Europe, beginning with leisure demand, and now lately, especially after the summer vacations, also corporate travel has been really coming roaring back effectively. During the quarter, we operated 66% of our capacity in comparison to pre-pandemic levels, when it comes to our own scheduled traffic. Together with the wet lease operations to Lufthansa Group and British Airways, we operated some 80% of our capacity. The high point of the quarter was that our unit revenues, RASK, and the yields increased quite significantly. When we compare with pre-pandemic levels, the increase was 25%. Even if we introduced new routes and deployed new capacity, those routes, and it typically takes some time to build the unit revenues on new routes. During the quarter, load factors were hovering around 80%, and we also introduced a new deep partnership with Qatar Airways, an extensive codeshare agreement that will see us starting now flights during beginning of November, during next week from Stockholm Arlanda to Doha and Copenhagen to Doha first, and then Helsinki-Doha route will commence later during this year, around mid-December. The high point of the quarter was that our customer satisfaction continued to be at good levels as measured with Net Promoter Score. We are around 40%, even if the operating environment in European aviation especially was quite challenging during the summer months, given the shortages of staffing and other resources. In the midst of this environment, our punctuality was one of the best in Europe. Point-to-point short-haul carriers like Eurowings were better in terms of on-time performance with couple of decimals, and we were neck to neck together with Norwegian. Of network carriers also having long-haul operations, we were the best. This goes to show that our operational quality is strong and also the new Helsinki hub, the new airport in Helsinki is functioning well. We were chosen the best airline in Northern Europe for the twelfth consecutive time in the Skytrax survey. When we look at the P&L, the revenue development was boosted by the pent-up demand and the unit revenues, as we stated. What is behind all of this is that during the last couple of years, we have been making a significant commercial transformation that now starts to be visible when there's more traffic. Prior to the pandemic, the share of direct sales in Finnair amounted to some 1/3, and at present time, we are looking at direct sales through finnair.com and the mobile app amounting to up to 60% of our ticket sales. When we consider the way we run our e-commerce site finnair.com, the way we manage sales, and the conversion rates in the funnel. How we combine that with our revenue management, there is a very good story to tell, and the results are encouraging in a sense that we think that there is plenty of opportunity for added revenue going forward, which is part of our strategy in terms of boosting unit revenues. The wet lease operations are visible in the other operating income during the quarter. Costs, of course, were heavily impacted by the historically high fuel price and further magnified by the strengthening of the dollar. ex-fuel, ex-currencies, the work that we have been doing during the past couple of years to get rid of costs, enable structural cost savings is visible in the cost base. The costs developed as planned and the sizable work that has been conducted now also starts to be visible if you look closely enough. With this, the comparable operating result landed at EUR 35 million and then as stated for the first time in 10 quarters. The net profit was still negative, and that was driven by especially the financial expenses. Approximately half of the financial expenses were related to currencies and other half related to interest rate expenses and leases. The normal seasonality patterns start to be visible in our operations. Also when we look at the sales or the booking curve on daily level and from one week to another. This is of course also applicable for the quarterly level. This picture illustrates the pandemic toll quite a bit and even though the EUR 35 million comparable operating profit is a step in the right direction, it is not enough in order for us to be positive for the whole year in terms of comparable operating profit. If we compare to pre-pandemic levels, Q3 in 2019, we made a comparable EBIT of approximately EUR 100 million. There still is a significant job to be done in order to restore profitability in full. In terms of cash, we started out the quarter with a little less than EUR 1.6 billion of cash at hand. EBITDA, of course, was driving the operating cash flow changes. The working capital was impacted by seasonality and also, the invoicing of the wet lease operations as an example. During the quarter, we drew down EUR 110 million of the capital loan granted by the State of Finland, and that means that now the EUR 400 million capital loan is drawn in full. We ended the quarter with EUR 1.6 billion of cash. The cash is still healthy and strong. With the EUR 110 million drawdown of the capital loan, the equity ratio landed at 8% and gearing was decreased with a notch or two to 320%. It is all about implementing the new strategy, and it is all about restoring the profitability. That is the agenda in Finnair as we speak. We published a new strategy in September, and the key focus areas there being the more geographically balanced network, fleet optimization, us strengthening unit revenues through sales distribution transformation, but also in terms of building on existing and new partnerships. Reduction of unit costs with 15% is a really, really significant part of the strategy and aims to make us competitive on those markets that are open for us, even if Russian airspace would be closed to our Asia flights for a really long period of time. As stated, the target of the new strategy is to reach pre-pandemic levels of profitability with EBIT of 5% by mid-2024. When it comes to implementing this new strategy, it is clear that we need support from all stakeholders. As stated, the strategy implementation now has started. It proceeds at pace, but it will be a long haul. During the quarter, we announced new destinations to Mumbai or new route to Mumbai. As stated, now next week we will be starting our Doha flights from Stockholm Arlanda and Copenhagen. I already covered the significant commercial transformation that we have been doing, and as stated, we believe that there's a story to be told there, and that is encouraging also in terms of what new initiatives we can build on the success that we have been achieving so far. We are at present time negotiating with our unions of further savings and changes in the terms and conditions of employment. Those discussions are progressing. We have now a conditional negotiating result with two of our unions, namely the pilot union and the senior white-collar union in headquarters functions and support functions. The discussions with remaining unions, most notably the cabin crew union and the union handling tech ops and ground handling, are proceeding as we speak. The condition in the negotiating result is related to us reaching a similar negotiating result with symmetric levels of savings with all of the unions, or alternatively, us taking home similar cost savings in the respective domains of the unions by means of employer-decided initiatives. We are also streamlining the structures, our organization structures, globally and currently we are in the middle of a process to reduce up to 200 employees in headquarters and support functions across the organization, globally. Having said this, we are looking at every single cost item. We did that during the pandemic, but we did that with the ambition to come back to our Asia strategy. Now we are applying a new lens to the cost savings according to the new strategy and therefore feel confident that there is new opportunity in terms of reducing costs in the months to come. In terms of the outlook, during Q4, we estimate that we will be operating an average of 70% of our capacity in terms of our own scheduled service, and then the wet leases will decrease a bit. They will amount to some 10% of our pre-pandemic capacity. Altogether, the same 80% of capacity will be deployed as in Q3. When we look at our booking curve, we see that the strong demand for travel will continue during the remainder of the year. We estimate that that in turn will support Finnair's unit revenues, as we have experienced during Q3. The significant uncertainties in our operating environment will prevail. Historically high fuel cost, prolonged Russian airspace closure, strengthening of the dollar, remaining impacts of the pandemic, especially by means of strict travel restrictions still in China, and then possible looming recession with inflationary pressures also potentially over medium term impacting customers' willingness to travel. The bottom line is that in order to get ready for these uncertainties, partially realizing, and in order to make sure that we will restore profitability, we will need to be implementing our strategy and all the measures that go with it at pace, and that we will be doing during the remainder of the year. We will be giving a further update of the progress in connection to the next quarterly report, in the beginning of the year. I will stop at that. Thank you. Thank you for listening. Many thanks, Topi. Now would be a convenient time for any questions you may have. Please follow the operator's instructions to present them. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Joonas Ilvonen from Evli. Please go ahead. Hi, it's Jonas from Evli. First, congratulations with respect to the positive EBIT. I have a question related to the underlying ticket price inflation. Your RASK improved by some 20% in Q3 on quarter-on-quarter. That was partly driven by the increased load factors, which I mean. You are not going to see similar kinds of increases going forward. When I calculate, I guess it would be more appropriate to calculate the kind of ticket price inflation based on RPK, and I get a figure something like 10% when I use that. I was just hoping more color on this issue. I mean, you say you continue to see similar kind of strong unit revenue development going forward. Could you give some sort of color what kind of levels, pricing levels are you seeing going forward? Well, currently, if we look at the RPK yields, we see the RPK yields holding up now on the short run. It is important to note that we also see the normal seasonality patterns coming back to the business. In the context of Q4, that would be meaning that, you know, October is still a relatively good traveling month. November is a seasonally soft traveling month before the travel will pick up, especially during the latter part of December and the Christmas holiday. I hope that that goes at least some way to answering your question. Okay. What about, I mean, this jet fuel price situation? Do you see that you have still some sort of catching up to do with that, even if there has been some stabilization in price levels? Yeah, I mean, if we look at the pass-through rate from the fuel price, I mean, we have been able to pass through a significant portion of the increased jet fuel price, but not all of it. There's still a job to be done on this one. Whether that will be possible, that will be driven by the demand that we will be seeing on the market. Kristian will continue. Maybe just kind of taking one step back. You know, in the end, the pricing environment is driven by, you know, capacity in the overall industry, and demand from consumers. Now we have seen that, you know, industry capacity is constrained, because of the reasons that Topi talked about. Demand has still been good. We are, of course, now, you know, looking at demand on a daily basis, trying to understand how consumers will react to the higher bills that they will receive from electricity companies and from financial institutions and so on. That ultimately will drive the pricing environment, you know, going into next year and, you know, for the remainder of Q4. Okay, that's clear. Could you also remind us of these, you know, revenue management projects from your new strategic point of view? I mean, so my feeling is that these are still, I mean, somewhat in development and they are still to bear like major fruit and how you're going to differentiate yourselves from competitors with this respect? Yeah, as stated, I mean, I would divide this to two parts. The other one is the change in distribution that we have been doing, increasing significantly share of direct distribution up to 60%. That is also driven by partially by geographical mix that has changed, especially some of the Asian markets before the pandemic being very GDS driven in terms of distribution. That's the other part of it. Then the revenue management is the other side of it. I think that when we look at this equation during Q3, we were relatively successful in terms of capacity management and the revenue management initiatives that we have been taking. That is important that we prevail that capacity discipline also going forward. We have been also introducing new tools like dynamic revenue management that are relatively fresh, but the early indications are that there are some encouraging results out of that. When it comes to distribution and sales, the way we manage the sales funnel, how we are obsessed about conversion rates in the sales funnel, and how good we are in terms of cross and upselling different fare types and ancillaries. I think that there we have taken significant steps forward, and I would estimate that there's still some opportunity left to capture on that space. All right. Thanks. That's all from my side. The next question comes from Pia Rosqvist-Heinsalmi from Carnegie.. Please Please go ahead. Yeah. Hi, it's Pia from Carnegie. Thanks for taking my questions. I got a few ones, and one is regarding the wet leases for Q4 and looking into 2023. Based on your current contracts, for how long do you still have or for how long are the current contracts still in force? During the winter, we are deploying two wide-bodies, namely two Airbus A350s to Lufthansa Group to Eurowings Discover. That goes until the end of IATA winter season, end of March. All right. Thanks. Regarding the cost savings and then the negotiations ongoing with the unions, by when do you expect the new contracts to enter into force? I mean, when should we expect to see the impacts from these new agreements? We hope to proceed with the talks ASAP, so during the upcoming weeks. Then we hope to lock in the negotiation results during the course of Q4, which would be meaning that we would be seeing the run rate impact from these in 2023. In 2023. All right. Thanks. Good. Then I had there was the question on yields that was maybe already answered. Then coming back to your strategy and the point you did not touch upon in your presentation, namely, ensuring a sustainable balance sheet. Is there any news you can share at this point with regards to the actions to ensure a sustainable balance sheet? I think actually Topi talked about it. You know, the balance sheet will be worked through the improved profitability. Our focus now is on improving the profitability in a sustainable manner by turning every stone and driving that implementation with force. With that, we can then also, you know, generate cashflow and retained earnings, which will help us to improve the financial position of the company. All right. Thank you. That's all from me. The next question comes from Jaakko Tyrväinen from SEB. Please go ahead. Yes, good afternoon. It's Jaakko from SEB. Coming back to the yields and you said, Topi, that the corporate travel is returning. How should we expect it to impact the yields? A follow-up on the corporate travel, how the demand there is splitting between the geographies? Yeah. Yeah, as stated, I mean, after the summer vacations, we have seen corporate travel coming back. You know, the return rate of corporate travel in comparison to pre-pandemic levels adjusting to the capacity that we are now flying is, you know, approximately 80% by and large. That is something that we are seeing, so clearly supportive in terms of yield development. The geographical spread is. But there's a lot of short-haul in Europe in corporate travel. There has been quite a bit of corporate travel to North America. Now lately, Asian corporate travel has been picking up on the back of countries like Japan, South Korea opening travel from all COVID-related restrictions. There are individual markets like Singapore that are very strong. Flows to Singapore also supported by the Australian flows beyond Singapore. Now lately, when we have been seeing Hong Kong easing the travel restrictions somewhat, we have seen a pick up on the Hong Kong market. Excellent. Thanks. Continuing on the Asian traffic and what is the situation with the Chinese COVID restrictions? What are your expectations when you could kind of open routes to more routes to China? I mean, we all saw the party congress in China last week, and there the sort of high-level communication is that Xi Jinping and the party is committed to the dynamic zero-COVID policy. We think that the dynamic part means that there might be, you know, individual flight permits that we as well as other airlines will be getting during the winter months, but that will be very small of nature. We don't expect a more significant opening in China during the winter months. The question remains that what kind of opening we might be seeing for the summer period. Okay. This takes me to my next question. It would be very helpful if you could shed some light on the 23 capacity plans. How much less you are about to fly compared to the pre-pandemic levels? Understand that you don't want to give any guidance, but any light there would be nice. Well, this is something that we are looking at. We have been publishing a summer schedule for next summer, which I would characterize as a base schedule. During the upcoming months here during the winter, we will be looking at the demand picture over the medium- term until the end of 2023. We will be making decisions related to how much we will be deploying capacity in connection to that. Of course, the fleet optimization is a key part of our strategy. Any capacity deployments will be considered hand in hand with fleet optimization. Okay, thanks. A bit of a technical one on the costs. Firstly, traffic charges were kind of surprisingly low compared to the rise in volumes. Was there any kind of unusual items impacting that? A relatively big one, which is that we are not flying over Russia. If I just look at the kind of a quarter-over-quarter development, it was a bit muted, kind of a rise in that cost line, but that surprised me. Yeah. I mean, of course, there are sort of individual developments. I mean, if we compare to previous, I mean, given the capacity constraints in some of the European airports like Heathrow or Schiphol, we could not fly as much to those airports as we would have wanted to. These are expensive airports. These kind of individual developments are impacting the number. Okay. That explains then. On maintenance costs, which were significantly up, was this just because of the U.S. dollar or were there some extra items there? No, the currency impacts materialize at the maintenance event. Therefore, the maintenance costs were largely driven by the Forex impacts. All right. Thanks. That's all from my side. Please state your name and company. Please go ahead. Hi, this is Giovanni from Laxo Capital. Good afternoon, everybody. Good to see the numbers inflecting positively. Two questions for us coming from our perspective as bondholder of the company. Have you stated any intention regarding if you want to call the perpetual bond in June next year? Does that in effect put a deadline to the timing of any capital measure that you're contemplating? The second question is, so I noted that you stopped recognizing any deferred tax assets from your past tax losses, and that you wrote down the deferred tax assets from the previous years. Is the implication that you've updated your business plan and that your tax losses were exceeding the expected profits for, I believe, the next 10 years? I think that 10 years is what the Finnish tax law allows you to carry forward the tax losses to cut down taxes in the future. Thanks. Yeah. Maybe on the last one. Yes, the reason for that change previously in the year is that there is uncertainty around if we can utilize the losses in the time period permitted. In that sense, that's why we are not accruing for additional benefits from the losses that we've now had also on a net basis in the third quarter. I think to your first question, we have not made such decisions when it comes to, you know, the step-up in the rates and what actions that will drive. Our focus is now on ensuring that the profitability improvement measures get identified and the implementation starts. as I said earlier, you know, through that, we will also create the capacity to improve the financial position of the company. To add on that. I guess if I can ask a follow-up on this, on the losses. Are you basically assuming that you will not be able to generate a profit for the next few years, or are you just trying to be prudent? I think we are being prudent here. When we look at the totality, you know, are we able to utilize all of them or not? That's what's also driving partly the decision. To add on what Kristian Pullola stated about, you know, our balance sheet structure and debt, different debt types, I think that what we need to remember is that European Commission has permitted the government to extend the guarantee for the pension premium loan, for the existing pension premium loan, that decision has been publicly communicated. That extension of the guarantee is in our disposal going forward if we so choose. Is the intention to refinance, I guess, to also extend the pension loan? Because you know you have the guarantees extended, but will the loan also be the maturity of the loan also be extended? That would be the usage of that extended guarantee if we so decide to do. We are talking about the maturities, you know, in the fourth quarter and in 2023. Would the terms of the loan also change, or would they be so like, you know, similar to when you signed the loan a couple of years ago? Because of course, rates have gone up quite a bit in the last two months. Yes. As you said, I think, when you make extensions in the current environment, it's difficult to find lenders who are willing to extend on old terms. In that sense, it would be based on the current terms for those type of pension loan facilities. The next question comes from Pia Rosqvist-Heinsalmi from Carnegie. Please go ahead. Hi, it's Pia from Carnegie. Again, thanks for taking my question. Please, a follow-up with regards to the pension premium loans. If those loans or the period would be extended, would this also mean that the rules and regulations then stipulated under the state aid packages they would also be extended over this new period? No, not necessarily. I mean, the earlier remedies from EU were more related to the rights issue and the combination of the guarantee and the rights issue. That needs to be kept in mind. Okay. Thank you. That's clear. Thanks. Please state your name and company. Please go ahead. Hi, this is Giovanni again from Laxo Capital. I guess my follow-up question on the pension loan is, would you consider using those proceeds to call the perpetual bonds next year? Because it will make quite a difference on your interest payments. I will only repeat what I said earlier. We have made no such decisions and have no such plans. We will now focus on improving the profitability of the company through the implementation of the new strategy, and that creates then cash flows and profitability, which will enable us to strengthen also the financial position of the company. Thank you. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. Okay. It seems that there are no further questions, so we will then conclude the session. Seems that there would be one question more, so please go ahead. Please state your name and company. Please go ahead. Hi. This is again, Giovanni again. Back to the previous question on the use of the potential proceeds of potential loan or the capital loan or whatever cash that you have in your balance sheet to repay the hybrid. Would the Finnish government object to that, or the European Commission object to that, to the use of your current, you know, cash in balance sheet to repay, I guess, the hybrid, the perpetual? No, I mean, the usage of the money is not earmarked to anything. You have full freedom, legal freedom to use that proceeds to even repay other liabilities? Yeah. I mean, it's part of our financing structure and part of the balance sheet structure. There are no sort of specific terms- in- terms of earmarked usage. Okay. Thank you. Thank you very much. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Okay. No questions left, we will conclude the session. Many thanks for the excellent questions and joining the call. We wish you a nice weekend. Thank you very much for joining. Thank you. Thank you.