Finnair’s earnings fell in its seasonally strong third quarter due to a combination of cost blowouts and deteriorating economic conditions in key markets. A gloomy outlook for the remainder of the year accompanied the weaker result, which is expected to leave the airline in the red for the full-year. Sharp cost increases in 2011 have brought into focus Finnair’s urgent need for structural change, with the airline confirming it is ramping up efforts to address its weaknesses.

Cost reductions at Finnair are central in allowing the carrier to compete more aggressively in its key markets, where competition in the Nordic, Baltic and Asian regions is quickly heating up.