Finnair Group Interim Report 1 January 31 December 2008

Finnair Group Interim Report 1 January 31 December 2008 1 10/02/2009 Presentation name / Author

Air transport in global upheaval Fuel price extremes in four months Fall in demand for air transport has been faster than during the SARS outbreak, but now the phenomenon is global Fewer business passengers, and customers opting for cheaper price classes has led to price erosion Cargo demand collapsed by over 20 per cent late in the year IATA forecasts 5.2 billion dollar losses in 2008 Roughly 30 airlines have folded and more bankruptcies coming Still too much capacity in the market Sector financing in difficulties; problems in accepting aircraft orders 2 10/02/2009 Presentation name / Author

2007 about to remain the only profitable year of the decade 10 8,2 8,5 10 % 5,6 5 3,7 Operating margin, % (LHS) 5 % 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008f 2009f 0 % US$ billion -0,5-2,5 % sales -5-5,6-4,1-5,2-5 % -7,5 Net losses, $bn (RHS) -10-10 % -11,3-13 -15-15 % 3 10/02/2009 Presentation name / Author

Poor result at Finnair Scheduled traffic profitability collapsed Passenger load factor remained good Leisure and Cargo traffic made a good result Operational quality and customer satisfaction improved significantly after problems early in the year 50 million euro efficiency programme being implemented YT negotiations led to ending of 120 and 400 fixedterm employment relationships; over 3,000 temporary lay-offs 10 per cent capacity cut compared to original scheduled traffic plans 4 10/02/2009 Presentation name / Author

Profitability melted down 2008 2007 Change % Turnover mill. 2 262,6 2180,5 3.8 EBITDAR excl. capital gains, fair values changes of derivatives and non recurring items 194,3 287,4-32.4 EBIT excl. capital gains, fair values changes of derivatives and non recurring items 6,6 96,6 - One off items/ capital gains -1,3 30,4 Fair value changes of derivatives -57,4 14,5 Operating profit/loss (EBIT) -52,1 141,5 Profit before tax -56,4 138,9 - - - - 5 10/02/2009 Presentation name / Author

Improved results by efficiency programme Q4/2008 Q4/2007 Change % Turnover mill. 580.3 568.7 2.0 EBITDAR excl. capital gains, fair values changes of derivatives and non recurring items 28.1 70.6-60.2 EBIT excl. capital gains, fair values changes of derivatives and non recurring items -12.5 24.4 - One off items/ capital gains -3.8 6.2 Fair value changes of derivatives -43.8 0.2 Operating profit/loss (EBIT) -60.1 30.8 Profit before taxes -60.8 35.2 - - - - 6 10/02/2009 Presentation name / Author

Fuel boosted unit costs Change YoY 15 % Yield (EUR/RTK) Unit costs (EUR/ATK) 10 5 0-5 -10-15 -20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2003 2004 2005 2006 2007 2008 7 10/02/2009 Presentation name / Author

Unit costs climbing towards the end of the year 2008 Q4/2008 Unit costs of flight operations* c/atk 0.0% +5.2% Unit costs of flight operations* c/atk -4.8% +2.2% excl. fuel Personnel expenses c/atk -8.4% -9.9% Fuel costs** c/atk +14.5% +13.9% Traffic charges c/atk -3.3% +6.9% Ground handling and catering +13.5% +12.1% /passenger Sales and marketing /passenger +18.8% +0.9% Aircraft lease payments and -11.5% -1.1% depreciation c/atk Other costs* c/atk -4.2% +6.9% * excluding fair value changes of derivatives and restructuring items ** includes realized fuel and currency hedging outside hedge accounting ATK = Available Tonne Kilometre 8 10/02/2009 Presentation name / Author

Efficiency programme under way Over half of 50 million euro efficiency programme under way or fulfilled Personnel cut savings approx. 25 million euro Main efficiency improvement areas: Capacity adjustment/ discontinuing unprofitable flights Discontinuing flights to Guangzhou 3 Embraer 170 aircraft away from traffic Effect on staff and variable costs Partners pricing and deepening of cooperation Fuel burn / flight procedures Support functions and business unit interfaces Similar size programme is required once again 9 10/02/2009 Presentation name / Author

Number of staff declining in 2009 Personnel 14000 Personnel on average 12000 10000 8000 6000 4000 2000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 10 10/02/2009 Presentation name / Author

Oiled roller-coaster 11 10/02/2009 Presentation name / Author

Components of jet fuel cost change MEUR 700 600 188-40 -55 500 38 400 300 570 200 439 100 0 Y2007 Volume Price Currency Hedging Y2008 Additionally, realized gains of 10 meur were posted due to jet fuel related hedges in other expenses. 12 10/02/2009 Presentation name / Author

Finnair has consistent hedging policy 100% 80% hedge ratio upper lower 60% 40% 20% 0% 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 13 10/02/2009 Presentation name / Author

Fuel costs a fifth of turnover 2004: 12.6% of turnover 2005: 15.6% of turnover 2006: 19.4% of turnover 2007: 20.3% of turnover 2008: 24.6% of turnover 2009: >22% of turnover Finnair scheduled traffic has hedged 75% of its fuel purchases for the next six months, thereafter for the following 24 months with a decreasing level. 14 10/02/2009 Presentation name / Author

Cash flow declined Cash flow January-December Cash flow statement (EUR mill.) 2008 2007 Cash flow from operations 120 302 Investments and sale of assets -186-273 Investments -233-326 Change of advances and others +47 +53 Cash flow from financing -82 217 Change in liquid funds -148 +246 Liquid funds at the beginning 540 294 Liquid funds at the end with financial interest bearing assets at fair value 392 540 15 10/02/2009 Presentation name / Author

Strengthening balance sheet by cash flow and share issue Equity ratio and adjusted gearing % 120 Equity ratio Adjusted Gearing 100 80 60 40 20 0 2003 2004 2005 2006 2007 2008 16 10/02/2009 Presentation name / Author

Investment program 2006 2007 6 E170 1* E190 1 A340 5* E190 2 A340 2008 2 A340 2* E190 2009 5 A330 2 E190 2010 3 A330 2 E190 Total capex of 400m in 2009 and approx. 300m in 2010 *) Total number of four E190 sale and lease backs after a short period of ownership 17 10/02/2009 Presentation name / Author

Pilot negotiations deadlocked Pilots collective agreement requires new approach; old agreement concluded in different circumstances Normalised retirement age Management s power of decision on use of company s aircraft Pay to correspond with productivity New rest and free days would raise costs Healthy profitability requires a change in structure Overtime ban already disrupting flights Strike threaten for 25 Feb 18 10/02/2009 Presentation name / Author

Finnair s challenging outlook Demand situation remains difficult Price level will stay low Scheduled traffic capacity at least three per cent below last year Big investments, A330 aircraft replacing MD-11 aircraft Funding for this year s investments arranged New efficiency areas continually being sought within the Group Pilots collective agreement solution must not burden cost structure more First quarter clearly loss-making; outlook too hazy to give full-year forecast 19 10/02/2009 Presentation name / Author

Appendices 20 10/02/2009 Presentation name / Author

Fuel and ticket prices on separate paths Development of fuel costs and average ticket prices in scheduled traffic 2002 2008 12,00 11,50 11,00 Average revenue per RPK Fuel per tonne 800 700 eurocent/rpk 10,50 10,00 9,50 9,00 8,50 8,00 7,50 600 500 400 300 /fuel tonne 7,00 2002 2003 2004 2005 2006 2007 2008e 200 21 10/02/2009 Presentation name / Author

Profitability weakened through three quarter MEUR 60 50 40 30 20 10 Change in EBIT per quarter (Excluding capital gains, fair value changes of derivatives and non recurring items) 0-10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4-20 -30-40 -50 2003 2004 2005 2006 2007 2008 22 10/02/2009 Presentation name / Author

Segment results Excluding capital gains, fair value changes of Derivatives and non restructuring items 2008 2007 Q4 Q4 MEUR Scheduled Passenger Traffic -27.6 20.0 Leisure Traffic 12.1 9.7 Aviation Services 5.0 3.0 Travel Services -1.0-0.9 Unallocated items -1.0-7.4 Total -12.5 24.4 23 10/02/2009 Presentation name / Author

Segment results Excluding capital gains, fair value changes of Derivatives and non restructuring items 2008 2007 Q1-Q4 Q1 -Q4 MEUR Scheduled Passenger Traffic -30.1 76.2 Leisure Traffic 26.7 24.2 Aviation Services 13.8 10.3 Travel Services 2.1 2.9 Unallocated items -5.9-17.0 Total 6.6 96.6 24 10/02/2009 Presentation name / Author

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q3 2007 Q4 2007 ROE and ROCE Rolling 12 months % 20 ROE ROCE 15 10 5 0-5 -10 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 25 10/02/2009 Presentation name / Author

Average yield and costs EUR c/rtk & EUR c/atk 100 90 80 70 60 50 40 30 20 10 Yield (EUR/RTK) Unit costs (EUR/ATK) 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2002 2003 2004 2005 2006 2007 26 10/02/2009 Presentation name / Author

Investments and cash flow from operations MEUR 350 Operational net cash flow Investments 300 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008 27 10/02/2009 Presentation name / Author

Aircraft operating lease liabilities MEUR 600 Flexibility, costs, risk management 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 On 31 December all leases were operating leases. If capitalised using the common method of multiplying annual aircraft lease payments by seven, the adjusted gearing on 31 December 2008 would have been 63,2% 28 10/02/2009 Presentation name / Author

Finnair Financial Targets Sustainable value creation Operating profit (EBIT) EBITDAR Economic profit Adjusted Gearing Pay out ratio 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 To create positive value over pretax WACC of 9,5% Gearing adjusted for aircraft lease liabilities not to exceed 140 % Minimum one third of the EPS 29 10/02/2009 Presentation name / Author

Finnair s Financial Targets Description of targets Operating profit (EBIT) Turnover + other operating revenues operating costs EBITDAR Economic profit Adjusted Gearing Pay out ratio Result before depreciation, aircraft lease payments and capital gains Operating profit EBIT Weighted Average Cost of Capital Interest bearing debt + 7*Aircraft lease payments liquid funds) / (Equity + minority interests) Dividend per share / Earnings per share 30 10/02/2009 Presentation name / Author

www.finnair.com Finnair Group Investor Relations email: investor.relations@finnair.com tel: +358-9-818 4951 fax: +358-9-818 4092 31 10/02/2009 Presentation name / Author