Finnair, the national carrier of Finland, on Thursday said that the record high level of fuel prices together with a slower rise in demand would reduce its full-year profits, bringing its shares to a three-year low. The rising fuel costs are causing a lot of troubles to the aviation industry and no wonder that lots of airlines are facing profits downgrading to all time lows.

The airline said that its current year's operational result would fall from the levels it achieved last year. It had earlier said that the first half operational profits would be flat.

In a statement, the airline's Chief Executive, Jukka Hienonen, said, "Factors troubling the entire sector -- rapidly rising oil prices and a sharp fall in passenger load factors -- are also clearly weakening Finnair's profit-making capacity".

In the year 2007, the operating profits of the carrier were 96.6 million euros, excluding capital assets, non-recurring items and fair value changes of derivatives.

The airline said that even with price hedging, it expects its fuel costs will go up to EUR 600 million this year from EUR 440 million a year ago.

Hienonen also said that the carrier is planning to reduce its capacity, particularly on its European services, as its passenger load factor is declining.

Finnair's Scandinavian competitor SAS, which is also under the pressure of rising fuel costs, announced introduction of a surcharge to both domestic and European services to deal with the all time high costs.