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FORMED IN 1923 AND STARTED OPERATIONS IN 1924. FOUNDED AS "AERO." DOMESTIC, REGIONAL AND INTERNATIONAL, SCHEDULED AND CHARTER, PASSENGER AND CARGO, JET AIRPLANE SERVICES.
HELSINKI VANTAA AIRPORT
01053 VANTAA, FINLAND
PO BOX 15
FIN-01053 FINNAIR VANTAA
FINLAND (REPUBLIC OF FINLAND) WAS ESTABLISHED IN 1919, IT COVERS AN AREA OF 338,145 SQ KM, ITS POPULATION IS 5.1 MILLION, ITS CAPITAL CITY IS HELSINKI, AND ITS OFFICIAL LANGUAGE IS FINNISH.
Founded as "Aero" (FIN) began operations across the Gulf of Finland to Talinn with Junkers float planes. The last seaplane service was operated in December 1936 following the construction of the 1st airports in Finland. In 1946, the Finnish government acquired a majority holding in the company, re-establishing European services on November 1st, 1947. The 1st transatlantic service to New York was inaugurated on May 15, 1969. The marketing name of Finnair (FIN) was adopted as early as 1953, but was not made official until June 25, 1968. (FIN) acquired a 27% controlling interest in Kar-Air in 1962 and in 1979, established its own domestic subsidiary Finnaviation, holding a 60% stake. Both later became wholly owned and were integrated into the mainline operation in 1997.
SEPTEMBER 1995: FINNAIR (FIN)'S ANTTI POTILA, PRESIDENT.
NOVEMBER 1995: 1 MD-82 (JT8D-219), EX-SPANAIR (SPP), & 1 MD-83 (JT8D-219), EX-TRANSWEDE (TNS).
DECEMBER 1995: NEW ROUTE: HURGHADA, MOMBASA.
OPERATES 40 AIRPLANES. OF 17 DC-9-41/-51'S, SOLD 5, TO BE REPLACED BY MD-80'S.
APRIL 1996: TO CANARY ISLANDS, MIDDLE EAST, INDIA, & TRANS ATLANTIC (757).
FISCAL YEAR (FY) 1995 = +12.6% (RPK) (TRAFFIC), +$113 MILLION (NET PROFIT).
$220 MILLION, 4 ORDERS (JUNE 1997) 757-200'S, TO REPLACE A300B4-200'S (299 & 302), 220 PAX. 1 MD-83 (JT8D-219), EX-(TNS) DELIVERY.
MAY 1996: CODE SHARE WITH LITHUANIAN (LIJ) TO VILNIUS, LITHUANIA, & BEYOND.
7,500 EMPLOYEES (INCLUDING 1,780 FLIGHT CREW (FC) AND 435 LICENSED MAINTENANCE TECHNICIANS (MT)).
JUNE 1996: SOLD 2 DC-9-41'S (47604; 47605) TO (CMI).
JULY 1996: 1 747-100F, POLAR (PAO) WET-LEASED 1 YEAR, TO OPERATE (JFK), HELSINKI, SINGAPORE.
AUGUST 1996: 1 MD-83 (JT8D-219), EX-(TNS).
SEPTEMBER 1996: CODE SHARE WITH ESTONIA (ENA) TO TALLINN.
OCTOBER 1996: TO (SFO) (MD-11). CODE SHARE WITH DELTA (DAL) TO NEW YORK/BOSTON.
DECEMBER 1996: CODE SHARE WITH AER LINGUS (ARL) TO DUBLIN, STOCKHOLM (DC-9, 122 PAX, 2 CLASS).
1996 = 5.32 BILLION (RPK) TRAFFIC (#50 HIGHEST WORLD AIRLINE).
APRIL 1997: CODE SHARE WITH SWISSAIR (SWS) TO ZURICH. IN SUMMER, LAPPEENRANTA TO ST PETERSBURG VIA HELSINKI.
8,217 EMPLOYEES (INCLUDING 2,067 MAINTENANCE TECHNICIANS (MT).
SELLS 3 DC-10-30'S TO CARPA LEASING, LEASED TO (LBE).
MAY 1997: MAINTENANCE COOPERATION WITH LUFTHANSA (DLH), WHERE (FIN) DOES HEAVY MAINTENANCE ON 5 (DLH) MD-11F'S, & LUFTHANSA TECHNIK (LTK) DOES 4 (FIN) 757'S.
1 DC-10-30 (CF6-50C2), EX-(ALB).
JUNE 1997: FISCAL YEAR (FY) 1996 = +$62 MILLION (-20%): +29% FUEL COSTS, +5.3% (RPK) TRAFFIC, -2% (FTK) FREIGHT TRAFFIC.
SOLD 1 DC-9-41 & 1 DC-10. SELECTED A320 FOR FUTURE FLEET PLANS (1998).
JULY 1997: 12/24 ORDERS A319/A320/A321'S TO REPLACE DC-9'S, 121 PAX. 1ST 2 DELIVERIES A321'S, 188 PAX.
SEPTEMBER 1997: CODE SHARE WITH AIR FRANCE (AFA) TO PARIS. CODE SHARE WITH BRAATHENS (BRT), STOCKHOLM TO OSLO.
1ST 757-200, 218 PAX, DELIVERY ("OFFICIAL AIRLINE OF SANTA CLAUS"). $150 MILLION ORDER FOR (CFM56-5B RATED 23.5K LBS) FOR A319; 27,000 FOR A320; & 33,000 FOR A321'S.
OCTOBER 1997: 10,593 EMPLOYEES.
TO MADRID AND BARCELONA. LAPPENRANCE, EAST FINLAND TO ST PETERSBURG, RUSSIA AND JOENSUU, FINLAND TO PETROZAVODSK, NORTHWESTERN RUSSIA. CODE SHARE WITH (AFA), (SWS) AND (ENA). MARKETING ALLIANCE WITH BRITISH AIRWAYS (BAB). THE USA DEPARTMENT OF TRANSPORT (DOT) OK'S CODE SHARE WITH DELTA AIRLINES (DAL), NEW YORK (JFK) TO HELSINKI, INCLUDING WASHINGTON DC, ATLANTA, MIAMI (MIA), AND ON TO ZURICH & FRANKFURT.
2 757'S, (ILF) LEASED DELIVERIES. 5 ORDERS A319'S, 126 PAX; 3 A320'S, 150 PAX; 4 A321-200'S, 188 PAX (CFM56-5); 12 OPTIONS A319/A320/A321 (EARLY 1999) TO REPLACE 12 DC-9-51'S.
NOVEMBER 1997: MD-83 (49708) RETURNED FROM SPANAIR (SPP).
DECEMBER 1997: ANTTI POTILA CHAIRMAN TO RETIRE END OF 1998 (60 YEARS OLD).
JANUARY 1998: 1997 = +10.1% (RPK) TRAFFIC, +22.6% (FTK) FREIGHT TRAFFIC.
DC-10-30 TO AIR LIB (ALB).
FEBRUARY 1998: KEIJO SUILA CHAIRMAN, 52 TO TAKE OVER IN JANUARY 1999.
MARCH 1998: CODE SHARE WITH BRITISH AIRWAYS (BAB), STOCKHOLM TO MANCHESTER/LONDON. COMMERCIAL AGREEMENT WITH (LOT) POLISH.
(FMS)/(GPS) INSTALLATION 505 COMPLETE ON MD-80 FLEET. ROCKWELL COLLINS SAT-2000 (SATCOM) SYSTEM FOR 12 A319/A320/A321'S.
757-200 DELIVERY (3RD).
APRIL 1998: 10,780 EMPLOYEES.
JAR-OPS 1 & 145 APPROVE 1 MD-82 (49906) & 2 MD-83'S (49741; 49904) PURCHASED OFF LEASE. 2 MD-82 (49905; 53245) SOLD TO INDIGO & LEASED BACK FOR 7 YEARS.
MAY 1998: PERTTI VARE VP QUALITY ASSURANCE REPORTS TO PRESIDENT.
FISCAL YEAR (FY) 1997 = 10.2 BILLION (RPK) (+15.1%), 71.2% LF LOAD FACTOR; +$92.8 MILLION (+$58.8 MILLION): 7.07 MILLION PASSENGERS (PAX) (+12.5%).
TO BE PRIVATIZED IN 1999.
4TH 757 DELIVERY. 2 A300'S TO AIR SCANDIC (SCZ), NEW START-UP, TOUR OPERATOR, MAINTAINED BY (FIN). AIR FOYLE (FOY) WILL PROVIDE FLIGHT CREWS.
JUNE 1998: AFTER VISITING SEATTLE, HAS INSTALLED AN ESPRESSO MACHINE IN AN MD-11 TO STUDY CUSTOMER RESPONSE.
(IATA) (ITA) REPORTS FOR 1997 TOTAL PASSENGER (PAX) VOLUME, (FIN) MOVED FROM 51ST TO 44TH IN THE WORLD.
CODE SHARE WITH IBERIA (IBE) TO MADRID/BARCELONA.
LAST A300 DELIVERED TO AIR SCANDIC. 757'S TAKE OVER ALL CHARTER ROUTES PREVIOUSLY OPERATED BY A300'S. SPENDS $30 MILLION TO HUSHKIT 12 DC-9-51'S +NEW AVIONICS, RENOVATED PASSENGER CABINS, & SMOKE DETECTORS & FIRE EXTINGUISHING SYSTEM IN CARGO COMPARTMENT. TO SELL 2 DC-9'S THIS YEAR.
JULY 1998: SOLD 2 OF 12 DC-9-50'S TO KELLSTROM INDUSTRIES FOR LEASE TO AEROPOSTAL (LAV). TO HUSHKIT REMAINING 10.
AUGUST 1998: CODE SHARE WITH SABENA (SAB) TO BRUSSELS VIA STOCKHOLM.
SEPTEMBER 1998: KEIJO SUILA, CHAIRMAN/PRESIDENT ELECT (JANUARY 1999) INFORMALLY VISITS TECHNICAL AREAS TO MEET ALL HANDS. MAKES GREAT IMPRESSION WITH THE "TROOPS."
TO JOIN NEW GLOBAL ALLIANCE "ONEWORLD:" AMERICAN (AAL), BRITISH (BAB), QANTAS (QAN), CANADIAN (CDI), CATHAY (CAT), DRAGONAIR (DRG), IBERIA (IBE) AND JAPAN AIRLINES (JAL). (http://oneworldalliance.com).
MARKETING ALLIANCE, INCLUDING CODE SHARE WITH (AAL) STARTING APRIL 1999.
OCTOBER 1998: TAPIO KORPIKOSKI QUALITY MANAGER.
TO FORT LAUDERDALE VIA BANGOR (757).
NOVEMBER 1998: 3 ATR72'S, EX-TRANSASIA (FSH) TO REPLACE 2 SAAB SF340'S SOLD TO FLYING ENTERPRISE, SWEDEN
DECEMBER 1998: BECOMES 2ND EUROPEAN AIRLINE IN ONEWORLD ALLIANCE (ONW).
OPERATES 58 AIRPLANES TO 21 DOMESTIC AND 39 EUROPEAN DESTINATIONS, 27 COUNTRIES (7.2 MILLION PASSENGERS/YEAR).
FEBRUARY 1999: STRIKE BY AIR TRAFFIC CONTROLLERS RESULTS IN -$3.6 MILLION/WEEK FOR (FIN) WITH 90% OF DOMESTIC FLIGHTS CANCELED.
COMPLETES "C" CHECKS ON 1ST 2 757'S.
CODE SHARE WITH AMERICAN (AAL), (JFK) TO RIGA (LATVIA) AND TALLINN (ESTONIA), VIA HELSINKI TO ST PETERSBURG AND MOSCOW.
1ST A321-211 (941, OH-LZA) DELIVERY.
MARCH 1999: (ATC) STRIKE CONTINUES INTO 2ND MONTH. (FIN) IS LOSING -$10 MILLION/WEEK.
1 A321-200 (CFM56-5B3/P) DELIVERY.
APRIL 1999: 11,361 EMPLOYEES. (http://www.finnair.fi).
TO JOIN ONEWORLD ALLIANCE (ONW) LATER IN 1999.
5TH 757-200 DELIVERY.
MAY 1999: 2 BACK-TO-BACK, MD-11, "C" MAINTENANCE CHECKS IN WORK.
JUNE 1999: FISCAL YEAR (FY) 1998 = +$65 MILLION (-33%) BECAUSE OF 5-WEEK (ATC) STRIKE IN FEBRUARY 1999 & HIGHER OPERATING COSTS. DOMESTIC PASSENGERS (PAX) = 7.4 MILLION (+5%) ((+13%)), 72.3% LF (+1.1).
1998 TOP WORLD AIRLINES TRAFFIC (RPM) (BILLION):
41 AIN 7.68; 42 ELA 7.55; 43 GIA 7.09; 44 PIA 6.82; 45 AMX 6.66; 46 FIN 6.66; 47 GUL 6.59; 48 ARG 6.58; 49 PAL 6.50; 50 CMA 6.41.
ATR72-202 (389) NOT TAKEN UP.
JULY 1999: 2 DC-9-51 (47694; 47695), SOLD IN PANAMA.
AUGUST 1999: (FIN) GROUP FISCAL YEAR (FY) 1998 = +$69 MILLION (+$91 MILLION): 10.71 BILLION (RPK) TRAFFIC (+11.3%), 6.77 MILLION PASSENGERS (PAX) (+11.1%), 69% LF LOAD FACTOR (+1.4). 1998 = 6.66 BILLION (RPM) TRAFFIC (+11.3%), 809.9 MILLION (FTM) FREIGHT TRAFFIC (+1.1%).
SEPTEMBER 1999: MIKKO KUNTOLA VP CARGO.
A319 DELIVERY. A320-214 (1073, OH-LVA) DELIVERY. IN OCTOBER 1999, TO CEASE OPERATIONS OF SAAB 340'S & USE 9 ATR'S.
OCTOBER 1999: TECHNICAL DIVISION: CONTACT: COLIN MOLLOY, SENIOR MANAGER AIRCRAFT PROGRAMS (email@example.com): HAS HANGARS FOR 2 WIDE BODY & 3 NARROW BODY AIRPLANES, FOR 757'S & A320'S FAMILY, "A" - "C" CHECKS, DC-9'S, MD-80'S, DC-10-30'S, MD-11'S, ATR42/72'S, & SF340'S "A" - "D" CHECKS, INCLUDING AVIONICS UPGRADES, CORROSION PREVENTION CONTROL PROGRAM (CPCP), & SHEET METAL WORK.
MD-11 "C" CHECK FOR LUFTHANSA CARGO (LUB).
A319-112 (1107, OH-LVB) DELIVERY.
JANUARY 2000: IN JUNE 2000, TO TORONTO (757, 3X-WEEKLY).
FEBRUARY 2000: 8,573 EMPLOYEES.
WAS "MOST PUNCTUAL" AIRLINE IN EUROPE IN 1999.
MARCH 2000: 1999 = 21.14 BILLION (RPK) TRAFFIC (-2.8%); 80.13 MILLION (FTK) (+13.4%); 8.07 MILLION PASSENGERS (PAX) (-2.3%).
A321-211 (1185, OH-LZC) DELIVERY.
APRIL 2000: IN JUNE 2000, STOCKHOLM TO MADRID (MD-82, DAILY). NOW OPERATES TO 61 DESTINATIONS IN 31 COUNTRIES.
JOUKO MALEN EXECUTIVE VP TECHNICAL DIVISION IS SERIOUSLY ILL AND WILL BE AWAY FOR EXTENDED ABSENCE, REPLACED TEMPORARILY BY JARMO VILENIUS.
11,900 EMPLOYEES. (firstname.lastname@example.org).
FISCAL YEAR (FY) 1999 = 13.02 BILLION (RPK) TRAFFIC, 18.92 BILLION (ASK), 68.8% LF LOAD FACTOR (-3%), 7.68 MILLION PASSENGERS (PAX), +6.2% (FTK) FREIGHT TRAFFIC.
WILL REPLACE ALL MD-80'S WITH A319/A320/A321'S OVER NEXT 5 YEARS. 3 MD-80'S SOLD. COMPLETES HUSHKITTING OF ALL DC-9-51'S FOR DOMESTIC AND REGIONAL NORDIC/BALTIC ROUTES.
MAY 2000: EXPECTS JOUKO MALEN EXECUTIVE VP TECHNICAL DIVISION TO RETURN TO WORK IN JUNE 2000 AFTER EXTENDED ILLNESS ABSENCE.
IN SUMMER TO TORONTO AND HANNOVER.
3 MD-87'S (49403; 49404; 49405), SOLD TO CRAYCROFT, LEASED TO SPANAIR (SPP).
JUNE 2000: ONEWORLD (ONW) IS NOW: (AAL), (BAB), (CAT), (FIN), (IBE), (QAN), (ARL), AND (LAN) = 559 DESTINATIONS, 1,852 AIRPLANES.
JOUKO MALEN EXECUTIVE VP TECHNICAL DIVISION RETURNED TO WORK AFTER EXTENDED ILLNESS. HE IS EXPECTED TO RETIRE THIS YEAR.
TO CHANGE ITS LIVERY BY FINNAIR (FIN) LOGO ON TAIL IN PLACE OF FINNISH FLAG, BLUE ENGINE NACELLES, & A MORE MODERN SCRIPT FOR THE FINNAIR NAME.
LUFTHANSA CARGO (LUB) SELECTS (FIN) TO PROVIDE ENGINEERING & MAINTENANCE ON +6 MD-11'S FOR A TOTAL 11 AIRPLANES.
SEASONAL ROUTE TO STOCKHOLM TO BERGEN (3/WEEK).
1 A321-200 (1241, OH-LZD) DELIVERY.
JULY 2000: TO INSTALL POSSIO GSMFAX MACHINES IN FLIGHT DECK OF ALL 757 & MD-80'S.
OPERATES TO WEST PALM BEACH USA VIA BANGOR, TIL MARCH 2001.
1999 = 21.14 BILLION (RPK) TRAFFIC; 80.13 MILLION (FTK) FREIGHT TRAFFIC; 8.07 MILLION PASSENGERS (PAX); 11,900 EMPLOYEES (+4.7%).
FARNBOROUGH AIRSHOW ANNOUNCEMENT OF +2 ORDERS (2/02) A319 & 4 ORDERS (FEBRUARY 2002) A320 (CFM56-5).
AUGUST 2000: TO USE POLAR AIR CARGO (POA) WET-LEASED 747-200F FOR FREIGHTER SERVICE, GOTHENBURG TO PRESTWICK. A319-112 (1309, OH-LVC) DELIVERY.
SEPTEMBER 2000: JARMO VILENIUS SENIOR VP TECHNICAL DIVISION.
IN APRIL 2001 TO LUTON FOR SCANDINAVIAN LEISURE GROUP-AIRTOURS.
VERY ACTIVE WITH MD-11F "C" CHECKS FOR LUFTHANSA CARGO (LUB).
OCTOBER 2000: SOLD MD-82 (49906) & MD-83 (49401), TO AC CAPITAL, & MD-83 (49625) TO PACIFIC COAST GROUP, AND LEASED BACK. A319-112 (1352, OH-LVD) DELIVERY.
NOVEMBER 2000: CODE SHARE WITH ITS ONEWORLD (ONW) PARTNER, BRITISH AIRWAYS (BAB), LONDON HEATHROW (LHR) TO TORONTO.
1 MD-87 RETURNED TO FIRST SECURITY (FSB), LEASED TO AEROMEXICO (AMX) (49404, N204AM).
DECEMBER 2000: MD-87 (49405) RETURNED TO LESSOR.
JANUARY 2001: APPLIES FOR AIR TRAFFIC OPERATIONS LICENSE FOR SUBSIDIARY AIRLINE "AERO AIRLINES AS," FOR OPERATIONS IN ESTONIA.
RESTRUCTURES INTO 6 BUSINESS GROUPS: AVIATION SERVICES (GROUND OPERATIONS & TECHNICAL SERVICES); SCHEDULED PASSENGER TRAFFIC; LEISURE; CARGO; TRAVEL SERVICES AND SUPPORT SERVICES.
JARMO VILENIUS SENIOR VP TECHNICAL; KARI PALOMAKI SENIOR VP GROUND OPERATIONS; & MIKKO KUNTOLA VP CARGO.
TO WET-LEASE 1 757-200 TO AIR SCANDIC (SCZ) FOR THE SUMMER SEASON.
FEBRUARY 2001: SUBSIDIARY, AERO AIRLINES, ESTONIA WILL OPERATE (FIN) ATR72'S.
IN JUNE 2001 TO RESUME SERVICE TO TORONTO (757, 3X-WEEKLY).
PREVIOUSLY NAMED TECHNICAL DIVISION, WILL NOW BE CALLED TECHNICAL SERVICES, AS PART OF THE AVIATION SERVICES BUSINESS AREA.
1 A320-214 (1405, OH-LXA) DELIVERY.
MARCH 2001: 2000 = 12.59 BILLION (RPK) TRAFFIC, 82.85 MILLION (FTK) FREIGHT TRAFFIC (+3.4%), 7.44 MILLION PASSENGERS (PAX) (-7.8%).
IN FEBRUARY 2002, TO BANGKOK TO HONG KONG (MD-11, 4X-WEEKLY).
2 ORDERS (MARCH 2002) 757-200'S (PW2040) (29382; 30046), (ILF) LEASED.
APRIL 2001: 9,214 EMPLOYEES.
CODE SHARE WITH CROSSAIR (CSR) TO GENEVA.
MAY 2001: 1 A320-214 (1470, OH-LXB) DELIVERY.
JUNE 2001: CONTRACT WITH TENZING COMMUNICATIONS, SEATTLE TO OFFER E-MAIL, AND WEB SERVICES, ON (FIN)'S ENTIRE FLEET STARTING OCTOBER 2001. WILL BEGIN WITH INTEGRATION OF SYSTEM INTO (FIN)'S MATSUSHITA IN-FLIGHT ENTERTAINMENT IN BUSINESS CLASS ON 4 MD-11'S. IN 2002, WILL EXPAND SERVICE VIA A WIRELESS NETWORK THROUGHOUT ENTIRE CABIN.
JULY 2001: 11,900 EMPLOYEES.
2 ORDERS (OCTOBER 2001) 757-300'S (RB211-535E4B), CONDOR (CDF) WET-LEASED TIL END OF 2ND QUARTER 2002.
AUGUST 2001: IN SEPTEMBER 2001 CODE SHARE WITH UKRAINE INTERNATIONAL (UKR) TO KIEV.
SEPTEMBER 2001: A320-214 (1544, OH-LXC) DELIVERY.
OCTOBER 2001: 1 A320-214 (1588, OH-LXD) DELIVERY. MD-83 (49741) RETURNED TO PEGASUS (PSS).
NOVEMBER 2001: 1 DC-9-51 (47738) TO AEROPOSTAL (LAV).
JANUARY 2002: 1 A320-214 (1678, OH-LXE) DELIVERY.
2001 TOP 50 WORLD AIRLINES - TRAFFIC (BILLION) (RPM):
1 UAL 116.60; 2 AAL 106.15; 3 DAL 97.60; 4 NWA 73.11; 5 BAB 64.24; 6 AFA 59.54; 7 CAL 58.76; 8 DLH 56.76; 9 JAL 50.77; 10 USA 45.93; 11 SWA 44.50; 12 SIA 42.76; 13 QAN 42.14; 14 ACN 41.49; 15 KLM 35.76; 16 ANA 33.16; 17 CAT 27.81; 18 TII 27.43; 19 IBE 25.64; 20 KAL 23.73; 21 ALI 22.45; 22 MAS 22.29; 23 AMW 19.06; 24 VAA 17.65; 25 VAR 16.02; 26 CHI 16.00; 27 EAD 14.37; 28 SAS 14.26; 29 ANZ 13.54; 30 SAA 12.70; 31 SVA 12.56; 32 BEJ 12.39; 33 ASA 12.23; 34 JAS 10.06; 35 THY 9.35; 36 AMX 8.51; 37 PAL 8.36; 38 GIA 8.15; 39 CMA 7.99; 40 ELA 7.79; 41 GUL 7.65; 42 PIA 7.24; 43 AIN 7.10; 44 TAP 6.43; 45 EGP 5.53; 46 OLY 5.24; 47 AUL 5.06; 48 FIN 4.93; 49 IND 4.52; 50 CQT 4.51.
FEBRUARY 2002: TO HONG KONG (3X-WEEKLY).
6 ORDERS (AUGUST 2002) A319/A320/A321'S (CFM56) (ILF) 10 YEAR LEASED. CANCELED ORDER FOR 1 A320 & DEFERRED DELIVERY OF 3 OTHERS.
APRIL 2002: 8,974 EMPLOYEES.
MAIN BASE: HELSINKI AIRPORT (VANTAA) (HEL).
HUB: STOCKHOLM (ARLANDA) AIRPORT (ARN).
OWNERS/SHAREHOLDERS: GOVERNMENT OF FINLAND (58.43%); PRIVATE INVESTORS (31.19%); ODIN FORVALTNING (9.84%).
FINNAIR (FIN) GROUP 2001 = +$7.7 MILLION/+EUR 8.9 MILLION (-93%) (+EUR 1.7 BILLION).
MAY 2002: IN JUNE 2002, CODE SHARE WITH SN BRUSSELS (DAT), TO BRUSSELS.
June 2002: To Toronto (757, 3/week).
July 2002: 2001 = +$6.2 million (+$95.7 million): 12.8 billion (RPK) traffic (+1.6%); 69.2% LF load factor; 7.54 million passengers (PAX) (+1.3%); 277 million (FTK) freight traffic (-16.8%); 10,847 employees (-1.8%).
August 2002: In winter, Kittila to Frankfurt (5x-weekly).
1 order (April 2003) MD-11 (its 5th), Boeing (TBC) leased. A319-112 (1791, OH-LVE) delivery.
September 2002: 1 A319-112 (1808, OH-LVF) delivery.
October 2002: 2 A319-112's (1184, OH-LVG; 1364 OH-LVH), ex-Sabena (SAB) to be put in service in spring 2003, after refitting. Plans to retire 8 DC-9-51's by October 2003.
November 2002: Code share with Swiss Federal Railways (SBB), on the Zurich to Basel/Bern/Lausanne/Lucerne routes (1st agreement with a railway operator).
In January 2003, to Turin.
Keijo Suila, Chairman appointed Chairman of the "Oneworld" (ONW) alliance governing board.
The Technical division is in the process of major reorganization regarding division of component and system engineering.
A new runway was officially opened at the Helsinki Vantaa airport.
December 2002: Plans service to Mumbai (2x-weekly). Extends its code share with Swiss (CSR), Zurich to Helsinki, Zurich to Athens, Bologna, Milan, Nice, Rome, & Venice; Helsinki to Oulu, Tampere, Turku, and Vaasa.
Christoffer Taxell, Chairman. Juha Kinnunen, Managing Director, Finnair Cargo, succeeds Mikko Kuntola, who retired.
January 2003: Keijo Suila, Chairman Oneworld.
In June 2003, to resume Helinki to Osaka (MD-11, 3x-weekly). In summer, seasonal service between Kuopio, Rovaniemi and Zurich (Saturdays, A319).
Sells MD-11 to Babcock (BBB) and leases back for 75 months.
February 2003: Plans to form a charter subsidiary in January 2004, with 7 757-200's.
In September 2003, Helsinki to Shanghai (MD-11, 3x-weekly) (the only Oneworld (ONW) carrier to serve the Chinese business/financial center).
2002 = + EUR 36.8 million/+$39.5 million (+EUR 7.1 million): 12.79 billion (RPK) traffic (+.1%); 7.04 million passengers (PAX) (-6.6%).
Sells another MD-11 (48450) to (BBB) and leases it back for 75 months. The combined sale price of the 2 was approximately $70 million. Plans to retire all MD-11's by 2010. 5th MD-11 (48780, OH-LGE), Boeing Capital (TBC) leased delivery. Sold 2 DC-9's to Tikal Jets Airlines (TKC), Guatemala. The goal is to retire all DC-9's in 2003 and replace them with A320's. A319-112 (1916, OH-LVG), (ILF) leased.
March 2003: Plans to use Aero Airlines, its Estonian subsidiary, to take over domestic Finnish services.
Helsinki to Manchester.
From the effect of the Iraq war and high oil prices, Finnair (FIN) will reduce its workforce by -1,200 jobs (-10%) through 2005, including -200 from its travel agency subsidiary.
DC-9-51 (987-48135) sold to Tikal Jet (TKC).
April 2003: 9,425 employees.
1 order (April 2004) A319 (CFM56), (ILF) leased.
May 2003: A320-214 (1989, OH-LXI), & A321-211 (1978, OH-LZE), (ILF) leased.
June 2003: 10,500 employees.
Code share with Air France (AFA), including connections from Helsinki to Paris to Lyon, Marseilles, Bordeaux, and Nice. Also, includes 6 domestic destinations: Turku, Tampere, Oulu, Kuopio, Jyvaskyla, & Vaasa. Code share with Swiss (CSR), to Graz, and Luxembourg, via Zurich. Adds more code share destinations with SN Brussels (DAT) via Brussels to Spain and the UK. In October 2003, Helsinki to Miami (MD-11, 2x-weekly).
2 DC-9-51's (47772, UR-CBV; 47773, UR-CBY) sold to Khors Air (KHO).
August 2003: Applied to Finnish authorities for its Estonian subsidiary, AERO to fly domestic services in southern Finland, most likely starting with Helsinki to Tampere (ATR72).
Finnair (FIN) acquired 85% of Nordic Airlink (NOQ). Will use the operation as a low-cost vehicle.
September 2003: Finnair (FIN) becomes 1st airline from northern Europe to fly to Shanghai (3x-weekly).
(FIN) Cargo Vienna to Helsinki (757-200F, European Air Transport (EPT) wet-leased, 30 tonnes capacity, 2x-weekly).
2002 = 12.79 million (RPK) traffic (O%); -3.8% (ASK) capacity; 71.9% LF load factor (+2.7); 7 million passengers (PAX) (-6.6%); 299 million (FTK) freight traffic (+7.9%); 9,134 employees (-3.1%).
2002 TOP WORLD AIRLINES TRAFFIC (RPK) (Billion):
50 (HAP) 14.40; 51 (JMA) 13.97; 52 (PAL) 13.52; 53 (AMX) 13.31; 54 (AIN) 13.25; 55 (FIN) 12.79; 56 (BER) 12.73; 57 (ELA) 12.54; 58 (TPR) 12.08; 59 (MON) 11.86; 60 (GUL) 11.84.
DC-9-51 (48134) sold to Khors Air (KHO). A320-214 (2065, OH-LXK) (ILF) leased.
November 2003: Code share with British Airways (BAB), UK to Canada, although it retains its own route licenses. Cooperating with Styrian Spirit on the Graz-Helsinki route over Frankfurt and Zurich. In April 2004, Helsinki to Manchester (11x-weekly).
DC-9-51 (47736) sold to Khors Air (KHO).
December 2003: Halted layoffs of some cabin attendants (CA) because of an unexpected increase in traffic to Asia.
Separates its airplane fleet management and airplane leasing operations into a new company, Finnair Aircraft Finance. Projects to generate # EUR 190 Million/$228 Million from airplane leasing activities in 2004.
Resumed Helsinki to Miami. Milan to Rovaniemi (weekly). Zurich to Kittila (weekly). Paris to Rovaniemi (weekly). Paris to Ivalo to Kittila (weekly). In January 2004, Amsterdam to Kuusamo (weekly).
6th order (May 2004) MD-11, Boeing Capital (TBC) leased.
January 2004: 2003 Group = -EUR 21.7 million/-$19.4 million (-140%) (+EUR 36.8 million/+$44.2 million): 12.97 Billion (RPK) traffic (+1.4%); 69.6% LF load factor (-2.3); 6.85 million passengers (PAX) (-2.7%); 314.5 million (FTK) freight traffic (+5.8%).
February 2004: Code share with Aeroflot (ARO), Helsinki to Moscow.
A320-214 (2154, OH-LXM) delivery.
April 2004: Finnair (FIN) purchased Calidris, Iceland, Information Technology (IT) solution "to supply appropriate passenger information on its flights to the USA, China, and other countries requesting Advance passenger Information."
DC-9-51 (47696) sold to Khors Air (KHO). 6th MD-11 (48766), ex-CityBird (CBD), Boeing Capital (TBC) leased. A321-211 (2208, OH-LZF) delivery.
May 2004: Purchased remaining 15% of Nordic Airlink (NOQ) from Gunnar Ohlsson, the company's founder.
757-2Q8 (29382) wet-leased to Lapland Air (SCZ). 757-200F European Air Transport (EPT) wet-leased to Finnair (FIN) for Helsinki to Cologne/Bonn (weekly).
June 2004: Aeroflot (ARO) signs a maintenance agreement with Finnair (FIN) Technical Services for technical support of 4 DC-10-30F's based at its hub at Frankfurt to Hahn, including maintenance planning & equipment support, overhauls, and line maintenance support.
Amadeus acquires a controlling 55% stake in travel portal Opodo for EUR 62 Million/$74.5 Million in cash. Opodo was created by 9 European network airlines: Aer Lingus (ARL); Air France (AFA); Alitalia (ALI); Austrian Airlines (AUL); British Airways (BAB); Finnair (FIN); Iberia (IBE); (KLM); and Lufthansa (DLH), whose stakes will be reduced in proportion to the investment by Amadeus. The 3 biggest shareholders: (AFA); (BAB) and (DLH) will hold 10.3% each, while the shareholdings of (ARL) and (AUL) will be diluted to 0.51% each. Amadeus, which is majority owned by (AFA); (IBE) and (DLH) said Opodo will continue to operate as a separate company.
Agreement with 3 banking institutions for a 5-year EUR 200 million/$244 million unsecure syndicated loan, intended for "working capital needs."
OneWorld Alliance: Aer Lingus (ARL); American (AAL); British Airways (BAB); Cathay Pacific (CAT); Finnair (FIN); Iberia (IBE); LAN (LAN); & Qantas (QAN).
In July 2004, code share with Aeroflot (ARO), Helsinki to Moscow.
Lasse Heinonen, Senior VP & (CFO), effective October 2004.
$7.5 Million contract to (IFS) Applications to streamline Finnair (FIN) Technical Services's maintenance, repair & overhaul (MRO) and fleet management operations. (IFS) Applications will control all processes related to airframe maintenance, engine overhaul, plus system & component repair in one integrated solution.
Global ePoint AirWorks will install laptop computer power systems in Finnair (FIN)'s newly acquire MD-11's.
MD-83 (49623) wet-leased to Nordic Airlink (NOQ). DC-10-30F World Airways (WLD) wet-leased to Finnair (FIN) for Helsinki to New York all-cargo service. $306 Million, 12/8 orders (September 2005) Embraer E170's, 76Y, to replace its MD-80's & ATR72's that are being retired.
August 2004: All 6 MD-11's will undergo a "radical change" in 2005, including equipping them with lie-flat beds in business class (C) for 36 passengers along with seat pitch increased from 127 cm/50 inches to 160 cm. The in-flight entertainment system will be renewed with system display units that have Liquid Crystal Diode (LCD) monitor technology installations also in economy (Y). Plans include operating the MD-11's until 2010 and might add a 7th MD-11 for its expansion into the Asia/Pacific market.
In December 2004, Helsinki to Ostersund (2x-weekly charters) for SkiStar.
September 2004: In March 2005, seasonal service, Helsinki to Venice (MD-80, 2x-weekly).
A319-112 (2266, OH-LVL) delivery.
October 2004: Implements the Sirax revenue accounting system developed by Lufthansa (DLH) Revenue Services & Lufthansa Systems.
Resumes Helsinki to Tenerife. In November 2004, Helsinki to Alicante, Las Palmas. In January 2005, Helsinki to Salzburg (weekly). In March 2005, Helsinki to Venice (MD-82, 2x-weekly).
November 2004: Helsinki to Ostersund (MD-82, 2x-weekly). In May 2005, Helsinki to Hong Kong (3x-weekly). In September 2005, Helsinki to Guangzhou (3x-weekly).
2 ATR72-201's (162, OH-KRD; 174, OH-KRE), transferred to Aero Airlines.
January 2005: 2004 = +EUR 11.8 million (-EUR 16.2 million): 15.6 billion (RPK) (+20.2%); +17.4% (ASK) capacity; 71.2% LF load factor (+2.4); 8.2 million passengers (PAX) (+19%).
February 2005: In June 2005, Helsinki to- Boston, via Stockholm Skavsta (757-200, 3x-weekly). Seasonal flights to Toronto, Istanbul and Ponta Delgada.
March 2005: Keijo Suila, (CEO) will retire at the end of 2005.
Helsinki to Venice (2x-weekly).
April 2005: 8,711 employees.
Will retire its 10 MD-80's at an accelerated rate by the fall of 2006, resulting in a fleet of 7 757's, 6 +1 order MD-11'S, 29 A320 family airplanes and 12 Embraer E170's to be acquired over the next 2 years.
May 2005: Martinair (MTH) signs a heavy maintenance contract for 5/1 MD-11F's with Finnair (FIN) Technical Services.
June 2005: Jukka Hienonen, President and (CEO), replacing Keijo Suila.
Enhanced its website with technology from Amadeus e-Travel that allows customers to view prices for flights according to time of travel.
July 2005: EUR 8 million/$9.5 million maintenance support contract to Finnair (FIN) Technical Services covering component & Auxilliary Power Unit (APU) maintenance for Gemini Air Cargo (GMN)'s 7 DC-10-30F's (for 5 years) & 4 MD-11F's (for 7 years).
In August 2005, Marketing Division in (FIN)'s Scheduled Passenger Traffic business area will be renamed as the Commercial Division.
In April 2006, Helsinki to Edinburgh (A319). Helsinki to Krakow (Embraer E170).
Finnair (FIN) signed with (SITA) (SC) to migrate its existing network infrastructure over to a (SITA) (IP)-based wide area network solution, which is being implemented at more than 80 locations across 3 continents.
August 2005: By June 2006, Helsinki TO Nagoya Chubu Central Airport, its 3rd destination in Japan and 9th in Asia. In winter, 7th MD-11 delivery for routes to Osaka (5X-weekLY), to Tokyo (2X-weekLY), and to Nagoya (3x-weekly).
September 2005: (ARINC) reached separate agreements with (SAS) and Finnair (FIN) to provide the carriers with its Globalink satellite voice and data services.
1st of 12 Embraer E170's (00093, OH-LEE), delivery.
October 2005: Finnair (FIN) is adding a seventh MD-11 in December and aims to acquire an eighth next year as it builds its Asian network. "Within a couple of years, we will have some 10 wide body airplanes. We will add between 1 and 2 new destinations in Asia per year and increase frequencies to current destinations," President & (CEO) Keijo Suila declared. (FIN) opened Guangzhou last month and adds Nagoya in June. Asian traffic makes up a quarter of its scheduled traffic and passenger and cargo revenue.
Swedish charter airline Novair (NOO) will become the 1st customer outside Finnair (FIN) Group for A320 maintenance, when it brings its A321 in for airframe maintenance at Finnair (FIN) Technical Services. Xinjiang Airlines (XIJ) will fly two of its ATR72s to Helsinki for heavy maintenance.
Air Atlantique took delivery of the 1st of 2 ATR72-210s (145) purchased from Finnair (FIN). The Coventry-based carrier expects to have the airplanes in service, along with its 3 other ATRs by the end of October.
November 2005: Finnair (FIN) reported a net profit of +€26.4 million/+$30.86 million for the quarter ended September 30, an impressive +193.3% rise over year-ago profits of +€9 million. The carrier was able to keep expenses in check (they rose just +9%) as turnover increased +13.4% from €415.6 million to €471.2 million. Operating profit doubled from + €16.1 million to +€32.1 million.
"The 3rd-quarter result shows that we are a strongly profitable company. We doubled the operating profit, even though high fuel costs consumed the fruits of our productivity programs," said President & (CEO) Keijo Suila.
Passenger traffic rose + 8.9% (RPK)s and load factor lifted + 2.2 points to 75.3% LF. Unit revenue for passenger traffic grew + 4.9% against a -3.6% decline in cargo unit revenue.
Year-to-date through September 30 profit totaled + €64.3 million, a +196.3% increase over 2004's + €21.7 million. Revenues grew +12.6% to €392.5 million, expenses rose +7.3% and operating profit went from €18.4 million to €86.1 million.
Finnair (FIN) Cargo signed a 5-year contract with (CHAMP) Cargosystems for a suite of Web-based applications designed to cover (FIN)'s operations, revenue accounting processes and warehouse management system.
(FIN) inaugurated nonstop service from Helsinki to Delhi on November 1st. (FIN) operates 3X-weekLY with an MD-11 departing Finland on Mondays/Wednesdays/Fridays and India on Tuesdays/Thursdays/Saturdays. (FIN) said a quarter of its revenue comes from its Asian routes.
MD-11 (48753, OH-LGG), & E170-100ST (00106, OH-LEF), deliveries.
2 E170-100ST's (00106, OH-LEF; 00107, OH-LEG), deliveries.
December 2005: Oneworld (ONW) member Finnair (FIN) and soon-to-be-member Japan Airlines (JAL) agreed to code share on (JAL)'s domestic routes and (FIN)'s European routes starting this month. (FIN)'s code will be added to (JAL)'s routes between Osaka and Sapporo, from Fukuoka to Osaka and Tokyo and from Tokyo Haneda to Osaka. (JAL)'s code in turn will be added to (FIN)'s Helsinki to Amsterdam and Helsinki to Frankfurt routes. Both companies will explore possibilities to code share on (FIN)'s routes to Japan and (JAL)'s routes from Japan to other Asian destinations.
(FIN) implemented Lufthansa (DLH) Systems' (SIRAX), an accounting process matching ticket sales with concrete flight data that accounts for codesharing, alliances, taxes and fees.
In what it called "the biggest fleet modernization in its history," (FIN) said it will acquire 9 A350-900s and 3 (CFM56-5)-powered A340-300Es (Enhanced). The value of the deal and engine choice for the A350s were not announced. The A350-900s will begin arriving in 2011. The A350-900 is the larger of the 2 versions. (FIN) will take them in a 314-seat, 2-class layout. The range of the type is 7,500 nm/13,890 km.
The A340-300Es begin delivering in the spring of 2007. The Enhanced version is equipped with (CFM56-5C4/P)s, providing lower fuel burn and emissions among other improvements.
"By 2009, our long-haul fleet will consist of at least 10 airplanes," outgoing (FIN) President & (CEO), Keijo Suila said. "The decision reflects our confidence and commitment to our Asian growth strategy. It will enable us to open new destinations as well as to increase flight frequencies to destinations where demand is greatest." The long-haul fleet consists of 7 MD-11s, with an 8th expected to arrive next year. (FIN) said it will begin retiring its MD-11s in 2012.
The decision to order the A350 was "influenced by the affordability of its capital and operating costs compared with other options." Its fuel consumption per passenger is one-third lower than that of the MD-11, according to (FIN).
The deal also includes additional purchase rights, and (FIN) can swap some A350-900 orders for the 250-seat, A350-800, according to Jukka Hienonen, who will take over as President & (CEO) at the beginning of 2006. (FIN) plans to retire its 9 MD-80s by next summer.
(FIN) converted 4 options for Embraer E170s into firm orders for E190s. These are in addition to an original 2004 order for 12 E170s. Deliveries of the additional jets are scheduled for 2007. (FIN) still holds options on 4 E170s.
E170-100ST (00112, OH-LEH), delivery.
January 2006: FL Group of Iceland (ICE) purchased 6% of Finnair (FIN), adding to airline holdings consisting of Sterling (STR) and 16% of EasyJet (EZY), which has been the subject of recent takeover speculation. The investment in (FIN) brings the total holding by Icelandic (ICE) interests in the Nordic airline to 18%. The Finnish government has control with 57%. (FIN) plans to add an eighth long-haul airplane to support its Far East expansion, which could be an A340-300 rather than another MD-11 "depending what is available on the market," a spokesperson said. It ordered nine A350-900s and three A340-300Es in December. (FIN) transported around 8.5 million passengers in 2005, an increase of +4.5% over 2004 and a record for Finnair Group (FIN). Passenger traffic (RPK)s grew +7.2% while (ASK)s increased +5.1%. This resulted in a load factor of 72.6% LF, up +1.4 points.
Finnair Group (FIN) named Executive VP, Scheduled Passenger Traffic Henrik Arle to the position of deputy (CEO). Arle has been with (FIN) since 1976 and is a member of the group management board. Also, Kaisa Vikkula was appointed Senior VP, Leisure & Travel Services, and has been a member of the management board from March 1. Vikkula previously was Managing Director of Mascus Oy and head of corporate communications and a member of the management board at Partek. She has been a member of the (FIN) board since 2003. Kimmo Soini, a 21-year veteran of (FIN), was named Senior VP, (FIN) Technical Services (FTS) and a member of the management board. The current head of (FTS), Jarmo Vilenius, will become Managing Director of (FIN) Facilities Management.
(FIN) is adding three weekly flights from Helsinki to St Petersburg from May, bringing weekly frequencies to 10.
February 2006: Finnair (FIN) will inaugurate nonstop service from Helsinki to Krakow on April 13th. (FIN) will operate 2 flights a week, on Thursday/Sunday, using an Embraer EMB-170, however, several flights in the first few weeks will operate with an MD-80. (FIN) will launch a weekly (Thursday) EMB-170 service from Helsinki to Kiev Borispol on March 30 in addition to the twice weekly service operated by codeshare partner Ukraine International Airlines (UKR). (FIN) will resume direct service from Helsinki to Boston on June 1st. The airline will operate 2 flights a week, on Tuesday/Thursday, with a 757-200. This year instead of operating via Skavsta, the flight will stop at Stockholm's Arlanda Airport. Flights departing Helsinki on June 1 and June 8 will operate nonstop.
(FIN) lost -€2.9 million/-$3.4 million in the quarter ended December 31 compared to a profit of +€3.9 million in the final quarter of 2004, but still managed to end the year with an impressive bottom line as its annual profit more than doubled to +€61.4 million from +€25.6 million. "All in all, the 2005 result was acceptable and, in terms of the second and third quarters, even excellent. The result was the best recorded for five years," President & CEO, Jukka Hienonen said. "The company's profitability developed well from the beginning of the year, as years of cost-cutting and productivity improvements became increasingly evident."
For the year, operating income increased +12.1% to +€1.91 billion while expenses climbed +9.2% to €1.83 billion, nearly tripling operating profit to +€81.9 million from +€31 million. (FIN) attributed the growth to higher passenger demand - - especially to Asia, which rose +17% - - increases in average fares (up +4% - +5% in the second and third quarters) and improved operational and economic efficiency. Passenger traffic was ahead +7.2% to 16.73 billion (RPK)s on a capacity boost of +5.1% to 23.04 billion (ASK)s. Passenger load factor gained +1.4 points to 72.6% LF, and unit revenue rose +3.2%. Freight traffic 446.60 Million (FTK) (+11.9%). Unit cost increased +2.4%, but declined -1.5% eliminating fuel cost and gains from hedging of future cash flow.
In the fourth quarter, operating revenues rose +10.6% to €496.7 million, but expenses surged +14.8% to €500.9 million, dropping operating result to a -€4.2 million loss, compared to a +€12.6 million profit in the year-ago quarter. The company admitted that fuel surcharges hampered leisure travel demand later in the year. The carrier has hedged 60% of its fuel for the first half of 2006 and 40% for the second half.
"The stable and sound long-term development of (FIN) will continue, even though [in 2006] competition in European traffic will tighten and price levels will come under pressure," the company said. The market, rather than rising fuel costs, will determine whether fare hikes are possible, but traffic and load factor growth is expected to continue, the airline said.
E170-100ST (00120, OH-LEI), delivery.
March 2006: Following a fourth quarter in which it lost -€2.9 million/-$3.5 million owing to surging costs, Finnair (FIN)'s new President & (CEO), Jukka Hienonen, said that the carrier will keep working toward securing a cost base that will ensure profitability even as it continues to demonstrate operational improvements. "There is a lot to improve inside (FIN), even if we are in a better situation than other carriers," Hienonen said. He revealed that he would like to reduce unit cost excluding fuel by -5% in 2006 and said one source for possible savings could be the company's 1,900-employee maintenance arm. "We have to restructure this unit to be more competitive," he said, adding the department will be given two years to develop a strategy to increase productivity. "If we are not competitive, others will do our maintenance," he added. (FIN)'s incoming fleet of A340s likely will have its heavy checks performed outside Helsinki.
So far, the airline's Asian expansion has paid off. In February, Asian passenger traffic grew +23.9% (RPK) and load factor rose +2.7 points. Up to 40% of (FIN)'s revenue comes from its Asian or Asia-related routes. By 2010, it could operate a fleet of 12 long-haul airplanes and derive more than half its scheduled traffic revenue from Asian services.
Kuala Lumpur, Manila and Seoul are on the radar as potential destinations but nothing has been confirmed. In the meantime, Heinonen said he wants to increase frequencies to Tokyo and let the Chinese market settle, as he believes the airline has reached "critical mass" there. Expansion in Russia also is a possibility.
(FIN) will upgrade its Helsinki to Hong Kong route from direct to nonstop service on May 1st. Flights are currently operated via Bangkok but will go nonstop 3x a week departing Helsinki on Mondays, Wednesdays & Fridays and increasing to 4x a week on July 1st with a Saturday flight, all with MD-11s. (FIN) will increase the frequency on its Helsinki to Shanghai nonstop service from 5 to 7 flights a week on July 1st. Flights are operated with an MD-11. (FIN) will increase the frequency on its Helsinki to Guangzhou nonstop service from 3 to 4 flights a week on July 1st. Besides Helsinki departures on Tuesdays, Fridays & Sundays, it will add a Thursday departure, all with MD-11s. (FIN) will increase the frequency on its Helsinki to Singapore direct service from 4 to 7 flights a week on April 29th, with the addition of a Helsinki departure on Mondays, Wednesdays & Fridays. The daily service, operated with an MD-11, stops in Bangkok. (FIN) will boost Asian service earlier than planned to five flights a week to Hong Kong and six to Osaka between July and October.
(FIN) and Pulkovo Airlines (STG) signed a codeshare agreement for joint flights between Helsinki and St Petersburg from March 26.
(FIN) Group's airport ground handling service company, Northport Oy, is forming a subsidiary to provide services at Oslo Gardermoen from October 1. The new company's first contract will be with Norwegian Air Shuttle (NWG).
(FIN) announced the beginning of its transition to the "Airbus era" with the signing of a Memo of Understanding (MOU) with Virgin Atlantic Airways (VAA) for acquisition of an A340-300. The airplane will enter Finnair (FIN) service in July.
Flynordic (NOQ), (FIN)'s Stockholm-based low-cost subsidiary, faces significant challenges in adapting to new market realities in Sweden. "Every airline is losing money [there], including us," (FIN) (CEO), Jukka Hienonen said in Helsinki. "The Swedish market has changed." Asked how much time remains for Flynordic (NOQ) to improve its results, he said, "more important than time is to find the right direction. We need more efficiency on the route network and frequencies. We want to have black figures." Sweden's second-largest carrier, (NOQ) transported 1.2 million passengers last year and currently operates a fleet of eight MD-83s. In February, it carried 90,400 passengers, up +4.9% from last year.
(FIN) selected the Rolls-Royce (RRC) (Trent 1700) over the (GEnx) launch engine to power the nine A350-900s it ordered late last year. The carrier also holds four options on the new widebody, which will begin delivering in 2011. The engine deal is worth close to €400 million/$487.4 million at list prices.
(FIN) gave Airbus (EDS)'s A350 program a boost by signing a contract for nine A350-900s, three A340-300Es and four options, firming a commitment it made in December. The first of the (Trent 1700)-powered A350s will be delivered in 2012, and WILL seat 314 in a two-class configuration. The long-haul fleet renewal is part of (FIN)'s Asian growth strategy. Airbus (EDS) said it now has 182 firm orders and commitments from 14 customers for the A350.
April 2006: FL Group announced the sale of its 16.9% stake in easyJet (EZY) for approximately €325 million/$395.9 million, earning Icelandair (ICE)'s parent company some €140 million in profit from its initial investment, and representing an annual return of 70%, "far surpassing" the 20% target. JPMorgan was the sole bookrunner and JPMorganCazenove was joint lead manager. FL Group said the proceeds will be "channeled into new investments during 2006." It now has liquid assets of about €600 million.
FL Group exercised purchase rights for two additional 787-8s on behalf of (ICE). Delivery is scheduled for spring 2012. The airplanes are worth approximately $290 million at list prices and will be powered by (Trent 1000)s. (ICE) will take delivery of its first two 787-8 Dreamliners in 2010.
FL said (EZY) has "great prospects" and made clear that the sale was "primarily due to other investment opportunities." It has been investing in nonaviation companies since its November 2005 equity offering. However, (CEO), Hannes Smarason said, "The sale . . . does not affect our other investments in the aviation sector and we remain committed to our investments in (ICE), Sterling (STR) and Finnair (FIN)." The group also announced it increased its share in (FIN) to 10%.
(FIN) will inaugurate direct service from Helsinki to Kuala Lumpur on May 7. (FIN) will operate 3 flights a week via Bangkok.
E170 (00127, OH-LEK), delivery.
May 2006: Employees = 9,447.
The (FIN) Group unveiled a cost-cutting plan aimed at achieving annual savings of -€80 million as it reported a first-period loss of -€3.8 million/-$4.8 million, reversing last year's March quarter profit of +€12.2 million. (FIN) said the "structural change to safeguard the profitability of all parts of the company" will result in elimination of approximately -670 jobs in its Maintenance Repair & Overhaul (MRO) business and administrative support, largely through early retirement and outsourcing. At the same time, it said passenger traffic increases, especially on long-haul services to Asia, will lead to creation of up to +350 flight operations (FC/CA) positions this year.
"Safeguarding (FIN)'s viability demands courage to cut unprofitable businesses. Our fuel bill rose last year by +€100 million and this year we will pay +€120 million more. We will only be able to pass on a fraction of this into ticket prices," President & (CEO), Jukka Hienonen said. Average ticket price rose last year by +3.6%.
First-quarter revenue increased +7.4% to €486.1 million, while expenses climbed +13.2% to €491.3 million, turning the year-ago quarter's +€18.7 million operating profit into a -€5.2 million loss. Fuel soared +49.6% to €89.3 million. The company was debt-free at quarter's end, but still concluded, that change is required to stay competitive.
Passenger traffic grew +4.2% in the period to 4.5 billion (RPK)s against a +2.3% rise in capacity to 6.03 billion (ASK)s, lifting load factor +1.3 points to 74.6% LF. (FIN)'s Asian growth strategy continued to appear sound as traffic increased +24.1% to 1.32 billion (RPK)s on a +21.8% capacity jump to 1.68 billion (ASK)s. Load factor was up +1.5 points to 78.5% LF. Unit revenue climbed +4.2% to 71.3 euro cents, but cost per (ATK) increased +10.2% to 46 euro cents.
Starts nonstop flights Helsinki - Pisa. (FIN) announced a summer schedule, that will feature new flights to Nagoya and Geneva in June; elimination of the Bangkok stopover on its Helsinki - Hong Kong service, which will increase from thrice-weekly to 5x-weekly from July through October, and increases in operations to Osaka, Shanghai, Guangzhou and St Petersburg. The carrier also announced it will launch a 3x-weekly Helsinki - Kuala Lumpur service, operating via Bangkok, in May 2007.
(FIN) said its ground handling subsidiary Northport Oy will close its loss-making Tampere unit this year.
As (FIN) moves to a more modern fleet - - it will finish replacing its MD-80s with Embraer 170s by summer - - its maintenance needs will change, as Heinonen said in March, when he said the new A340 fleet will not undergo its heavy checks in Helsinki. Some -300 of the positions will be cut from (FIN) Technical Services.
June 2006: Finnair (FIN) will launch daily Helsinki - Geneva flights aboard an Embraer EMB-170 and will start 3x-weekly Helsinki - Nagoya Chubu flights. It launched Helsinki - Pisa service earlier aboard an A320.
Japan Airlines (JAL) and (FIN) will expand their codeshare agreement to include thrice-weekly (JAL)-operated flights from Nagoya Chubu to Sapporo and Fukuoka.
(FIN) announced the conclusion to statutory negotiations with employees covering the -670 technical and administrative jobs it wants to eliminate. It said it still is talking with its subsidiaries and flight staff. It plans to implement the cuts largely through early retirements and will announce the number of layoffs required this fall. The cuts will result in a €10 million hit on its second-quarter profit-and-loss account in pension and "other personnel arrangement fees."
(FIN) took delivery of a former Virgin Atlantic (VAA) A340-311 (058, OH-LQA), that will be used on the Helsinki - Shanghai route. (FIN) placed its 1st Airbus wide body airplane into service on a flight from Helsinki to Kuopio (Finland). The A340 will first operate around 30 domestic flights before being introduced on the Helsinki to Shanghai route from Saturday July 1st. (FIN) has a total of 3 A340s and 9 A350s coming with the next A340 due in 2007 - 2008. The current MD-11 fleet will be phased out by 2012.
(FIN) placed a second ATR72 with Bravo Aviation (BRV) in a transaction arranged by Skyways Aviation.
July 2006: Finnair (FIN) flew 1.55 billion (RPK)s passenger traffic in June, a +7.8% rise over the year-ago month. Capacity grew +2.9% to 1.97 billion (ASK)s and load factor increased +3.5 points to 78.7% LF.
(FIN) will fly nonstop from Helsinki to Madrid by September and to Manchester from October 29, eliminating the Stockholm stopover on each flight. It will start Helsinki - Ljubljana flights in April 2007, operating 4x-weekly, on Mondays, Thursdays, Fridays, & Sundays, aboard Embraer E170s. Finnair (FIN) will resume nonstop service from Helsinki to Lisbon on March 29th. The airline will operate 3x-weekly, on Mondays, Thursdays & Saturdays, using an A320.
(FIN) placed seven firm orders plus two options for Aviation Partners Boeing (APB) Blended Winglet Systems for 757-200s. Installations, which are likely to be performed by (FIN) Technical Services in Helsinki, will begin in October and complete August 2007.
(FIN) said it has negotiated a compensation package with Airbus (EDS) to cover the delays in the introduction of the A350, a revamped version of which was unveiled yesterday at the Farnborough Airshow. Terms of the compensation deal were not disclosed. (FIN) originally planned to take the first of nine firm A350s in the spring of 2012. That has been pushed back to 2013.
"We are pleased that we will be acquiring an even better airplane than we originally ordered in December 2005," (FIN) Deputy (CEO), Henrik Arle said. "Naturally, the changes in the release timetable require us to make adjustments, but we have negotiated on these interim arrangements with Airbus (EDS) in a constructive atmosphere. Our long-haul traffic growth will continue and our fleet renewal program is moving forward."
Arle said the airline will increase the number of A340s in the fleet (it has three firm orders plus four options) until the A350 is available and extend its leases on seven MD-11s. "The basis of our arrangement with Airbus is that the foundations and profitability of our business is not threatened by the change," he said.
August 2006: Finnair (FIN)'s second-quarter net profit plunged to an "unsatisfactory" +€900,000/+$1.2 million from the +€26.4 million earned in the year-ago period as falling unit revenues and one-time charges weighed on the carrier's bottom line. The company still expects to post a full-year profit, but said that figure will be below the +€61.4 million earned in 2005. "(FIN) is rapidly growing in strength as a player in traffic between Asia and Europe and this is reflected as a structural change in our operations," President & (CEO), Jukka Hienonen said. "The costs arising from this are recognized in the second quarter result. As a consequence of a strong order book, a modern fleet and the structural changes under way, I believe that (FIN) has a good basis for improving profitability in future."
Operating revenue increased +4.9% to €502.2 million but expenses rose at a faster +12% clip to €496.7 million, dropping (EBIT) -84.4% to €5.5 million. In addition, the carrier absorbed a €10 million charge related to the June decision to cut -670 employees by the end of next year and a €5.2 million writedown of (FIN) Technical Services' inventories from discontinued airplane types. It also has incurred expenses related to the replacement of its MD-80s with Embraer airplanes.
Passenger traffic increased +6.8%, capacity inched up +0.4% and load factor rose +5.1 points to 75.5% LF. Consolidated unit revenue growth of +0.8% was outstripped by a +6.5% increase in unit costs, while scheduled passenger traffic unit revenues fell -4.6% as European and domestic fares declined. Hienonen remained bullish on the airline's massive Asian expansion, saying, "demand for our Asian traffic continues to be strong, with a good price level, and our market share is still increasing."
Six-month operating revenue grew +6.1% to €988.3 million against a +12.6% rise in expenses to €988 million. (EBIT) plunged to €300,000 from €54 million and the net result swung to a -€2.9 million loss from a +€38.6 million profit.
(FIN)'s Asian traffic will grow in the latter part of this year and 2007 by +30% thanks in part to an investment in Helsinki Vantaa's Asian terminal announced by Finavia, the country's civil aviation administration. (FIN) will add thrice-weekly Delhi service in October, increasing to five-times-weekly next spring. It also will launch service to Kuala Lumpur and add frequencies on Japanese and Chinese routes. CEO, Jukka Hienonen said the airline will carry 1 million passengers on Asian routes this year. He recently said that Seoul and Chengdu are on the radar.
(FIN) became the second European airline to operate an Embraer EMB-170 simulator. Its eighth EMB-170 joined the fleet last weekend. By fall 2007, it will fly 10 EMB-170s and six EMB-190s. It also holds four options with Embraer. The (FIN) Training Center at Helsinki Vantaa currently has simulators for the DC-9, ATR42/72, MD-80, MD-11, 757, and A320. Approximately half the simulator capacity is sold to other airlines.
2 EMB-170-200SD (00139, OH-LEL; 00141, OH-LEM), deliveries.
September 2006: Finnair (FIN) will inaugurate nonstop service from Helsinki to Nuremberg on April 10th. The airline will operate a daily flight using the Embraer EMB-170. Helsinki departures will be in the mornings on Mondays, Tuesdays, & Sundays, and afternoons the rest of the week. (FIN) will increase the frequency on its Helsinki to Paris (CDG) route from 4 to 5 flights a day on November 1st. The airline will operate the 5 flights with an EMB-170 departing Helsinki at 1935 (daily except Saturdays) and Paris (CDG) at 0740 (daily except Sundays). (FIN) will increase the frequency on its Helsinki to Copenhagen route from 4 to 5 flights a day on January 7th. (FIN) will operate the 5 flights with an EMB-170 departing Helsinki at 1945 (daily except Saturdays) and Copenhagen at 0620 (daily except Sundays).
Amadeus announced that Finnair deployed Amadeus Ticket Changer, which enables the airline to automate the ticket change and reissue process from any location in any currency.
EMB-170-100ST (00146, OH-LEN), delivery.
October 2006: Finnair (FIN) will boost its Helsinki - Tokyo service from two to four weekly flights from December 1 and will use A340-300s to operate the added flights.
(FIN) and Luxembourg's Cargolux Airlines (CLX) are to start a new cargo service between Luxembourg - Gothenburg and New York as of 7 January, (FIN) said in a statement.
The weekly flights are to be operated with a Cargolux (CLX) 747-200 airplane. The new route follows a Luxembourg - Helsinki -Hong Kong service launched by the two carriers two years ago.
(FIN) said it is preparing for an illegal strike by members of the (SLSY) flight attendants (CA) union, scheduled to begin early Thursday morning. (FIN) said the resulting flight cancellations could cost it -€2.5 million/-$3.1 million per day. The news came after (FIN) announced it would recruit +500 cabin attendants (CA) by next fall, to its Aero subsidiary under the national collective agreement. The hires are necessary to handle growing Asia - Europe traffic.
"The salary level of (FIN) flight attendants (CA) is about +30% higher than that of the national collective agreement. This situation is unbearable for the company. Due to the decrease in ticket prices, the increase of costs and the tough competitive situation, (FIN) does not have the means to employ new cabin personnel at higher salary rates than our competitors, which already apply the national collective agreement," Senior VP Leisure & Travel Services, Ms Kaisa Vikkula said. The airline has been negotiating the recruitment since May. (SLSY) rejected a "proposal for a solution to a question regarding the cabin attendants' collective labor agreement" and the company said that decision made the recruitment necessary "in order to ensure its traffic operations."
(FIN) said that it will be able to operate some domestic and European scheduled flights should a strike planned by the (FIN) flight attendants (CA) union begin this morning. The flights would run on irregular schedules. An MD-11 would be operated to London Heathrow and Paris Charles de Gaulle and smaller airplanes to Brussels, Stockholm Arlanda and Tallinn. No long-haul flights will be operated except for a cargo service to Beijing. Domestic destinations will include at least Oulu, Kuopio and Tampere. If the strike threat is cancelled, flights will run normally today.
(FIN) and Finnish flight attendants's (CA) union (SLSY) failed to reach an agreement yesterday in their dispute over the recruitment of new cabin staff, resulting in a strike that began at 4 am local time.
(FIN) said it was able to operate its reduced strike schedule but the walkout is slated to continue today. It said it will add more flights today, operating all eight leisure flights and adding two more scheduled services to Barcelona and Budapest, bringing total European destinations to eight. Long-haul flights will not be operated. Domestic destinations are the same as on Thursday: Oulu, Kuopio and Tampere. A cargo flight will be operated from Beijing to Helsinki.
"Now that we want to recruit 500 new flight attendants (CA) to (FIN) on the terms of this collective agreement, (SLSY) does not accept it. It is difficult for me to understand that one of the key (FIN) employee groups is so set against our strategy, which is ensuring growth and creating new jobs in Finland," (CEO), Jukka Hienonen said.
Later, (FIN) said that it was returning to normal flight schedules "step by step" following a two-day strike by its cabin staff.
(FIN) and the (SLSY) union reportedly reached a settlement in which (FIN) agreed to hire new flight attendants (CA) recruited through its Aero subsidiary under its internal labor agreement rather than the national collective labor agreement. (FIN) warned that the arrangement might affect the number of flight attendants (CA) recruited, originally expected to be 500.
The settlement was facilitated when other unions offered their support to (SLSY), including (AKT) workers who stopped refueling airplanes, Finnish news agency "STT" reported.
(FIN) will take a -€7 million/-$8.8 million direct hit as the result of last week's flight attendant (CA) strike, in addition to a -€3 million loss in future ticket reservations, the airline said. It now forecasts an operating profit "clearly below" last year's +€81.9 million. "Our goal is to develop our Group structure towards profitability on the basis of the plans we have previously published. In administrative functions, we have already implemented changes, and last week we announced the outsourcing of our facilities management services. Work on improving (FIN) Technical Services efficiency is also ongoing," President & (CEO), Jukka Hienonen said, adding that the economic effects of the structural change will be seen next year. "The continuation of a strong growth in our Asian traffic, requires clearly higher profit levels in the future," he said.
November 2006: 1st nine months Finnair (FIN) group = 13.55 billion passenger traffic +8.3% (RPK), on a +3.9% rise in capacity to 17.8 billion (ASK)s, producing a load factor of 76.1% LF and carried 6.57 million passengers +4.9%.
(FIN) reported a third-quarter net profit of +€10.3 million/ +$13.1 million, narrowed -61% from net income of +€26.4 million in the year-ago quarter, and said it will cut jobs and outsource "some operations" in an effort to lower operating expenses.
President & (CEO), Jukka Hienonen said the results were "lackluster and reflect the entire year's financial performance." The carrier said it will earn a profit for the full year, "but clearly below the previous year's level." It posted full-year 2005 net income of +€61.4 million. It cited a +31.9% rise in fuel costs to €105.1 million, as a key reason for the disappointing third-quarter results.
Hienonen said "structural changes" will be implemented to ensure stronger earnings. "During this year and next, personnel numbers will be cut in support functions, and some operations will be outsourced and restructured," he said. Specifically, -670 administrative and support function jobs will be eliminated. The carrier also said its "priority is adapting operations expressly to the needs of Asia-Europe traffic," which grew +29.2% in the first nine months to 4.52 billion (RPK)s, higher even than its inter-Europe traffic.
Third-quarter revenues increased +7.2% to €521.1 million while operating costs rose +11.6% to €506.4 million, producing an operating profit of +€14.7 million, down -54.2% from +€32.1 million in the year-ago quarter.
The European Union (EU) and the Russian Federation finally agreed to phase out costly Siberian overflight fees by 2013. "This is a big success. The agreement will significantly improve the competitive situation of our European airlines and ease their operations between Europe and the growing markets in Asia," European Commissioner for Transport, Jacques Barrot said.
In 2005 - 2006, (EU) carriers paid about $331 million to Aeroflot (ARO) for the right to fly over Russia on the way to Asia. In 2003 - 2004, the amount was $250 million. The (EC) always has maintained that these royalties, which were in addition to normal air navigation charges, contravened the Chicago Convention.
The Soviet Union introduced the fees in 1986 to compensate for traffic that Aeroflot (ARO) lost to foreign carriers and the payments effectively were made part of commercial agreements that (EC) carriers were obliged to sign with Aeroflot (ARO) as part of the bilateral air services agreements between member states and the Russian Federation.
Under the new agreement, (EC) carriers no longer will have to conclude mandatory commercial agreements with (ARO) for the use of trans-Siberian routes and all royalty payments will be abolished by December 31, 2013, meaning airlines will pay only air navigation charges, which will be cost-based and transparent. Existing fees will be reduced gradually from 2010, and operations launched by (EC) carriers during the transition period will be free of overflight charges. (EC) airlines will be able to keep overflight frequencies currently leased from (ARO), while Russia committed to grant new frequencies in bilateral negotiations.
All principles agreed by the (EU) and Russia will have to be implemented in bilateral air services agreements between the 25 member states and Russia before May 2007.
(FIN), which has a heavy investment in its Asian services, said the deal will lower annual costs by more than -€20 million/-$26.2 million after 2013. It pays nearly €30 million per year in overflight charges and more than half of the sum consists of extraordinary royalty payments on services to China and Japan. Its Asian traffic is increasing by more than +20% per year.
(FIN) will start four-times-weekly, Helsinki - Bucharest service from April 10 aboard Embraer RJs. Its Aero subsidiary discontinued 12x-weekly flights to Mariehamn for financial reasons. (FIN) will inaugurate nonstop service from Helsinki to Gdansk (Poland) on April 11th and operate 4 flights a week, on Mondays, Wednesdays, Fridays, & Saturdays, using an E170.
(FIN) Technical Services signed a three-year general terms maintenance agreement with (KLM) for performance of airframe checks on the Dutch carrier's 10 MD-11s.
(FIN) confirmed four E190 options, signing an order for the 100-seat airplanes worth more than €100 million/$131.4 million.
The jets will be delivered in 2008 to 2009. The carrier currently operates 10 76-seat E170s and now has 10 E190s on order, the first of which will be delivered next month.
"This order will complete our smallest airplane fleet. The Embraers have brought flexibility to our capacity management . . . We have been able to launch new destinations and increase frequencies in our European network . . . we can also add frequencies to off-peak hours," President & (CEO), Jukka Hienonen said.
(FIN) retired the last of its MD-80s over the summer. It also operates 20 A320 family airplanes.
E170 (00050, OH-LEO), delivery.
December 2006: Starting January 7th, Helsinki - Copenhagen, increased to 5/day, using E170s.
Finnair (FIN) launched commercial flights with its first E190. The carrier will receive a total of 10 100-seat E190s within the next three years. It currently operates 10 E170s.
E170-100ST (00150, OH-LEO), delivery. 1st E190 (OH-LKE) delivery - see photo.
January 2007: In 2006, Finnair (FIN) Group had 17.92 billion (RPK) passenger traffic (+7.1%); and had 8.79 million passengers (+3.2%).
(FIN) will report a negative operating result for 2006 "due to costs from structural arrangements and changes in fuel derivative market value," (CEO), Jukka Hienonen said. He cited a +€100 million/+$129.6 million year-over-year increase in fuel costs and more than >€15 million in one-off costs from its (FIN) Technical Division, "which had a hard year," he admitted. "The year 2006 will be an interim year in (FIN)'s result development," he said at an industry forum in Kirkkonummi. "The structural changes begun last year, give justified reason to believe that the result for 2007 will be significantly better than in the previous year."
(FIN) reported 2006 net loss of -Euro 13 million/-$16.8 million, a reversal from the 2005 profit of +€61.4 million, but after reporting a -61% year-over-year plunge in third-quarter earnings to +€10.3 million, it said it would cut approximately -670 jobs as part of its restructuring.
(FIN) will increase four-times-weekly service to Osaka Kansai (KIX) to daily, from the end of May, and Nagoya service will rise to four-times-weekly from three in mid-June. (FIN) said it will be Europe's third-largest operator to Japan, with 15 weekly flights this summer.
Hienonen said capacity to Asia will rise +30% in 2007, including a new five-times-weekly flight to Mumbai, and an increase in Delhi service from thrice-weekly to daily from May. Frequencies to Guangzhou and Hong Kong also will rise. Previously planned service to Kuala Lumpur will be operated as a codeshare. In addition, all long-haul flights from Helsinki will be nonstop. The airline will add two new A340-300s in May and June.
(FIN) appointed Anssi Komulainen, Senior VP Human Resources, Kristina Inkilainen, Senior VP Catering, and Sami Sarelius, VP & General Counsel.
The Finnish Ministry of Defense published a report proposing that (FIN) acquire A330 (MRTT) widebodies that the state could lease for troop transports and possible evacuations in crisis situations. (FIN) said it sets business fundamentals as the primary justification for all of its projects. "We are currently working on a modernization of our long-haul fleet, and we must consider very carefully how we will implement the huge investment that lies ahead. Irrespective of the company's ownership structure, (FIN) will act in future for the good of both its Finnish and other customers as each crisis situation demands, just as we have done so previously on our own initiative," President & CEO, Jukka Hienonen said in a statement. (FIN) representatives were consulted as experts in the working group that outlined the project.
February 2007: Reiterating the fact that it considers 2006 an "interim year" in its development, Finnair (FIN) reported a full-year net loss of -€13 million/-$16.8 million, a reversal from the +€62 million profit earned in 2005, as one-time expenses related to its €80 million restructuring program, high fuel prices and its loss-making Aviation Services division weighed on the bottom line.
President & (CEO), Jukka Hienonen said (FIN) expects "a significant improvement in the operational result in 2007, especially starting from the second quarter," as fuel stabilizes and it continues cutting costs.
Full-year revenues rose +5.1% to €2.01 billion against a +10.4% climb in expenses to €2.02 billion, resulting in a -€10.8 million operating loss that compares to an €81.9 million profit in 2005. (FIN) forecast the negative (EBIT) last month.
Traffic grew +7.1% to 17.92 billion (RPK)s, capacity was up +3.5% to 23.85 billion (ASK)s and load factor rose +2.5 points to 75.2% LF. Yield improved +7.5%, although the airline said fares were "depressed by aggressive price-driven marketing." Unit revenues climbed +1.4% against a +1.8% rise in (CASK), which fell -3.5% excluding fuel. It will take delivery of two new A340s in the second quarter and increase Asian capacity by +30%.
March 2007: Finnair (FIN) will launch daily Helsinki (HEL) - Osaka service at the end of May on MD-11s and add a fourth weekly A340 flight to Nagoya from mid-June. 5x-weekly (HEL) - Mumbai flights will start in June and 3x-weekly service to Delhi and four-times-weekly flights to Hong Kong will become daily in mid-May. A fourth weekly Guangzhou flight will be added next winter. (FIN) said its Bangkok - Singapore service and planned flights to Kuala Lumpur will be operated by codeshare partners.
(FIN) made the first firm commitment for the new A350 XWB powered by the Rolls-Royce (Trent XWB), signing a contract for 11 of the type along with a flexible mix of seven A330s and A340-300s. (FIN) originally had placed an order for nine A350s, but negotiated a compensation package with Airbus (EDS) last summer, following the delay and subsequent relaunch of the model as the XWB. A350 XWB deliveries will commence in 2014. (FIN) did not specify which version it ordered, the A350-800, A350-900 or A350-1000.
"Commonality with our A320 single-aisle fleet was one of the key drivers of our decision making," (FIN) (CEO), Jukka Hienonen said. "Seamless transition from the current long-haul fleet . . . is safeguarded by the entry into our fleet of the A340s and A330s." (FIN) intends to replace its seven MD-11s by 2010, when it expects to operate 15 long-haul airplanes. It has four previously ordered A340s scheduled to arrive by the end of 2008.
E190 (00066, OH-LKF) delivery.
April 2007: Finnair (FIN)'s fortunes are rising in the east, where a +40.6% increase in revenue from its Asian services was among several factors contributing to a +€9.3 million/+$12.6 million first-quarter profit, which reversed a -€4 million loss suffered in the year-ago period. "Demand is now strong both in Asian traffic and on European routes, and our market share in Europe-Asia traffic is growing," President & (CEO), Jukka Hienonen said. "Development of unit revenues in all types of traffic is positive, and unit costs are decreasing, so profitability is improving." Revenue rose +10% to €528.5 million, with the €148 million generated from Asian routes representing 43.4% of the total earned on European and domestic services, up +11.8 points from the first quarter of 2006. Revenue from scheduled passenger traffic, was up +10.9% to €391.2 million. Expenses climbed +6.1% to €521.5 million, lifting operating result to a +€13.7 million profit from a -€5.2 million loss. (FIN) flew 5 billion scheduled and charter (RPK)s during the quarter, up +11.2% year-over-year, against a +9.5% climb in capacity to 6.6 billion (ASK)s, lifting load factor +1.2 points to 75.8% LF. Scheduled traffic unit revenue dipped -1.6%, driven by the rising share of Asian routes that produce lower (RASK). "The company's financial performance in 2007 is expected to improve significantly compared to the previous year, owing to strongly growing demand, stabilized price levels as well as operational efficiencies," the (FIN) board said. The carrier lost -€13 million in 2006.
Norwegian Air Shuttle (NWG) signed a Memo of Understanding (MOU) with (FIN) for acquisition of the latter's Swedish subsidiary, FlyNordic (NOQ). The transaction will take place during the second quarter and is subject to regulatory clearance. (NOQ) will maintain its brand and continue to operate a low-fare service. "(NWG) has since the start in 2002 become Scandinavia's largest low-fare airline. This acquisition will strengthen our position in the Nordic region as well as in the European market. Stockholm will as a consequence, be the new base for our operations from Sweden," (NWG) (CEO), Bjorn Kjos said. (NWG) carried 5.1 million passengers last year and (NOQ) 1.2 million.
(FIN) President & (CEO), Jukka Hienonen said (NOQ) "has been gaining a significant momentum as [Stockholm] Arlanda's second-largest airline" and from (FIN)'s perspective has reached its potential. "We now want to proceed to the next phase. Through this cooperation, we will further strengthen our position in the traffic between Scandinavia and Asia," he noted. The deal includes cooperation between (FIN) and (NWG) that will involve linkage between (NWG)'s Scandinavian network and (FIN)'s routes to Asia.
(NWG) will acquire 100% of (NOQ), and (FIN) will receive ordinary shares and stock options in (NWG). (FIN)'s ownership in (NWG) initially will exceed >5%, but if it exercises all stock options, its share will increase to approximately 10%. The options can be exercised through 2008 at an average strike price of NOK115/$19.26.
(NOQ) and (NWG) have been cooperating on Stockholm - Oslo services since 2004.
May 2007: Starts Helsinki - Nuremberg, using EMB-190s. Starting June 17th, Helsinki - Mumbai, using A340-300s.
Finnair (FIN) said it will sell the last two MD-11ERs it owns to Aeroflot (ARO). The airplanes will be transferred in November 2008 and July 2009. Value of the sale is at least €30 million/$40.6 million. (FIN) operates seven MD-11ERs, five of which are under leasing agreements that expire by the end of 2010, when it plans to have retired all MD-11ERs and operate a long-haul fleet of A330s and A340s.
E190 (00079, OH-LKG), delivery.
June 2007: Finnair (FIN) and Finncomm Airlines signed a code share agreement under which (FIN) will place its code on Finncomm's service from Helsinki to Tallinn and eight domestic destinations. Privately held Finncomm carried 400,000 passengers last year.
(FIN) Cargo said that it is reorganizing its operations by separating its cargo terminal and cargo company business functions from each other as part of an effort to increase capacity at Helsinki Vantaa. "We need a great deal more space for the needs of our growing Asian traffic," Managing Director Cargo, Antero Lahtinen said. "Cargo's local terminal operations and, on the other hand, the global airfreight operations and competition environment differ from each other greatly."
(FIN) President & CEO, Jukka Hienonen has concluded that the airline's Asian strategy has "paid off." He said at the (IATA) (ITA) Annual General Meeting (AGM) in Vancouver, that 2007 Asian traffic has grown +30% year-over-year, and is expected to maintain that rate through year end. Last month, 70% of passengers inbound from Asia connected on (FIN)'s European network, he added. He said the airline is considering opening a fifth Chinese destination and is targeting South Korean service as well. Having ceded its Singapore flights to codeshare partners, it will focus principally on China, Japan and India, although it continues to fly to Bangkok. A third Indian city may be added if services to Mumbai and Delhi are successful. "In terms of frequencies, (FIN) is now Europe's third-biggest carrier to Asia, and for Oneworld (ONW), we are the second-biggest partner in India," he said.
(FIN) increased Helsinki - St Petersburg frequencies to 20-times-weekly, thanks to the award of three additional flights covered by a codeshare agreement with Rossiya (SDM). It also flies daily to Moscow Sheremetyevo in cooperation with Aeroflot (ARO). (FIN) CEO, Jukka Hienonen recently said that there are 13 Russian cities with more than >1 million people that (FIN) would like to serve, if it can secure permission. "Of course we can't fly to all of them, and it still isn't easy for us to get more traffic rights into Russia," he said.
(FIN) will launch five-times-weekly Helsinki - Seoul Incheon service in June 2008 aboard A340-300s. It will be the airline's 11th Asian destination.
CHAMP Cargosystems said 28 "of the world's leading cargo carriers" are switching over to the new Web-enabled and Java-based version of ULD Manager. Among them are Air China (BEJ), (FIN), Icelandair (ICE), and Saudi Arabian Airlines (SVA).
(FIN) took delivery of its first new 269-seat A340-313E, the first of three ordered in December 2005. The second (CFM56-5C4)-powered A340 will arrive this month. The airplanes will operate on the carrier's Helsinki - Tokyo Narita, Nagoya Chubu and Shanghai beginning next month.
A340-313E (844, OH-LQC), delivery. E190 (00086, OH-LKH), delivery.
July 2006: Finnair (FIN) announced that it has entered into a "final and binding sale and purchase agreement" covering the sale of FlyNordic (NOQ) to Norwegian Air Shuttle (NWG). The parties announced a Memo of Understanding (MOU) in April. The Norwegian Competition Authority still must approve the transaction, (FIN) said.
Oneworld (ONW) partners American Airlines (AAL), Iberia (IBE), (FIN), Malev Hungarian Airlines (HGA), and Royal Jordanian (RJA) filed a request for antitrust immunity with the USA Department of Transportation (DOT), effective March 30, 2008, the day the USA-(EU) "open skies" agreement becomes active. The five carriers said they wish to cooperate on codesharing, loyalty programs, route and schedule planning, advertising and marketing, pricing and yield management, revenue allocation, ground handling, cargo, Information Technology (IT) and distribution, and other areas. "We believe that an alliance with antitrust immunity is of vital strategic importance and will help us remain competitive with other transatlantic alliances, that already have such immunity," (AAL) Senior VP Planning, Henry Joyner said. Six SkyTeam (SKT) carriers filed a similar request last month.
(FIN) announced the sale of four 68-seat ATR72s operated by its Aero subsidiary to ATR Leasing. (FIN) said the profit of approximately +€5.5 million/+$7.6 million will be spread between the second quarter (around €4.5 million) and the third (more than >€1 million). Aero will continue to operate three ATR72s primarily on routes from Helsinki to Tallinn, Tampere and Turku.
August 2007: Finnair (FIN) is "heading in the right direction," according to (CEO), Jukka Hienonen, as the carrier yesterday reported a second-quarter profit of +€25.8 million/+$35.5 million, that compares to +€0.4 million in earnings during the year-ago period. It continues to expect a full-year operating result ((EBIT) excluding capital gains and changes in the fair value of derivatives) of more than >€70 million. It reported a +€11.2 million profit on a similar basis last year. "Unit costs have clearly decreased due to efficiency measures . . . and the changes we have made to our long-haul network have proved to be successful," he said, while warning that "the ongoing fleet renewal program requires us to further improve the current profitability level and operational performance." (FIN) has eight A330/340s plus four options, 11 A350 XWBs and six E190s still on order. Seven MD-11s have been sold to Aeroflot (ARO) Cargo and will be transferred in 2008 to 2009. It also warned that six of its seven labor agreements are set to expire at the end of the current quarter.
Second-quarter revenue rose +8.8% to €538.1 million, and while expenses climbed just +3.1% to €512.2 million, lifting operating income to +€37.1 million from +€5.5 million in the year-ago period. Traffic in (RPK)s fell -13.9% against a +15.3 rise in capacity, that dropped load factor -0.9 point to 74.6% LF. Unit revenue fell -0.3%, but yield per passenger increased +9.8%. It said growth in demand is "expected to continue strongly" on both European and Asian routes.
Six month profit of +€35.1 million compares to a -€3.6 million loss in the first half of 2006.
(FIN) Technical Services and Lufthansa Cargo (LUB) signed a maintenance agreement covering airframe Maintenance Repair & Overhaul (MRO) of two MD-11F freighters. The deal includes an option for two additional airframe maintenance visits in 2008 to 2009.
(FIN) Technical Services announced an agreement with World Airways (WLD) covering airframe maintenance on two of World (WLD)'s three DC-10-30s.
September 2007: Finnair (FIN) Group ground handling subsidiary Northport Oy agreed to sell its Finnhandling AB and Northport Norway AS units, as well as Arlanda Airport lounge and ticket sales services, to Menzies Aviation. The transaction is scheduled to close on September 30. Financial details were not disclosed. Menzies will provide ground-handling services to (FIN) in Stockholm and Oslo.
(ARINC) announced that (FIN) is deploying its seatback (SMS)/e-mail messaging service on its newest A340s used on Asian routes. The service is operational on two A340s, which were delivered in May and June, and (ARINC) will deploy it on additional A340s after delivery in 2008. The seatback messaging solution "is a joint initiative of (ARINC) and Panasonic, which runs on Panasonic's 2000e, 3000, 3000i and eX2" In-Flight Entertainment (IFE) platforms, according to (ARINC).
October 2007: Finnair (FIN) said it has approved a new long-term plan that focuses on developing Europe - Asia services, with a future goal of also boosting North America - Asia service by turning Helsinki Vantaa into a significant connecting hub. "We will take advantage of Helsinki's geographical location even more extensively," President & (CEO), Jukka Hienonen said. "In years to come, the airspace and terminal facilities of large European airports are likely to become increasingly congested while Helsinki-Vantaa Airport has plenty of room for construction and possibilities for development."
(FIN) said total annual passengers carried are expected to rise from 9 million currently, to more than >20 million by 2017. "If the demand in air traffic continues to increase, within 10 years, we expect to carry well over 3 million passengers annually in our intercontinental traffic between Europe, Asia and North America," Hienonen said. Focus in the near term will be on Europe - Asia growth, he stated, adding that the most "interesting future cooperation candidates are to be found among the Asian Oneworld (ONW) airline partners."
(FIN) said the sale of its FlyNordic (NOQ) subsidiary to Norwegian (NWG) will result in a +€14.1 million/+$20.1 million net gain in its third-quarter operating profit, resulting from a +€18.6 million capital gain recognized for the summer transaction, an additional +€3 million in depreciation on six (NOQ) MD-80s owned by (FIN) Aircraft Finance and a €1.5 million amortization.
(FIN) named MD-11 Fleet Captain, Veikko Sievanen as Senior VP Flight Operations division.
(FIN) selected (GE) (CF6-80E1)s to power seven A330-300s. The engines will be the first to incorporate the new HPT upgrade, that is part of the "Tech (CF6)" program. Engine delivery will begin in March 2009. (GE) valued the deal at more than >$140 million.
E190 (0117, OH-LKI), delivery.
November 2007: Finnair (FIN) Group 1st 9 months = 15.17 billion (RPK)s (+14.3%) traffic; 393.4 million (FTK)s (+6.9%) freight traffic; 6.7 million passengers (+4%).
(FIN) credited continuing growth on its Asian routes and a year-old efficiency program with boosting third-quarter profit to +Euro39.6 million/+$57.2 million, a nearly fourfold increase from the +Euro10.3 million posted in the year-ago period. (FIN) said it now ranks fourth among European carriers in Asian capacity. "Thanks to (FIN)'s [Euro80 million] efficiency program launched last year, we are in a better result-making condition, which is reflected in the figures for the third quarter and the whole year," President & CEO, Jukka Hienonen said, adding that the initiative's "full impact" will be evident next year. "(FIN)'s objective is continued growth to Asian destinations," he continued. "(FIN)'s vision is to develop into the most desired intercontinental airline of the northern hemisphere." Third-quarter revenue rose +5.8% to Euro545.2 million, as demand grew +10.8% year-over-year and demand on its Asian routes climbed +31.5%. Operating profit soared +74.2% to +Euro39.2 million, boosted in part by a +Euro14 million gain related to the sale of its FlyNordic (NOQ) subsidiary to Norwegian (NWG). Revenue derived from scheduled passenger traffic was up +7.6% to Euro432.6 million, with the segment's operating result lifting +41.9% to Euro28.8 million. (FIN) added two A340s in June, which helped boost third-quarter capacity, although it said unit revenue (RTKs) fell -5.2% to 68.9 cents, "due to a change of traffic structure" and new routes and capacity increases in both Europe and Asia sold through "more aggressive pricing." Cost per (ATK) dropped -7.7% to 40.9 cents, however. Traffic in (RPK)s rose +15.6% year-over-year against a +15.4% increase in capacity, leaving load factor static at 76.7% LF. Passenger unit revenue declined -8.1%, as European revenue decreased and the relative share of long-haul traffic rose.
(FIN)'s nine-month profit of +Euro74.7 million compares to a +Euro6.7 million surplus in the year-ago period. It said its operational result for 2007 is expected to exceed >Euro70 million, following a profitable fourth quarter.
(FIN) said its fourth quarter has "developed more favorably than anticipated" and that it is raising its expected full-year operating profit. The carrier now expects a result in excess of >+€90 million/+$132.5 million compared to the +€70 million-plus forecast, when it announced its third-quarter results. It expects the fourth quarter "to be clearly profitable."
(FIN) Group ground handling subsidiary, Northport Oy signed an agreement to sell the entire share capital of its Swedish and Norwegian subsidiaries, Finnhandling AB and Northport Norway AS, to Menzies Aviation. The sale will create a slightly more than >€5 million one-time boost to (FIN)'s fourth-quarter results.
The (FIN) board approved a share offering worth €248.5 million/$365.9 million, with the subscription period beginning November 29 and ending the afternoon of December 17. Current shareholders will have a preemptive right to subscribe in proportion to their holdings. The company will issue 39.4 million shares at €6.30 per share. Danske Markets and UBS Investment Bank are joint global coordinators and book runners, and Aventum Partners is financial adviser. (FIN) said it will use the proceeds to fund airplane acquisition and "related investment that enable the realization of the company's growth strategy." The FL Group, which holds around 24% of (FIN), said it will participate in the offering. The government holds 55.78%.
EMB-190 (0127, OH-LKK), delivery.
December 2007: Finnair (FIN) said the FL Group (AID)/(ICE), the second-largest shareholder in the carrier behind the Finnish government, reduced its stake to 12.7% from 24.4% by selling 15 million shares. The Icelandic investor said the move "is in line with FL Group (AID)/(ICE)'s strategy to lower exposure to the aviation sector" and would result in a -ISK2.8 billion/-$44.4 million loss. FL Group (AID)/(ICE) said it remains the second-largest shareholder and "continues to support (FIN)'s ambitious growth strategy."
(FIN) said approximately 5,300 investors participated in the €248.5 million/$357.9 million share offering, that concluded December 17, and 99.6% of the 39.2 million shares were subscribed for. It said the joint global coordinators of the sale will "seek to procure purchasers" for the remaining shares "as soon as practicable" and that it soon will announce the final results of the issue.
(FIN) placed an order with Airbus (EDS) for a seventh A330-300. The airline currently operates 11 A319s, 12 A320s, six A321s, and three A340s, and in addition to the seven A330-300s, has four A340-300s and 11 A350 XWBs on order.
January 2008: 2007 statistics: net income of $150.09 million (-$19.11 million): 20.3 billion (RPK)s passenger traffic +14.6%; +14% capacity (ASK)s; +.4 load factor for 75.5% LF. SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "FIN-2007-STATS."
Finnair (FIN) Technical Services (FTS) reached an eight-year, €200 million/$291.7 million deal with Aeroflot (ARO) Cargo to provide airframe, engine and component, Maintenance Repair & Overhaul (MRO) services for its MD-11s. (ARO) Cargo is (FTS)'s largest customer outside the (FIN) Group. Approximately one-quarter of (FTS)'s annual turnover comes from third parties. (FIN) has sold its two owned MD-11s to (ARO) Cargo, which will operate six of the type next year.
(FIN) shut down Estonian subsidiary, Aero Airlines as part of its strategy to concentrate on its mainline business and development of its Asian route network. The closure also ends its propeller airplane era, as the ATR72s owned by (FIN) Aircraft Finance and operated by Aero have been sold. (FIN) took control of Aero in 2001, hoping to develop a cost-effective model for a regional operator, while increasing its market share in the Baltic. It reported turnover of approximately €50 million/$73.7 million last year and a slightly positive segment result. Traffic between Helsinki and Tallinn will be handled by Finncomm Airlines with its own ATRs. Flights will continue to have (FIN) numbers and schedules will be unchanged.
(FIN) named Alliance Director, Kati Ihamaki as VP Sustainable Development.
February 2008: Finnair (FIN) reported a net profit of +€101.6 million/+$150.5 million for 2007, turned around from a net loss of -€13.6 million in 2006, on a +9.6% lift in revenue to €2.18 billion.
President & (CEO), Jukka Hienonen said one-time restructuring costs were "evident" in the 2006 results, but changes made to the operating model that year "laid a solid foundation" for the strong profit earned in 2007. (FIN)'s 2007 results also were helped by the sale of Swedish subsidiary FlyNordic (NOQ). The carrier now has a "strong cash flow" that will enable it to acquire new airplanes, he said. It plans to replace seven MD-11s with A330s over the next three years, and two A340s also will enter the fleet this year.
Operating profit for 2007 was +€96.6 million, a more-than-eightfold increase over +€11.2 million in 2006. Traffic rose +16.2% to +20.3 billion (RPK)s, on a +15.8% increase in capacity to 26.88 billion (ASK)s, producing a load factor of 75.5% LF, up +0.2 point. Looking ahead, Hienonen said fuel costs "will remain high, and we will adjust our competitiveness accordingly." He added, "(FIN)'s demand situation is currently good . . . The solid result shows that (FIN) is in good shape, but further guidance in the present uncertain world economy would be too adventurous."
(FIN) Technical Services will perform tube strip modifications on four Martinair (MTH) MD-11s starting in April.
(FIN) announced the conversion of one of its three A330 options into a firm order for delivery in spring 2010. "Asian traffic will continue to grow in the long run and we want to prepare for this by increasing our capacity," Executive VP Scheduled Passenger Traffic, Henrik Arle said. (FIN) currently operates three A340s and seven MD-11s, which it will replace with A330s over the next three years.
Oneworld (ONW) airlines will begin bringing all operations together at Beijing International in the airport's vast new passenger terminal. British Airways (BAB) and Qantas (QAN) will move on February 29, while the alliance's other members serving Beijing (Cathay Pacific (CAT), Dragonair (DRG), (FIN), and Japan Airlines (JAL)) will transfer into Terminal 3 on March 26. The six (ONW) carriers will use check-in desks in the terminal's Area C.
E190 (00153, OH-LKL), delivery.
March 2008: Finnair (FIN) flew 1.77 billion (RPK)s passenger traffic in February, a +17.3% increase over the year-ago month. Capacity rose +20.3% to 2.37 billion (ASK)s, and load factor fell -2 points to 74.8% LF.
Kale Consultants was contracted by (FIN) Cargo to provide airmail cargo revenue accounting services, including scans, document processing and invoice production. The work will take place at Kale's MPS center in Mumbai.
Beijing Capital International Airport's new $3 billion-plus Terminal 3 opened as Shandong Airlines (SHG) (flight SC1151 arrived from Jinan at 8:39 am. UK architect, Norman Foster claimed it is the largest covered structure ever built - - 3.25 km long and 1.3 million sq m of floor space. Construction began in March 2004. The airport said the three-concourse facility welcomed Shandong (SHG), Sichuan Airlines (SIC), Qantas (QAN), Qatar Airways (QTA), British Airways (BAB), and El Al (ELA). A second move is scheduled for March 26 when Air China (BEJ), Shanghai Airlines (SHA), (SAS), Austrian Airlines (AUL), Lufthansa (DLH), Asiana Airlines (AAR), Air Canada (ACN), United Airlines (UAL), (ANA), Thai Airways (TII), Singapore Airlines (SIA), Finnair (FIN), Cathay Pacific Airways (CAT), Japan Airlines (JAL), Dragonair (DRG), Turkish Airlines (THY), Emirates (EAD), Air Macau (MCU), S7 Airlines (SBR), and EgyptAir (EGP) will transfer to the new building. "Reuters" reported that airport capacity will be boosted to 76 million per year from the 52 million it served in 2007. The baggage system can handle 19,800 pieces per hour, it said.
(FIN) placed an order for three additional E190s for delivery in 2010 to 2011. "Through the order we have ensured the availability of capacity under present conditions. The airline manufacturers' order books are full for years ahead and we forecast that our European traffic will grow in the wake of Asian traffic," Executive VP (FIN) Scheduled Passenger Traffic, Henrik Arle said. It took delivery of its seventh E190 last week, and will take one more this year plus two in 2009. It also has seven E170s on order.
E190-100 IGW (0160, OH-LKM), delivery.
April 2008: Finnair (FIN) reported a first-quarter profit of +€5.5 million/+$8.6 million, down -40.9% from the +€9.9 million earned in the year-ago period, and warned that "difficult terrain" is ahead for the remainder of the year owing to high fuel costs. President & CEO, Jukka Hienonen said the company's "balance sheet position is strong and our business is fundamentally in good shape," but added that "the high price of fuel and the uncertain outlook for the world economy raise question marks about the profit outlook for airlines." While passenger and cargo demand are "reasonably good," (FIN) is "not immune to what is happening around us," he said, noting that "expensive jet fuel has choked the life out of several airlines on different continents."
First-quarter operating revenue rose +8.8% to €582.5 million, while costs increased +9.4% to €570.4 million, including a +30.7% jump in fuel expense to €134.9 million, producing an operating profit of +€12.1 million, down -11.7% from +€13.7 million last year.
Flight operations unit revenue (RTKs) fell -4.9% to 69.2 euro cents. The airline said traffic increased +12.9% (RPK)s in the quarter, on a +13.5% lift in capacity, without providing (RPK) and (ASK) figures. It said demand will "continue to moderate in the early part of the year" and operating profit for the first half of the year is expected to be flat.
The FL Group has sold its entire stake in (FIN), the airline announced. It reduced its 24.4% stake to 12.7% in December and sold all of its remaining 16.3 million shares. Neither company revealed the buyer[s], but FL said the transaction was valued at ISK13.6 billion/$174.4 million. FL now holds no shares in listed airlines.
(FIN) said that its operating result for the first half of 2008 would "remain at last year's level, despite the rise in fuel costs" thanks to "the high fuel price hedging rate and the weak [USA] dollar" as well as growing demand. It reported (EBIT) of €37.1 million/$58.6 million in the first six months of 2007. It also announced the delivery of its eighth EMB-190. It flies 10 EMB-170s as well.
(FIN) and Icelandair (ICE) signed a codeshare agreement effective next month. (FIN) will place its code on (ICE)'s Keflavik - Helsinki Vantaa (HEL) service, while the latter will place its code on (FIN)'s (HEL) - Warsaw.
Allegiant Air (WJE) parent, Allegiant Travel Company announced the purchase from (FIN) of six MD-80s and three spare engines, that currently are on lease to FlyNordic (NOQ), which was sold by (FIN) to Norwegian (NWG) last year. "Our strong financial condition permits us to purchase airplanes for cash," Allegiant (WJE) Chairman & CEO, Maurice Gallagher Jr said. The airline claimed to be one of only two in the USA to carry more cash than debt as of December 31.
Four of the airplanes will enter service for (WJE) in the first half of 2009 and the remaining two in the first quarter of 2010. It expects to receive around $5.5 million in lease revenue from the planes, while they continue to operate for FlyNordic (NOQ), but expects to incur a similar amount in maintenance obligations. Finnair (FIN) said the transaction would not have any significant impact on its financial performance.
May 2008: Finnair (FIN) flew 1.55 billion (RPK)s in April, up +9.6% from the year-ago month. Capacity rose +18% to 2.21 billion (ASK)s, dropping load factor -5.4 points to 69.8% LF.
(FIN) now expects its operating result for both the half and full year to "fall short of last year's levels" as "rapidly rising oil prices and a sharp fall in passenger load factors" are "weakening" its "profit-making capacity." Its 2007 operating profit was +€96.6 million/+$151.7 million. It said its full-year fuel bill will exceed €600 million, up more than >36% year-over-year, and more than 25% of estimated 2008 revenue. April load factor was down -6 points and is expected to "continue to fall" this month. "We are now planning to reduce capacity, particularly in Europe. Due to the short advance booking horizon, it is difficult to make forecasts far into the future," President & (CEO), Jukka Hienonen said.
(FIN) will launch flights from Helsinki to Incheon (five-times-weekly from June 2, aboard A340-300s) and Yekaterinburg (thrice-weekly from early September, aboard A319s).
A340-313E (921, OH-LQD), delivery.
June 2008: Finnair (FIN) (CEO), Jukka Hienonen is preparing the airline for what he considers to be an impending crisis in commercial aviation. "We are already looking at our network and we certainly will cut capacity in Europe and also look to some of our long-haul routes," he said at the (IATA) (ITA) Annual General Meeting (AGM) in Istanbul. If the outlook remains gloomy, he said, "we will have to take additional measures."
(FIN) launched its new Helsinki - Incheon (Korea) route as part of its continuing strategy to link the Finnish capital with Asia. But lately it has seen some softening in that market. "Right now, looking at the short term, routes to China are very challenging," Hienonen said, adding that Austrian Airlines (AUL) remains focused on building its Asian network.
(FIN) announced that it will begin negotiations with personnel regarding cuts in production that it anticipates will affect approximately 500 employees through layoffs and terminations, an adjustment in the number of temporary staff and reducing workers to part-time status. It said the "exact nature of the cuts will become apparent during the negotiations." Senior VP Human Resources, Anssi Komulainen said, "To ensure the company's growth strategy, we need additional cuts of at least -€50 million/-$77.5 million per year and we have begun discussions with our personnel to map out savings targets." The airline admitted that "demand has decreased, and this decrease has accelerated at such a rate in the past weeks that together with the price development of fuel, (FIN)'s result-making capability has significantly weakened."
(FIN) is preparing to reduce capacity by about -2% initially due to the soaring cost of fuel and slowing demand, and also may cut jobs, (CEO), Jukka Hienonen told "Helsingin Sanomat." "If we have to make a reduction that equals the level of average overcapacity in Europe, 7% to 10%, we will face staff cuts," he said. (FIN) held talks with staff regarding possible capacity reductions. Hienonen previously had said that he is preparing the airline for what he considers to be an impending crisis in commercial aviation. It has seen some softening on its strategic long-haul routes to Asia. "The market cannot currently sustain our growth factor. We can no longer continue with the growth strategy we've had up to now," Hienonen told the paper. Last month, passenger numbers fell -2.4% year-over-year, as traffic climbed +6.3% to 1.5 billion (RPK)s against a +18.1% surge in capacity to 2.31 billion (ASK)s. Load factor dropped -7.3 points to 65% LF.
(FIN) reached a tentative agreement with pilots (FC) that will run through November. It lifts an overtime ban, provides for a +3.9% pay raise and offers the airline "structural changes which improve efficiency." Negotiations on a longer-team deal start this fall.
July 2008: Finnair (FIN) is investigating importing jet fuel to Finland as prices are increasing and competition among fuel providers is limited. It expects this year's fuel bill to top €600 million/$956.3 million.
August 2008: Finnair (FIN) flew 1.96 billion (RPK)s traffic in July, up +6.5% year-over-year, against a +4.8% rise in capacity to 2.42 billion (ASK)s. Load factor rose +1.3 points to 81% LF.
(FIN) remained profitable in the second quarter, reporting +€13.9 million/+$20.9 million in net earnings that represented a -46.1% fall from the +€25.8 million/+$40 million posted in the year-ago period, but warned that second-half (EBIT) "may be negative" as the industry faces "a market failure caused by an overcapacity in relation to demand."
Second-quarter revenue climbed +1.5% year-over-year to €546.1 million and expenses rose +4.3% to €534.2 million as fuel costs jumped +37.6% to €143.5 million. Operating profit plunged +44.2% to +€20.7 million from the +€37.1 million earned in the second quarter of 2007. Finnair (FIN) realized a +€12.6 million gain related to derivatives affected by rising oil prices and a +€2.9 million capital gain from the sale of two ATR72s and six MD-80s operated by FlyNordic (NOQ). "Despite its good fundamentals, (FIN) has been unable to insulate itself from sector developments, indeed the second quarter was clearly weaker than the previous year," President & CEO, Jukka Hienonen said, adding that the carrier has begun negotiations with employees in an effort to generate savings. "Redundancies will be a last resort," he promised. "Already planned and possible future production cuts" will affect approximately 500 employees, the carrier said.
Traffic climbed just +0.4% (RPK)s against a +7.9% rise in (ASK)s, dropping load factor -5.1 points to 69.5% LF. Unit revenue was down -0.7% year-over-year, and yield increased +7.8%. Second-half scheduled capacity is expected to climb +5% year-over-year.
Half-year profit of +€19.4 million was down -44.7% from +€35.1 million in the first semester of 2007.
Oneworld (ONW) partners, American Airlines (AAL), British Airways (BAB), Iberia (IBE), (FIN), and Royal Jordanian (RJA) confirmed that they filed for worldwide antitrust immunity (ATI) from the USA Department of Transportation and notified the appropriate regulatory authorities in the European Union (EU). The (ATI) application follows the signing of a "joint business agreement" among (AAL), (BAB), and (IBE), under which the trio will cooperate commercially on flights between North America and the (EU), Switzerland and Norway. Their combined network will serve 443 destinations in 106 countries with 6,200 daily departures. The carriers stressed they will share revenue but not profit and will continue to operate as separate legal entities. However, (BAB) and (IBE) are discussing a potential merger. "We believe our proposed cooperation is an important step towards ensuring that we can compete effectively with rival alliances and manage through the challenges of record fuel prices and growing economic concerns," (AAL) parent, AMR Chairman & CEO, Gerard Arpey said. At present, Oneworld (ONW) is the only alliance not operating with some level of transatlantic (ATI), whereas six SkyTeam (STM) airlines and nine Star Alliance (SAL) carriers enjoy such immunity. "This has put Oneworld (ONW) at a considerable disadvantage," (ONW) Managing Partner, John McCulloch claimed. (BAB) and (AAL) have applied twice for transatlantic (ATI), in 1997 and 2001, but believe they now have a greater chance of success because the industry and competitive landscape have changed so fundamentally. "We are applying for (EU)-USA antitrust immunity in a changed regulatory world, where London Heathrow is open to any USA or (EU) airline that wants to fly to the USA and where rival alliances have immunity," (BAB) CEO, Willie Walsh stressed. "It will increase competition as the three global airline alliances will play under the same rules. We are taking a very important step towards consolidation , which is necessary in today's aviation industry," (IBE) Chairman & (CEO), Fernando Conte said.
Virgin Atlantic Airways (VAA), which earlier stepped up its lobbying against the anticipated application of its main competitors at (LHR), described the deal as a "monster monopoly," claiming it would "be bad for passengers, bad for competition, and bad for the UK and USA aviation industry."
(BAB) noted coolly that there "is nothing to stop Virgin (VAA) applying for (ATI) if it found a suitable partner" and "nothing to stop Virgin (VAA) increasing competition on any transatlantic route if it thinks consumers would welcome it."
(FIN) is the first European Oneworld (ONW) member to operate airplanes with alliance livery, following Japan Airlines (JAL) and LAN Argentina (LNR). One A340 and one A319 feature the Oneworld (ONW) script along the front of the fuselage with the tails of the group's member carriers toward the rear.
(FIN) will launch thrice-weekly, Helsinki - Yekaterinburg on September 2 aboard an A319. Ural Airlines (URL) will codeshare. (FIN) believes China travel will pick up after the Olympics. It could be in trouble if it doesn't.
September 2008: Finnair (FIN), which has a tendency to announce new routes long before they start, will launch Helsinki - Istanbul A319 service in March 2009. The flights will only operate twice a week, but the company says frequencies may grow if demand patterns merit.
(FIN) now flies to Yekaterinburg, its third Russian destination.
(FIN), still making money and holding onto its independence, is hoping relaxation of Chinese visa restrictions later this year may provide some help.
(FIN) said that it has given its employee groups two weeks to examine three possible cost-saving alternatives. A spokesperson told "Reuters" that one option is a salary cut of -5% across the company; the second, a 15-month salary freeze, and the third, -400 layoffs. Employees would get some money back, if the airline meets certain financial targets, although it said it may report an operating loss in the second half.
(FIN) and Finncomm Airlines entered into a 50/50 joint venture to establish Finnish Aircraft Maintenance (FAM), which will specialize in ATR turboprops and EMB-145s. (FAM) will serve domestic and international customers at Helsinki Vantaa, pending approval of competition authorities. A new maintenance hangar will open by next spring. Finncomm currently operates nine ATR72-500s and will grow its fleet to 16 by 2011.
October 2008: Finnair (FIN) flew 1.85 billion (RPK)s traffic in September, up +7.1% year-over-year, against a +3.1% rise in (ASK)s capacity to 2.38 billion. Load factor increased +2.9 points to 77.9% LF.
November 2008: Admitting that "conditions for profitable business are increasingly marginal," Finnair (FIN) reported a -€17.3 million third-quarter loss, reversed from a +€39.6 million profit in the three-month period ended September 30, 2007. "What is usually our best quarter of the year, fell far short of expectations," President & CEO, Jukka Hienonen said, citing high fuel prices and the fact that "airplanes are increasingly filled with leisure passengers who pay less for their tickets."
Third-quarter turnover rose +2.7% year-over-year to €559.7 million, but operating result swung to a -€24.8 million loss from a +€59.9 million profit in the year-ago period as a -€26.1 million fall in the value of (FIN)'s hedges dragged its (EBIT) into the red. It said (RPK)s lifted +7.6% and load factor was up +2.5 points to 79.8% LF. "A weakening of the average ticket prices and a strengthening of the USA dollar, have diluted the benefit from the recent fall in fuel prices," it said.
The carrier operated 66 airplanes at quarter's, end but removed one MD-11 from the fleet last month. It will add five new A330-300s and two EMB-190s next year, and withdraw three MD-11s and three EMB-170s.
Looking ahead, it plans to grow fourth-quarter (RPK)s by about +6% year-over-year, but will reduce 2009 capacity by -1% to -2%, which it said "will have impact on personnel." It called its Asian strategy its "lifeblood in the coming years" and said it will continue to seek up to €25 million in savings through -500 job cuts and layoffs following failed salary reduction negotiations with unions. It said unit revenue will fall in "the coming months" and its fourth-quarter (EBIT) is expected to be negative.
Nine-month profit of +€2.1 million compared to a +€74.7 million profit in the first nine months of 2007. Operating profit sank to +€8 million from +€110.7 million on a +4.4% rise in revenue to +€1.68 billion.
The Finnair Group 1st 9 months = 16.22 billion (RPK)s traffic (+10.4%); 448 million (FTK)s freight traffic (+13.9%); 6.25 million passengers (+1.8).
December 2008: Finnair (FIN) flew 1.8 billion (RPK)s traffic in November, up +12.3% year-over-year, against an +8.2% rise in capacity to 2.42 billion (ASK)s. Load factor rose +2.8 points to 74.1% LF.
(FIN) said the one-week closure of Bangkok Suvarnabhumi will cost the carrier approximately -€4 million/-$5.1 million, with "consequential effects . . . expected to increase the final cost total further."
(FIN) will add a ninth weekly, Helsinki - Brussels flight, starting January 12. An extra flight will be aboard an EMB-170. A320s normally are used on the route.
January 2009: Finnair (FIN) flew 1.92 billion (RPK)s traffic in December, up +7.8% from the year-ago month. Capacity rose +4.5% to 2.47 billion (ASK)s, lifting load factor +2.4 points to 77.6% LF.
(FIN) (CEO), Jukka Hienonen told the daily "Iltalehti" that he is hoping a -9% reduction in the carrier's route network will allow it to remain stable during the current market downturn but that a worst-case scenario could result in its cutting up to one-third of its approximately 100 routes. Several hundred employees already have been laid off and another 300 will be downgraded to part-time status in the first few months of this year. (FIN) plans to take delivery of five A330-200s and two E190s in 2009 but continues to search for more than >€400 million/$550.1 million in required financing, Hienonen said.
Later, (FIN) said it will lay off -120 employees as part of an effort to save -€25 million/-$33 million in personnel expenses. It said it will achieve the remainder of the targeted savings through furloughs and the scheduled upcoming conclusion of 400 fixed-term contracts. Senior VP Human Resources, Anssi Komulainen said the layoffs will be "widely applied" and "arranged so as to minimize disruption to the flight program." (FIN) said it offered employee representatives a -5% temporary pay cut, the cancellation of holiday bonuses and salary freezes but was rejected. The furloughs will last 2 to 3 weeks and affect more than >3,000 staff. In addition, (FIN) will cut -20 jobs in its cargo division and furlough an additional -40 employees "due to a sharp fall in cargo demand." Furloughs will affect a further 300 this year.
(FIN) pilots (FC) represented by the Finnish Airline Pilots Association will stop working overtime hours and have called strikes for February 11, 13, 16, 18 and 20. (FIN) and the union reached a six-month labor agreement last summer providing for a one-time +3.9% wage increase on top of the annual +4.5% bump. (FIN) said pilots (FC) now want an additional +4% raise and changes in pension arrangements, fleet deployment policy and rest days that (FIN) said would boost costs by an additional +7% per year. It said its 800 pilots (FC) constitute 8% of the company's workers and 26% of its employment costs.
(FIN) will launch twice-weekly, Helsinki - Istanbul Ataturk flights on March 3, doubling to four-times-weekly on March 30. The route will be operated with both A319s and EMB-190s.
(FIN) named (CFO), Lasse Heinonen as Executive VP & Deputy (CEO). He will continue as (CFO).
February 2009: Finnair (FIN) flew 1.96 billion (RPK)s traffic in January, a +6.3% increase from the year-ago month. Capacity rose +0.3% to 2.52 billion (ASK)s and load factor was up +4.4 points to 77.8% LF.
Claiming that its "situation as this relegation battle begins is stronger than many others," (FIN) reported a -€42 million/-$54.4 million loss for 2008 that compared to a +€101.6 million profit in 2007. "Not all airlines will survive. The industry will experience an unprecedented thinning out," President & (CEO), Jukka Hienonen said. But he claimed that (FIN)'s "balance sheet and cash position are strong and its strategy is working." He warned that it is "absolutely necessary to cut our cost structure permanently to a competitive level" and that (FIN) is "seeking increasing flexibility in our expense structure" to handle fluctuating demand.
Full-year revenue rose just +3.8% year-over-year to €2.26 billion as "attempts to increase prices during the spring had a strongly adverse effect" on load factors and falling business travel "rapidly undermined the average yield." Expenses climbed +11.9% to €2.34 billion and the operating result reversed to a -€52.1 million loss from a +€141.5 million profit in 2007.
(FIN) said its €50 million efficiency program launched last spring "has proceeded according to plan" and that it maintains plans to furlough some 3,000 employees this year for 2 to 3 weeks each. It said that "weakening profitability and capacity cuts require the initiation of a new program of corresponding magnitude as soon as possible," without elaborating. It still intends to take delivery of five A330s this year, which will replace MD-11s.
(FIN)'s passenger numbers dropped -4.4% to 8.3 million on a +7.8% rise in (RPK)s traffic to 21.9 billion. Capacity grew +8.3% to 29.1 billion (ASK)s, lowering load factor -0.3 point to 75.2% LF. Unit revenue from flight operations dropped -3.5%, while costs remained level.
A fourth-quarter net loss of -€44.1 million compared to a +€26.9 million profit in the final three months of 2007. The operating result swung to a -€12.5 million loss from a +€24.4 million profit on a +2% climb in revenue to €580.3 million.
(FIN) is holding fast to its Asian strategy going forward and said its "long-term goal" is to expand its services between Europe and Asia. It is preparing capacity cuts throughout its network that will amount to a reduction of approximately -3% and warned of a "clearly loss-making" first quarter and an "extremely challenging" full year.
(FIN) will operate five-times-weekly, seasonal Helsinki - Bergen service beginning May 22.
(FIN) said the Finnish Airline Pilots Association rejected a settlement proposed by a state arbitrator but agreed to back off its threat to stage five one-day strikes. An overtime ban will continue, allowing flights to operate "for the most part normally," (FIN) said. (FIN) said it would have accepted the arbitrator's settlement and that negotiations will continue.
EMB-190-100 IGW (0252, OH-LKN), delivery.
March 2009: Finnair (FIN) began flying to Istanbul this month, the first time it’s done so since the 1980s.
(FIN) will suspend its four-times-weekly, Helsinki - Mumbai service from May until mid-October due to "unfavorable economic conditions" and overcapacity.
(FIN) will increase service from Helsinki to New York (JFK) (to 10-times-weekly, from seven) and Tokyo Narita (to daily, from four-times-weekly) in June - September. (FIN) will operate four-times-weekly, Helsinki - Ljubljana seasonal service March 29 through October 23.
(FIN) Technical Services (FTS) and Iberia (IBE) Maintenance signed a seven-year component support agreement under which (IBE) will provide spares and related repair services for (FIN) A330s and A340s. (FTS) in turn will perform component repairs on (IBE) A320s and (CFM-56B) engines. The contract is expected to generate around €30 million/$37.8 million in turnover. The work will commence in April, when (IBE) is scheduled to send an A320 to (FTS) for heavy maintenance.
(FIN) said it will furlough about 700 pilots (FC) for at least one week each beginning in the middle of next month as part of a -€30 million/-$38.4 million cost-savings program in the company's Flight Operations division. The length of leave will depend on airplane type. (FIN) Catering also will place employees on unpaid leave of two weeks to three months as part of a -€3.9 million cost-cutting initiative.
(FIN) said it will begin negotiations to furlough employees at Finnair Technical Services (FTS) for 2 to 3 months each in an effort to save approximately -€7 million/-$9.5 million. It already has committed to furloughs for pilots (FC) and catering employees and said that (FTS)'s "financial situation has weakened more strongly than expected as a result of cuts in traffic by both (FIN) and customer airlines outside the group." (FIN) is targeting €100 million in cost cuts company-wide this year.
(FIN) took delivery of its first of eight A330-302Es (994, OH-LTM).
April 2009: Finnair (FIN) said its first-quarter unit revenue fell more than -13% year-over-year. In March, it flew 1.85 billion (RPK)s traffic, down -8%, against a -3.7% fall in capacity to 2.54 billion (ASK)s. Load factor dropped -3.4 points to 72.9% LF.
(FIN) reported a first-quarter loss of -€18.6 million/-$24.5 million, reversed from a +€3.1 million profit in the year-ago period, as "the potential for profitability has run into the sand due to feeble demand and a collapse in price levels," President & (CEO), Jukka Hienonen said. Stating that the airline industry's first-quarter results "make for sad reading," Hienonen said that while (FIN) cut capacity, "cost flexibility, particularly in scheduled passenger traffic, is poor." He added that the carrier will benefit this year from an increase in efficiency by retiring the last of its six MD-11s when it takes delivery of its fifth A330-300 by year end. The first A330-300 arrived in March. It said the A330s will be -20% more fuel efficient than the MD-11s.
(FIN) claimed that its airplane financing for 2009 has been "safeguarded" and will support the A330 deliveries. It additionally said it will have the option of grounding seven 757s by year end when their leases expire.
First-quarter revenue fell -10.2% to €519.8 million, while expenses declined -4.6% to €544.1 million, producing an operating loss of -€24.3 million, reversed from an operating profit of +€8.8 million last year. Traffic was flat at 5.62 billion (RPK)s on a -1.4% cut in capacity to 7.41 billion (ASK)s, producing a load factor of 75.9% LF, up +1.1 point. Ex-special items, first quarter net loss was -$24 million (-$54 million).
Looking forward, Hienonen said (FIN) will "maintain its Asian strategy" of growing "services between Europe and Asia, utilizing Helsinki as a . . . transit location." Its capacity for full-year 2009 will be down -8% compared to 2008. The second quarter will "remain clearly loss-making," he conceded, adding that while forecasting full-year results is difficult, he expects a "negative" operating result for 2009.
(FIN) will operate twice-weekly, Helsinki - Krakow service April 2 - October 4 aboard an A319. (FIN) will operate five-times-weekly, Helsinki - Bergen service from May 22.
(FIN) as the national carrier of Finland, operates domestic services to 15 destinations and international services to over 67 destinations throughout Europe, Asia, India, Australia, and North America. Leisure flights are also operated to over 60 destinations, most of which are holiday resorts in the Mediterranean, the Canary Islands, the Caribbean and South-East Asia.
Employees = 9,480.
(IATA) Code: AY - 105. (ICAO) Code: FIN (Callsign - FINNAIR).
Parent organization/shareholders: State of Finland (55.78%); others (11.98%).
Owns: Norwegian (NWG) (5.1%).
Alliances: Oneworld (ONW); Aeroflot Russian Airlines (ARO); Air China (BEJ); Air France (AFA); American Eagle Airlines; Brussels Airlines (DAT)/(EBA); (CSA) Czech Airlines; Finncomm Airlines; Icelandair (ICE); Japan Airlines International (JAL); Malev (HGA); Rossiya Airlines (SDM); Sun-Air of Scandinavia; Ukraine International Airlines (UKR); & Ural Airlines (URL).
Main Base: Helsinki Vantaa airport (HEL).
Domestic, Scheduled Destinations: Helsinki; Ivalo; Joensuu; Jyvaskyla; Kajaani; Kemi/Tornio; Kittila; Kokkola/Pietarsaari; Kuopio; Kuusamo; Mariehamn; Oulu; Rovaniemi; Tampere; Turku; & Vaasa.
International, Scheduled Destinations: Amsterdam; Bangkok; Barcelona; Beijing; Berlin; Billund; Brussels; Budapest; Copenhagen; Dubai; Dusseldorf; Frankfurt; Fuenteventura; Geneva; Gothenburg; Guangzhou; Hamburg; Hong Kong; Kiev; Lanzarote; Larnaca; Las Palmas; London; Madeira; Madrid; Malaga; Manchester; Miami; Milan; Moscow; Munich; Murcia; New York; Osaka; Oslo; Ostersund; Paphos; Paris; Ponta Delgadares; Prague; Riga; Rome; Shanghai; Singapore; St Petersburg; Stockholm; Stuttgart; Tallinn; Tenerife; Tokyo; Vienna; Vilnius; Warsaw; & Zurich.
For Finnair (FIN) airplane maintenance - - SEE "FIN-MAINTENANCE" under Finnair Technical Services: Founded in 1923. SITA: HELZMAY.
Employs: 2,330. (FAA) Repair Station: #F10Y9030. Full support for:
MD-80; DC-10-30; MD-11; & A320.
Contact: email@example.com firstname.lastname@example.org
A330-302E (1007, OH-LTN), delivery - - SEE PHOTO - - "FIN-A330-302E-APR09." The A330-302Es are replacing MD-11ERs and have entered service on the Helsinki - New York (JFK) route.
May 2009: Finnair (FIN) will launch a seasonal twice-weekly, Helsinki - Pisa flight on May 8.
(FIN) and its Helsinki Vantaa-based Northport Oy ground handling subsidiary reached a cost-savings agreement worth some €3.5 million that will include the layoff of -15 employees, the two-week furlough of 87 more and the shift of 183 full-time positions to part-time status. Northport employs 858.
(FIN)'s second A330-300 entered service this month on a Helsinki - Delhi flight. The airplane also will operate to New York (JFK). Three more A330s are scheduled to arrive this year, including another one this month. The leases of its 7 757's will expire next year. All MD-11s will leave the fleet.
(FIN) added its third A330-300 (1013, OH-LTO), which will enter service on a flight to Delhi. Two more A330s will arrive in June and November.
A330-302E (1013, OH-LTO), and EMB-190 (0267, OH-LKO), deliveries.
June 2009: Finnair (FIN) flew 1.34 billion (RPK)s traffic in May, down -11% year-over-year, against a -16.3% decline in capacity to 1.94 billion (ASK)s. Load factor rose +4.2 points to 69.1% LF.
A330-302E (1023, OH-LTP), delivery.
July 2009: Finnair (FIN) flew 1.55 billion (RPK)s traffic in June, down -13.4% year-over-year, against a -14.2% cut in capacity to 2.1 billion (ASK)s. Load factor rose +0.6 point to 74% LF.
Travelport Global Distribution System (GDS) announced a new full-content agreement with Finnair (FIN) providing Travelport (GDS)-connected travel agents worldwide with access to (FIN)'s entire published inventory and fares.
(FIN) President & (CEO), Jukka Hienonen announced his resignation after the airline posted its fourth consecutive quarterly net loss, a -€26.1 million/-$37.5 million second-quarter deficit that reversed net income of +€13.4 million in the year-ago period. "I am not satisfied with the results achieved. The rate of change has been insufficient," Hienonen said in explaining why he is leaving, adding that "some personnel organizations have shown no willingness to adapt" to change. "(FIN) has a good and effective strategy on which it would be possible to build future success . . . [but] it will require a lot of work and also a completely different way of thinking in terms of working conditions."
Hienonen, 48, joined (FIN) in early 2006. (FIN) did not name a replacement or indicate how long a search might last, saying only that Hienonen will continue at the helm for the time being. His contract requires him to give six months' notice.
Second-quarter revenue fell -21.6% to €427.4 million, while expenses lowered -10.6% to €488.8 million, producing an operating loss of -€32.5 million, reversed from a +€20.1 million operating profit a year earlier. Consolidated net loss for the year's first half was -€44.7 million, widened from a -€16.5 million deficit in the year-ago period.
(FIN) initiated a €200 million cost-saving plan last year including €120 million in personnel expense cuts, but discussions with its seven unions have not materialized into agreements "by which we could safeguard the company's profitability and at the same time preserve jobs," according to the airline. A new group structure is slated be implemented October 1, a move that will integrate the company's scheduled and leisure operations. It will proceed with the modernization of its long-haul fleet and take delivery of a fifth new A330 in November as planned. Four A330s joined the fleet in the year's first six months. Despite the additions, scheduled traffic capacity for full year 2009 will be down -8% year-over-year.
August 2009: Finnair (FIN) said it is proceeding with a restructuring that aims to achieve greater efficiency and save costs.
(FIN) is in somewhat of a transitional state after President & CEO, Jukka Hienonen announced his resignation following its fourth consecutive quarterly net loss, but he is staying in the post for the time being and the restructuring is slated to move forward. (FIN)'s business activities will be divided into five operational entities from October 1: Commercial Operations, Production, Customer Service, Travel Services and Aviation Services, which comprises Finnair Catering, Finnair Technical Services and ground handling company Northport Oy as well as cargo entities.
(FIN)'s Scheduled Passenger Traffic & Leisure Flight Operations will be combined into an Integrated Flight Traffic organization, coming under the direct responsibility of the President & (CEO). Management of administrative support functions will be centralized from the units into Group Administration, and Resources Management & Long-term Operational Planning will be transferred to Group Administration.
"In the coming weeks, a detailed review of the units and departments belonging to each area will be completed," the company said in a statement. It did not indicate how many jobs may be cut.
Finnair Group subsidiary, Finnair (FIN) Facilities Management announced a deal with (NV) Property Fund covering the sale and leaseback of an airplane maintenance hangar, the ground handling fleet center, the ground equipment maintenance unit and the training center at Helsinki Vantaa airport. The sale price was €77 million/$110.3 million.
September 2009: Finnair (FIN) flew 1.74 billion (RPK)s traffic in August, down -10.2% from the year-ago month. Capacity dropped -10.1% to 2.17 billion (ASK)s and load factor slipped -0.1 point to 80.2% LF.
A "steep fall" in fares and weak domestic demand helped sink (FIN) to a -€20.7 million/-$30.6 million third-quarter loss, widened -16.3% from a -€17.8 million deficit in the year-ago period, and left (FIN) admitting it "still has a long way to go before its corporate structures and the operating conditions they create are sustainably competitive." The "poor demand and price levels" in Finland mean (FIN) is dependent on its Asian business, which now accounts for more than half its scheduled traffic revenue. "The decline in demand for business (C) travel has stabilized at a lower level, but overcapacity in the sector is continuing to keep ticket prices low, irrespective of the customer segment," (FIN) said.
Third-quarter revenue plunged -21.8% to €436.9 million, while operating expenses were down -15% to €477.1 million. Operating loss improved slightly to -€24.1 million from -€25.5 million in the year-ago period. (FIN) said the results were "in line with our predictions."
(FIN) in August launched its restructuring and reorganization program, which includes -200 job cuts and the impending departure of President & (CEO), Jukka Hienonen, and it issued a €120 million bond in September. (FIN) said capacity cuts and temporary labor agreements with maintenance, cabin service and catering employees have helped slow the bleeding. (FIN) has been unable to reach a deal with pilots (FC) but hopes to save €120 million in overall personnel costs. (FIN) said efficiency programs yielded €70 million in savings through the first nine months.
Scheduled passenger numbers fell -14% to 1.7 million as (RPK)s slipped -8%. Load factor rose -1.1 points to 79.3% LF, (FIN) said. Full-year capacity is expected to decline nearly -10%. Third-quarter unit revenue dropped -12.3%.
Nine-month net loss of -€65.3 million, compared to a deficit of just -€1.3 million in the year-ago period. (EBIT) plummeted to a -€80.9 million loss from a +€3.4 million profit in the first nine months of 2008. "There are signs . . . that the decline in travel demand is coming to an end, but overcapacity will not allow significant or wide-ranging increases in prices," (FIN) said, predicting that operating results for the second half and full year will be "clearly negative."
October 2009: Finnair (FIN) flew 1.6 billion (RPK)s in September, down -13.7% year-over-year, against a -12.2% cut in capacity to 2.09 billion (ASK)s. Load factor slipped -1.3 points to 76.6% LF.
(FIN) introduced daily, Helsinki Vantaa - New Delhi service on September 25.
(FIN) and the Finnish Flight Attendants Association reached a labor stabilization agreement valid from October 1 through December 31, 2010, covering the €12.3 million in cost cuts targeted by (FIN). Among the terms are a -5% salary cut during the period and cancellation of incentive bonuses. The deal also includes a "pay-back" stipulation depending on (FIN)'s 2010 and 2011 results. (FIN) said the terms "are not easy, but they are necessary . . . We reached an outcome by which redundancies will be avoided."
(FIN) announced the issue of a €120 million/$176.7 million domestic hybrid bond with a coupon rate of 9% per year. The bond was oversubscribed, the company said, and will be used to "finance the investment program and to strengthen the group's capital structure." Nordea Markets was appointed sole book runner. A hybrid bond is subordinate to the company's other debt obligations and is treated as equity on (IFRS) statements, (FIN) said.
Finavia, Finland's state-owned air navigation services provider and airports operator, said its board approved discounts on airport, air navigation and security charges for commercial air traffic. The discounts, effective September 1 for the remainder of 2009, will be "approximately -10%." Discounts for 2010 and 2011 will be decided upon later. According to a statement, "the purpose of the discount policy is to improve the operating preconditions of air traffic, especially domestic traffic, which is currently facing challenging times."
(FIN) announced a 10-year sale/leaseback transaction with Engine Lease Finance Corporation on one new (CF6-80E1) spare for its A330 fleet. The engine is worth €13 million at list prices, (FIN) said.
(FIN) announced the withdrawal of three 757s currently used on leisure routes effective next spring. It plans to reduce leisure capacity next summer and said it intends to "use our long-haul fleet more flexibly on scheduled and leisure flights according to seasonal fluctuations in demand structure." It will continue to operate four 757s, with newer A330s operating certain leisure flights this winter.
November 2009: Finnair (FIN) flew 1.72 billion (RPK)s traffic in October, a -12.3% decline from the year-ago month. Capacity fell -12.9% to 2.18 billion (ASK)s and load factor was up +0.5 point to 78.7% LF.
(FIN) will operate five-times-weekly, Helsinki - Toronto service June 6 to September 9.
(FIN) named Nokia Siemens Networks (COO), Mika Vehvilainen as its new President & (CEO) effective February 1. He will succeed Jukka Hienonen, who is leaving the airline at the end of January. Vehvilainen, 48, will join (FIN) on January 5 and "has strong experience of sales and marketing and of strategic management and business development in Asia, North America and Europe."
(FIN) said negotiations with Finnair Catering employees represented by the Finnish Aviation Union have failed to produce the required -€5 million/-$7.5 million in savings and that 60 employees now will be made redundant in a "first stage." Afterward, "a reorganization of operations will be considered to achieve additional savings, and a review of structural solutions will be initiated," the airline said. Catering employs some 650 people. (FIN) said it also is exploring solutions with its Northport ground handling subsidiary and Finnair Cargo Operations.
Pilots (FC) represented by the Finnish Air Line Pilots' Association carried out a strike, forcing (FIN) to cancel its entire program of more than >200 scheduled flights. (FIN) said leisure flights operated by management pilots (FC) will continue "with the help of leasing arrangements" and that "individual changes" to the schedule "are possible." The strike cost the airline -€2 to -€5 million per day, according to various press reports. Pilots (FC) rejected a settlement proposal, leaving (Fin) "totally stunned," it said. Senior VP Human Resources, Anssi Komulainen said (FIN) would have accepted any of the three mediator proposals presented over the past 18 months. "Now we are forced to come up with totally new solutions in order to secure the future of the company," he said. The union said, "The proposal by the state mediator allowed unlimited use of outside workforce, and did not offer pilots (FC) any work security. We cannot sign such a proposal."
(FIN) was scheduled to resume "a little less than half" of its flight program after pilots (FC) represented by the Finnish Airline Pilots' Association agreed to a settlement proposal by a government mediator. (FIN) was forced to cancel two full days of flying after pilots (FC) went on strike. "In addition to structural changes, we achieved through this agreement significant short-term cost savings. It has been agreed that, in addition to the -5% wage reductions, we will together pursue a -13% cut in unit costs," (FIN) Senior VP Human Resources (HR), Anssi Komulainen said, calling the settlement a "compromise solution" that included a new provision stipulating one year of redundancy protection. The deal expires on October 31, 2011. (FIN) canceled more than >500 flights.
December 2009: Finnair (FIN) flew 1.42 billion (RPK)s traffic in November, a -20.8% decline year-over-year. Capacity was cut -19.9% to 1.94 billion (ASK)s and load factor fell -0.8 point to 73.2% LF.
Finnair (FIN) Cargo contracted with Jetpak Finland to market cargo sales, bookings and shipments on domestic flights from February 1.
A330-302E (1067, OH-LTR), delivery.
January 2010: Finnair (FIN) said its fourth-quarter scheduled yield fell more than >-12% year-over-year and the full-year figure was down -14%. "No rise in prices is perceptible," it said. (FIN) flew 1.66 billion (RPK)s traffic in December, a -13.5% decline year-over-year, against a -14.4% cut in capacity to 2.11 billion (ASK)s. Load factor rose +0.8 point to 78.4% LF.
Amadeus will provide Emirates (EAD), (FIN) and TACA (TAC) with its Marketing Information Data Tapes, which contain information about airline bookings made by travel agencies connected to the Amadeus Global Distribution System (GDS).
The Helsinki airport is now offering valet parking.
February 2010: Finnair (FIN) reported a 2009 net loss of -€102 million/-$142.2 million, more than double the -€46.3 million loss it suffered in 2008, citing a "historically difficult year" in which demand and yield plunged. President & (CEO), Mika Vehvilainen, who took over the carrier's helm on February 1, said last year "was made particularly difficult by a sharp fall in domestic demand as well as price competition due to overcapacity in the sector on many of our main routes . . . Costs could not be cut as quickly as revenue declined." He said international business and cargo traffic are showing signs of recovery, "but this is still subject to strong price pressure."
He warned that the early part of this year continues to be "difficult," noting that "domestic demand shows no signs of recovery." In addition to continuing to cut costs (the carrier initiated a program in 2008 to slash -€200 million in annual costs, of which -€150 million has been realized), it "must . . . make every effort to increase growth in demand, create new sources of revenue and improve average prices," Vehvilainen said.
Full-year revenue dropped -18.5% to €1.84 billion, while operational expenses decreased -16.1% to €2.04 billion. Operating loss was reported as -€180.2 million, more than triple an operating deficit of -€52.1million in 2008. Traffic fell -9% to 19.94 billion (RPK)s on a -9.8% cut in capacity to 26.26 (ASK)s, producing a load factor of 75.9% LF, up +0.7 point. Unit revenue lowered -13.4%.
Fourth-quarter net loss was -€36.6 million, narrowed from a -€45 million deficit in the prior-year period, on a -20.9% dip in revenue to €457.7 million.
(FIN) will add its code to Meridiana (ALS)'s new twice-weekly, Helsinki - Florence A319 service beginning March 28.
(FIN) Flight AY022 from Delhi to Helsinki was the airline's final scheduled passenger flight aboard an MD-11. The type served (FIN) for nearly 20 years and flew some 400,000 hours on more than >50,000 segments. (FIN) became the first airline to operate the MD-11 in December, 1990 and had up to seven at one time. It now uses A330s and A340s on its long-haul routes. It has two owned MD-11s up for sale and is considering using the airplanes for cargo operations.
Finnair (FIN) said it is "exploring the possibility" of launching cargo flights between Helsinki Vantaa and unnamed Asian destinations by summer. It said January cargo demand on its Asian passenger flights rose +40% year-over-year. It serves a combined nine destinations in China, Japan, South Korea, India, and Thailand.
A330-302E (1078, OH-LTS), delivery, ex-(F-WWYU).
April 2010: Volcanic ash from the Eyjafjallajokull volcano eruption on Wednesday April 14th in south-eastern Iceland caused dramatic disruption to air traffic in Europe, with many airlines cancelling services throughout the following five days owing to airspace closures but questioning whether European Union (EU) governments and Air Traffic Control (ATC) providers were overreacting.
Severe restrictions on civil flights across most of northern and central Europe remained in place until over the following weekend. This included airspace over Austria, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, most of France, most of Germany, Hungary, Ireland, northern Italy, the Netherlands, Norway, Poland, Romania, Serbia, Slovenia, Slovakia, Sweden, Switzerland, Ukraine, and the UK. In some areas, upper airspace was made available for limited flights. But rather than easing, the restrictions spread on Sunday April 18: 11 airports in Spain closed as did Bulgarian airspace.
(IATA) (ITA)'s "initial and conservative" estimate of the financial impact on the airline industry is at least $200 million per day in lost revenue. It added that carriers would incur further costs for rerouting airplanes, maintaining parked airplanes at various airports and providing care for stranded passengers. The Association of European Airlines (AEA) said 63,000 flights were cancelled over four days.
The (AEA) and Airports Council International Europe jointly called for an "immediate reassessment of flight restrictions," asserting that non-passenger test flights conducted by several European airlines "have revealed no irregularities at all." The organizations questioned the "proportionality of the flight restrictions currently imposed."
(KLM) and Lufthansa (DLH) were among the carriers that performed test flights over the following weekend. (KLM) operated one on Saturday and was scheduled to operate nine more later. The technical inspection conducted after Saturday's 737-800 flight, which climbed to an altitude of 41,000 ft, "revealed that no problems had been encountered and that the quality of the atmosphere is in order," (KLM) said. (KLM) President & (CEO), Peter Hartman estimated the combined financial impact of lost revenue and costs for stranded passengers at €5 million/$6.8 million - €10 million daily. "This is rather dramatic," he told Dutch media. He confirmed that (KLM) does not have insurance that covers this event.
(SAS) warned it would lay off up to -2,500 employees temporarily in Norway, if airplanes remained grounded. It later announced that nearly all of its flights would be cancelled, though it did say "a few domestic flights" would operate in Norway.
Several European carriers, including Finnair (FIN) and Lufthansa (DLH), grounded their entire fleets. Ryanair (RYR) said it had cancelled all scheduled flights to/from the UK, Ireland, Denmark, Finland, Norway, Sweden, Belgium, the Netherlands, France, Germany, Poland, and the Baltic States.
Eurocontrol said there were 10,400 flights in European airspace two days after the eruption compared to 28,000 normally and approximately 5,000 on the Saturday April 17 compared to 22,000 on a normal Saturday.
The situation forced airlines in North America and Asia to cancel a high percentage of their Europe-bound flights. The USA Air Transport Association (ATA) said USA carriers cancelled 282 of 337 scheduled Saturday April 17 transatlantic flights. Meanwhile, hundreds of thousands of passengers were stranded at airports across Asia over the weekend as airlines in the region halted nearly all flights to Europe, though some to southern Europe were still operating.
SEE ATTACHED "AIRLINER WORLD" MAGAZINE ARTICLE ON THE VOLCANO ERUPTION IN ICELANDAIR (ICE) - - "ICE-2010-04-VOLCANO ERUPTION-A/B/C/D/E."
Finnair (FIN) signed a five-year deal with Champ Cargosystems to transition to automated cargo operations. It will implement the Cargospot Airline, Handling and Revenue modules to interface with global messaging solution GCCS as well as install Web booking, distribution and tracking solution CargoWEB as an ASP service.
A330-302E (1088, OH-LTT), delivery. 1 MD-11F (48512, OH-LGC), 2010-04, ex-(N512SU) delivery.
May 2010: Finnair (FIN) flew 1.19 billion (RPK)s traffic in April, down -22.8% year-over-year, against a -22.1% cut in capacity to 1.66 billion (ASK)s. Load factor dipped -0.7 point to 71.7% LF. The ash resulting from the volcanic eruption in Iceland canceled all Finnair (FIN) flights for five days last month.
Finnair (FIN) will lease two EMB-170s to Kenya Airways (KEN) for four years beginning June 1. The value of the lease agreement is nearly $20 million. The leasing arrangements are being made by USA lessor Jetscape Inc. Finnair Aircraft Finance, responsible for administering the Finnair (FIN) fleet, either owns or leases 10 EMB-170s. Of these, two are leased to Finncomm Airlines in Finland. The airplanes leased to (KEN) are for sale. (FIN) also operates 10 EMB-190s.
June 2010: Finnair (FIN) flew 1.47 billion (RPK)s traffic in May, up +10.2% from the year-ago month as capacity climbed +7.7% to 2.09 billion (ASK)s. Load factor grew +1.6 points to 70.7% LF.
(FIN) launched five-times-weekly, Toronto - Helsinki service on June 6.
Finnair (FIN) is becoming the launch customer for Airbus (EDS) A321 winglets after Air New Zealand (ANZ) in November was the first to order the winglet upgrade of the A320. The €400 million/$479.6 million deal, which still has to be converted into a firm order, replaces the existing order for two A330-300s (FIN) was to receive in 2012 to 2013. (FIN) says the A321ER is to enable (FIN) to still fly some medium-haul routes, but at lower capacity. The airline expects to receive the first A321ER in 2013. (FIN) will use it to replace four 757s. (FIN) also operates six regular A321s; the winglets should provide a -4% fuel burn advantage over the current model.
The move is a shot in the arm for Airbus (EDS), which is promoting
the A321 as a logical 757 replacement.
The move also means (FIN) will have an all-Airbus (EDS) fleet, both narrow- and wide bodies. It will receive its last A330-300 this year and start taking delivery of 11 A350-900s in 2014. (FIN) says the upgrade will boost the range to more than >5,000 km and enable the airline to fly from Finland to the Canary Islands.
July 2010: Finnair (FIN) flew 1.67 billion (RPK)s traffic in June, up +7.9% year-over-year, against a +3.4% rise in capacity to 2.17 billion (ASK)s. Load factor rose +3.2 points to 77.2% LF.
(FIN) will launch daily, Helsinki - Singapore Changi service May 30 aboard an A340.
Japan Airlines (JAL) and Finnair (FIN) expanded their code share agreement to allow (JAL) to place its code on (FIN) flights from Helsinki (HEL) to Berlin, Dusseldorf, Hamburg, Munich, Brussels, Warsaw, and Gothenburg, effective August 1. The carriers already code share from (HEL) to Tokyo Narita, Osaka Kansai, and Nagoya.
The USA Department of Transportation (DOT) issued its final clearance of antitrust immunity (ATI) for American Airlines (AAL), British Airways (BAB), Iberia (IBE), Finnair (FIN) and Royal Jordanian (RJA) to "more closely coordinate international services" including a planned (AAL)/(BAB)/(IBE) joint venture (JV) on transatlantic flights.
The granting of (ATI) follows on the heels of the European Commission (EC)'s approval and cements the (DOT)'s tentative approval earlier this year.
"The department found that granting (ATI) to the Oneworld (ONW) alliance will provide travelers and shippers with a variety of benefits, including lower fares in some markets, new nonstop routes, improved services and better schedules," the (DOT) said. "The (DOT) also said that the (ONW) alliance will enhance competition around the world by enabling the (ONW) alliance to compete more vigorously with Star (SAL) Alliance and SkyTeam (STM) Alliance, which operate similar immunized alliances." The (DOT) said that to alleviate any anti-competitive concerns the carriers had agreed "to make four pairs of slots at [London] Heathrow available to competitors for new USA - London service, with two pairs to be used for Boston - London service and the other two for service from any other USA cities."
(AAL) Chairman & (CEO), Gerard Arpey said, "We are pleased that USA and (EU) regulators have approved our long-sought-after alliance proposal. We look forward to delivering enhanced competition for customers on transatlantic flights."
British Airways (BAB) (CEO), Willie Walsh added, "This final approval is fantastic news for [(AAL)/(BAB)/(IBE)] and the Oneworld (ONW) alliance. We've waited 14 years to bring the benefits of the transatlantic joint business to our customers and level the playing field with the other two global alliances. We're pleased that the (DOT) and the (EU) have worked together to ensure that there is consistency in the number of slots that the three airlines have to give up for our competitors to use on services from Heathrow to the USA."
Finnair sold its last two MD-11 airplanes to US-based leasing company Neff Air, with plans to deliver the airplanes in January.
ST Aerospace Services Company in Singapore converted one Finnair (FIN) MD-11 to a freighter in 2009, and Finnair Cargo is flying that one, which is the only MD-11F Finnair (FIN) operates, says Maunu Visuri, VP Fleet mMnagement. Finnair (FIN) ceased operating passenger flights with MD-11s at the beginning of this year. ST Aerospace will convert a second MD-11 late this year, says Visuri.
ST Aerospace as a maintenance, repair and overhaul (MRO) provider, performs many passenger-to-freighter conversions; it delivered its first MD-11F freighter to (UPS) in 2001.
August 2010: Finnair (FIN) flew 1.85 billion (RPK)s traffic in July, up +3% year-over-year, against a +2.5% rise in capacity to 2.25 billion (ASK)s. Load factor rose +0.4 point to 82.2% LF.
A general improvement in operating performance was not enough to lift Finnair (FIN)’s financial results out of the loss column in the first six months, but (FIN) projects a profit for the second half of the year. (FIN) managed to curtail its first-half operating result to a -€39.9 million/-$5.1 million loss, down from a
-€100.5 million at the half-year point in 2009.
(FIN) President & (CEO), Mika Vehvilainen notes that fuel costs will be down and revenue is rebounding. That means “the profitability is expected to improve as turnover rises, due to improving unit revenues and growing demand. Also, the efficiency measures will be firmly continued.
The result for the second half of the year is expected to be profitable.” (FIN) recorded a +1.3% rise in turnover to €955 million.
Underscoring the improving picture, (FIN) reports that second-quarter unit revenue rose +3%, while costs were down -6.4%. “Despite the many uncertainty factors in the world economy, the sector has clearly moved into the recovery phase,” Vehvilainen says. (FIN) also is benefiting from strong growth in Asia, where it has focused much of its long-haul attention.
FlyBe (BEE) is looking to expand its operations as a de facto feeder carrier through a deal with Finnair (FIN) to provide regional services to Scandinavia and adjacent markets. The deal, announced August 5, will take effect October 31 when (BEE) will operate from (FIN)’s Helsinki hub to several Scandinavian and Baltic destinations, starting with Tampere and Turku in Finland and Estonia’s Tallinn. Starting out with three airplanes, (BEE) says the deal will expand in 2011. In addition, the carriers are looking at more expansive cooperation. The move comes after (BEE) set up an expanded cooperation agreement last month with Air France (AFA). The airline also placed a major order for additional Embrear regional
jets at last month’s Farnborough International Airshow, underscoring its growth plans.
In announcing the tie-up, Finnair (FIN) Vice President for Resources
Mmanagement, Ville Iho, says that “FlyBe (BEE) is highly suitable as a cooperation partner in our south and central Finland traffic. The company’s fleet and production structure support the operation of short routes. Expanding our cooperation base will give us flexibility to modify our feeder traffic network according to needs.”
The move could also help (FIN) focus more heavily on its long-haul activities, particularly its Asian network. Those operations have provided the strongest growth, of late, for (FIN), underscored by July’s traffic increase of +11% year-on-year. By contrast, (FIN)’s European operations have struggled. Traffic fell -4% last month compared with the same period in 2009, ahead of the -1% drop in
capacity. Similarly, domestic traffic was down -3%.
(FIN) chose Manne Tiensuu, as Senior VP Human Resources (HR) and member of the Executive Board.
(FIN) will lease two 270-seat A340-300s from (ILFC) (ILF) with deliveries in late 2010 and early 2011.
September 2010: Finnair (FIN) flew 1.73 billion (RPK)s traffic in August, a -0.6% fall year-over-year, against a +1.7% rise in capacity to 2.21 billion (ASK)s. Load factor fell -1.8 points to 78.4% LF.
(FIN) will launch six-times-weekly, Helsinki - Seoul Incheon services and five-times-weekly, Helsinki - Nagoya flights starting in December.
October 2010: Finnair (FIN) flew 1.62 billion (RPK)s traffic in September, up +0.7% year-over-year, against a +3.3% rise in capacity to 2.16 billion (ASK)s. Load factor fell -1.9 points to 74.9% LF.
(FIN) broke a streak of seven consecutive quarters in the red by posting third-quarter net income of +€32.4 million/+$44.7 million, reversed from a loss of -€18.1 million in the year-ago period. Revenue lifted +26.2% year-over-year to €551.4 million.
"The market situation has been clearly better than at the beginning of the year, which is evident in increasing demand and a sharp strengthening of unit revenues," President & (CEO), Mika Vehvilainen said in a statement, adding, "The perceived profit trend in (FIN) is encouraging, but long-term success requires systematic and continuous work to improve cost-competitiveness."
Third-quarter expenses rose +8.5% year-over-year to €513.9 million. Operating profit was reported at +€41.9 million, reversed from a -€32.9 million operating loss in the year-ago period.
(FIN)'s passenger traffic for the first nine months of 2010 dropped -2.3% to 14.78 billion (RPK)s on a -4.7% cut in capacity to 19.08 billion (ASK)s, producing a load factor of 77.5% LF, up +1.9 point. Vehvilainen said that demand "has improved particularly in business (C) travel, which has changed the sales mix" and "clearly improved" unit revenue.
He noted that unit revenue has "improved most in Asian traffic, where travel demand comes mostly outside Finland. Unit revenues have improved least in domestic traffic." Passenger yield improved +22.6% year-over-year in the third quarter.
Although Finnair (FIN) expects a profit decline in the fourth
quarter, (FIN) says it will remain in the black for the period and the full year. It has seen a +23.5% increase in unit revenue, with business (C) traffic coming back soundly. Unit costs fell -4%, with staffing levels down -15%. Finnair (FIN) continues to bet on its Asian network, and next year will see a +20% growth in capacity. In announcing the quarterly results, Vevilainen says that “our market
share in traffic between Asia and Europe is continually strengthening.”
Regarding the fleet, (FIN) took delivery of a new A330-300 in early 2010 and expects to receive another by year end. The delivery of two A340-300s on four-year leases in early 2011 will bring its long-haul fleet to 15 airplanes.
(FIN) will launch three-times-daily, Helsinki (HEL) – Stockholm Bromma service in the winter season aboard an Embraer EMB-170. (FIN) also operates up to nine daily flights from (HEL) to Stockholm Arlanda. (FIN) will extend its code share cooperation with American Airlines (AAL) next summer, when (AAL) begins Chicago O’Hare – Helsinki service aboard a 767-300ER.
(FIN) and Air Berlin (BER) will begin code sharing from October 31.
November 2010: Finnair (FIN) added a third daily flight to its winter schedule from Helsinki (HEL) to Stockholm Bromma and a fourth weekly departure to Yekaterinburg on October 31. Beginning in January, it will boost its (HEL) – Seoul Incheon flights from three to six weekly, and departures to Nagoya from three to five weekly. It will launch one additional flight from (HEL) for both Osaka Kansai (KIX) and Delhi, bringing the frequencies to (KIX) to six-times per week and making Delhi a daily service. (FIN) will operate its A330/340 fleet on leisure routes to Phuket, Krabi, and Las Palmas.
(FIN) will launch daily Helsinki - Gdansk service March 27.
December 2010: Oneworld Alliance (ONW) carrier Finnair (FIN) has formally unveiled a new livery for its fleet, featuring a largely silver-white color scheme and much bolder branding titles on the fuselage. (FIN) says the revamp is part of its 'Vision 2020' business plan and will be introduced from January, along with an overhaul of its service principles.
(FIN), which has been struggling to overturn losses, says the cost of the new look is around €10 million/$13 million, although it says the renewal "would, in any case, have taken place in the next few years". (FIN)'s long-haul fleet will be painted in 2011 and all its airplanes will be finished in 2013. "The blue-and-white coloring has been preserved, but the modern look is lighter than before, with white and silver complementing the distinguished dark blue of the logo," says (FIN). SEE PHOTO - - "FIN-2010-12-NEW LIVERY."
January 2011: Finnair (FIN) said that growth last year was “tarnished” by the volcanic ash crisis in April and the 10-day long strike by its by cabin (CA) staff in December. As a result, it posted a -€22.8 million/-$31.3 million full-year net loss, narrowed from a -€95.2 million deficit in 2009.
(FIN) said the implementation of multiple efficiency measures helped slow the rise in costs. Consolidated full-year revenue heightened +10.1% to €2.02 billion, while operating expenses inched up +1.1% to €2.05 billion. Operating loss narrowed to -€13.3 million from a -€114.9 million operating deficit in the prior year. The ash crisis and labor dispute had a negative impact of -€30 million and -€24 million, respectively. Without these disruptions, (FIN) asserted, “Finnair (FIN)'s financial year 2010 would have been in profit.”
President & (CEO), Mika Vehvilainen commented, “Last year we witnessed much that was positive in the development of our operating environment. Due to efficiency measures, we were able to reap the benefit of improving demand and price levels, as well as a tailwind provided by the strengthening of key sales currencies.” He promised to “continue our work and implement structural changes during the coming year. There is still room for improvement in work productivity. It is to our benefit that we can undertake this work as traffic grows.”
(FIN) expects to grow revenue by more than >+10% this year with traffic expansion directed almost entirely at Asia, to/from which it will increase its capacity by more than >20% compared to 2010.
Total 2010 boardings fell -4% to 7.1 million, but passengers carried on scheduled flights fell only -0.9% to 6.2 million. Passengers on Asia flights heightened +7.4% to 1.2 million. Scheduled (RPK)s traffic rose +2.5% on a +1% increase in capacity, and scheduled passenger load factor improved +1.1 points to 74.5% LF. Scheduled traffic yield lifted +9.3%.
Fourth quarter net loss was -€5.7 million, reduced from a -€35.4 million deficit in the prior-year period, on a +12.9% increase in revenue to €516.9 million. Scheduled traffic yield improved +15.3% year-over-year. Operating loss narrowed to +€4.7 million from -€41.4 million in the 2009 December quarter.
Vehvilainen said he believes the consolidation trend in the sector will continue in Europe, adding, “Finnair (FIN) is assessing its own role in developments and is seeking to take advantage of the best options from a shareholder perspective.” (FIN) said it expects to post an operating profit this year, but warned the first quarter is expected to “remain clearly loss-making.”
(FIN) just can’t seem to get enough of Asia. And not just East Asia. This month, it increased frequencies to Delhi, giving it daily service for the winter season (it first started flying to Delhi in late 2006). Late last year, (FIN) increased frequencies to Osaka, Nagoya and Seoul as well and will do the same with Hong Kong in June. It’s also beginning all-new service to Singapore this spring (in May to be exact). By the summer, (FIN) will operate 74 flights per week (more than ten a day on average) to ten different Asian cities.
High speed trains are now operating between Helsinki and St Petersburg in Russia. Russia is another important market for Finnair (FIN), with Finland sharing a border with the giant country. But it’s not alone in its affection for the land of Tolstoy. Air Berlin (BER) calls Russia one of its “most important markets.”
(FIN) reached a code share agreement with Qantas (QAN) for routes between Helsinki and Melbourne, Brisbane, Perth, Adelaide, and Sydney, via Singapore, and between Helsinki and Sydney, via Bangkok. The cooperation begins via Bangkok in February and via Singapore in May, when (FIN) commences its daily operations to Singapore.
(FIN) appointed United Airlines (UAL) VP Resources Management, Gregory Kaldahl, 53, as its Senior VP Resources Management.
MD-11F (48513, OH-LGD), re-delivered to Finnair Cargo (FIN) after conversion. A340-313E (174, OH-LQG - - SEE PHOTO - - "FIN-A340-313E-2011-01"), delivery, ex-Air France, ex-(F-GNIG).
February 2011: Finnair (FIN) flew 1.81 billion (RPK)s in January, up +3.2% year-over-year, against a +12.2% rise in capacity to 2.50 billion (ASK)s. Load factor dropped -6.3 points to 72.3% LF.
Jetstar (IMU) launched an interline agreement across its group of airlines with Oneworld (ONW) alliance carrier, Finnair (FIN). The partnership allows (FIN) passengers to purchase a Jetstar (IMU), Jetstar Asia (JSA), Valuair (VLU) or Jetstar Pacific (PAH) flight as part of a single integrated transaction and travel itinerary and sold on a (FIN) E-ticket.
March 2011: The Finnair (FIN) Group announced Deputy CEO, Lasse Heinonen will leave on May 15. Heinonen joined (FIN) as CFO in 2004 and has served as Deputy (CEO) & Executive VP since 2009.
May 2011: The Finnair Group reported a loss of -€33.8 million/-$49.6 million for the first quarter ended March 31, widened from a deficit of -€21.7 million in the year-ago period. (CEO), Mika Vehvilainen cited the impact of events in Japan, as well as rising fuel prices and excess industry capacity for the lower results.
The same factors are expected to lead to a loss for the second quarter and he said that "unless there is a substantial improvement toward the end of the year in the oil price trend and the situation in Japan," (FIN) "will be unable to achieve a positive result in 2011," although it expects to be profitable for the July to December period.
Turnover rose +10.8% to €533.7 million, but this was more than offset by a +13.5% rise in expenses to €579.6 million and operating loss increased to -€43.1 million from -€25.9 million in 2010. Fuel expense jumped +26.1% to €132.8 million. Turnover from the airline business rose +12.2% to €452.3 million but (EBIT) was a negative -€43.9 million, a deterioration from year-ago (EBIT) of negative -24.6 million.
(FIN) carried 1.89 million passengers in the period, up +2.5% on a +1.7% increase in passenger traffic to 5.34 billion (RPK)s. Yield rose +7.6% to €0.068. However, capacity climbed +12.1% to 7.35 billion (ASK)s, pushing load factor down -7.4 points to 72.6% LF, with the result that unit revenue declined -1.3% to €0.055. Unit cost, meanwhile, declined -0.1% to €0.064, but decreased -2.5% excluding fuel, to €0.047. The average number of employees slipped -2.7% to 7,470.
Vehvilainen said (FIN) is determined to continue implementing its Asia strategy. On April 27, it announced the addition of five weekly flights to Hong Kong during the summer schedule, bringing total services to 12 per week between May 30 and October 9. Daily service to Singapore commences May 30. It will be (FIN)'s 10th scheduled destination in Asia.
"We have to work hard to turn the growth enabled by our strategy into profitability. This will require the continuous enhancement of our operations, the development of our route network and strategy and the re-evaluation of the structural solutions in the Finnair Group," he said. Operations will be enhanced, "by investing in process and automation development and by cutting overlapping activities," he stated. It is also looking to create a "cost-efficient production platform" for certain regional feeder traffic routes and examining whether it makes sense to outsource certain business activities such as catering.
Finnair (FIN) will increase seven-times-weekly, New York (JFK) - Hong Kong service to 12-times-weekly between May 30 - October 9. (FIN)'s new daily, Helsinki (HEL) - Singapore route will open May 30. (FIN) operates 74 flights per week to Asia.
June 2011: World Airways (WLD)and Finnair (FIN) Cargo signed an agreement to operate twice-weekly, (FIN) MD-11F Helsinki - Shanghai - New York cargo service beginning June 15 using (WLD)'s traffic rights.
July 2011: Finnair (FIN) will launch four-times-weekly, Helsinki - Chongqing A340 service in May 2012. (FIN) will launch twice-daily, Helsinki - Lyon Embraer EMB-190 service on April 2.
(FIN) said it will operate a scheduled flight partially powered by biofuel between Amsterdam (AMS) and Helsinki (HEL), and will ultimately operate at least three biofuel flights on the route. (FIN) said it will use a 50/50 blend of fuel with half derived from "recycled vegetable oil" and half derived from traditional aviation fuel. It did not say which airplane type will be used; it generally flies A320 family airplanes on the (AMS) - (HEL) route. The fuel will be supplied by Amsterdam-based SkyNRG, which was co-founded in 2009 by Air France (AFA)/(KLM), the North Sea Group and Spring Associates.
"(FIN) and SkyNRG have agreed to jointly work on a structural supply chain, as both parties firmly believe that the adoption of 'green routes' by airlines will help accelerate the development of sustainable and affordable jet fuels, which have the potential to reduce aviation emissions by up to -80% in the long term," (FIN) said. "At this stage, (FIN) aims to fly at least three (AMS) - (HEL) flights using a 50% biofuel blend in both engines." Refueling will be done at (AMS).
(FIN) noted it "will accept for permanent use only a biofuel alternative that is socially, ecologically and economically sustainable. For example, the cultivation of the biomass used in the production of biofuel must significantly reduce GHG emissions, must not compromise food production or lead to biodiversity degradation or deforestation."
Lufthansa (DLH) started scheduled biofuel flights, launching a six-month trial in which an (IAE) (V2500)-powered A321 will operate on the Frankfurt - Hamburg route.
Flybe (BEE) and Finnair (FIN) announced they will jointly acquire Finnish Commuter Airlines (FCA), the Finnish regional carrier owned by privately held Finncomm Oy, for €25 million/$36.2 million in cash. The acquisition will be made through a new joint venture (JV), to be called Flybe Nordic (FCA), in which Flybe (BEE) will hold 60% and Finnair (FIN) 40%.
(BEE) will pay €12 million for the majority stake while Finnair (FIN) will pay €13 million for the smaller holding, “but Flybe (BEE) has committed to carry several investments relating to the operational side of the business,” a (FIN) spokesperson noted. (BEE) plans to take over the day-to-day operation and management of the airline from August 1. The acquisition is subject to the approval of relevant competition authorities.
“Finnair (FIN) and Flybe (BEE) have complementing competencies and we believe that (BEE)'s experience in regional flying, combined with (FIN)'s local knowledge and international operations, will be a winning combination. We look forward to working together and building a new strong player in the Nordic and Baltic markets,” Finnair (FIN) (CEO), Mika Vehvilainen commented.
“Finnish and Nordic passengers will see something very different from what has been available to them in the past,” promised (BEE) Chairman & (CEO), Jim French, adding that “much-needed” point-to-point routes will be established.
(FCA) will continue operating existing domestic routes, feeding into Finnair (FIN)’s hub at Helsinki, and gradually expand its network into Sweden, Denmark, Estonia, and Latvia using (BEE)’s low-fare concept/product. The plan is to announce details in mid-August of an “extensive new route network” that will operate from the start of the (IATA) winter season on October 30, (BEE) noted.
Finncomm (CEO), Juhani Pakari said that “negotiations have been long and thorough, and we are very happy with the result. This is a good solution for customers as well as for our staff. This is an excellent opportunity to develop the company to be the best regional airline in Northern Europe.”
Relations between (FCA), which has provided feeder services for (FIN) since 1998, and (FIN) have been tense at times. In September, both parties reached a preliminary agreement calling for (FIN) to buy a 20% stake in (FCA) and to acquire 100% of the companies that own Finncomm Group's ATR42/72 airplanes.
Finnair (FIN) confirmed it still intends to purchase the (FCA) fleet and lease it “on market terms.” It will buy (FCA)’s current nine ATR72-500s, plus three on order to be delivered this autumn and in 2012, and lease them to (FCA). The remaining four ATR42s owned by Finncomm Oy will be leased to (FCA) for certain predefined periods. In addition, (FCA) will continue leasing two (FIN)-owned Embraer EMB-170 airplanes. Finnair (FIN)'s investment in the nine ATR72s will be approximately €104 million, including €70 million in debt liabilities.
“There's a huge demand and undersupply in the industry for the ATR airplanes. Due to the fuel efficiency, they are optimal for regional flying. For (FIN) this is a great opportunity to strengthen our fleet and as such it is a smart investment and ensures that our new (JV) will have the required capacity from day one,” Vehvilainen stated.
Flybe (BEE), which is a DHC-8-Q400 and Embraer EMB-jet operator, committed to continue using the ATR for its Nordic operations, the (FIN) spokesperson said. Flybe (BEE) has also agreed to buy 46% of Finnish Aircraft Maintenance.
(FCA) carries some 900,000 passengers annually. Finnair (FIN) transported 7.1 million passengers in its last financial year, down -4%, while Flybe (BEE) flew 7.2 million passengers, flat year-over-year. The Finnair Group posted a -€22.8 million net loss in 2010, narrowed from a -€95.2 million deficit in 2009.
(BEE) last month reported net income of +£3.8 million/+$6.1 million for its fiscal year ended March 31, down from +£22.2 million earned in the prior year. Net income benefitted from a +£8.1 million tax credit. Revenue rose +4.4% to £595.5 million and operating costs increased +5% to £587.9 million. Operating loss came in at -£0.9 million, reversed from a positive (EBIT) of +£27.6 million in Fiscal Year (FY) 2009 - 2010.
SEE ATTACHED PHOTO - - "FIN-2011-07-FLYBE NORDIC JV" WITH MIKE RUTTER, (BEE) (CCO); MIKA VEHVILAINEN, (FIN) (CEO); & MARK CHOWN, (BEE) DEPUTY CHAIRMAN.
August 2011: Finnair (FIN) Engine Services inked a four-year engine maintenance and repair agreement with Rossiya Airlines (SDM), which covers the (CFM56-5B) engines on (SDM)’s A319/320 airplanes.
Flybe Nordic (FCA), the new joint venture (JV) of Flybe (BEE) and Finnair (FIN), will operate 416 weekly flights on 24 regional routes in the 2011 - 2012 winter schedule, including all former Finnish Commuter Airline (Finncomm) routes plus nine new routes, the carriers announced.
(FCA), 60% controlled and also managed by Flybe (BEE), completed its acquisition of Finncomm on August 18. All Finncomm routes will come under the Flybe (BEE) brand. New routes are: Helsinki to Mariehamn in Aland, the autonomous territory under Finnish sovereignty (twice-daily), Tartu in Estonia (six-times-weekly), Trondheim in Norway (four-times-weekly) and Umea in Sweden (four-times-weekly); Tampere to Tallinn (TLL) in Estonia (three-times-daily); and (TLL) to Stockholm Bromma (three-times-daily), to Vaasa (six-times-weekly) and Oulu (six-times-weekly). The latter three routes will be operated by Flybe (BEE) franchise partner, Loganair. Most of the routes will start October 30, but flights from Oulu, Turku and Vaasa to/from to (TLL) will launch on November 14. (BEE)’s new routes will be included in Finnair (FIN)’s flight schedules and flown as code share flights.
Managing Director, Flybe Europe (BEE), Mike Rutter said there were plans to developing existing routes and expand to Latvia, Lithuania and Denmark.
Flybe (BEE) just reported an increase in passenger numbers, yield and revenues. Total first-quarter revenue ended June 30, rose +8.3% year-on-year to £160.4 million/$260.6 million and passenger revenue was up +12.2% to £150.6 million. Seats flown increased +7% to 3.1 million and boardings increased by +7.7% to 2 million, resulting in a 0.4 point improvement in load factor to 63.1% LF. Ticket yield rose +3.4% to £62.27 and ancillary yield rose +8% to £13.89. Passenger revenue per seat grew +4.9% to £48.09.
October 2011: Finnair (FIN), worried about an overreliance on Asia, will lay off approximately 155 workers in management. (FIN) also plans to cut costs in the areas of procurement, Information Technology (IT) and marketing. (FIN)’s also outsourcing some ground handling to Swissport, renegotiating airplane leases and evaluating the optimal size of its short-haul fleet.
(FIN) is expanding on the shorthaul front, adding Helsinki service to the Croatian resort city Dubrovnik. Flights will operate
three times a week starting in April, for the summer only. (FIN) hopes to attract some passengers flying there from Asia, but a substantial portion of seats will be allocated to (FIN)’s tour operator arm for holiday demand.
(FIN) will operate 3x-weekly, Helsinki - Dubai 757 service on October 7 - March 23.
November 2011: Finnair (FIN) will return four A320s at the end of their lease periods in the fall of 2012 as part of its -€140 million/-$186.6 million cost-savings program, to be completed by 2014.
As a result of this move, (FIN) said it “expects to realize a boost in narrow body airplane utilization.” The move will not impact personnel.
According to the Finnair Group website, (FIN) operates 65 airplanes, comprising 11 A319s, 12 A320s, six A321s, eight A330-200s, seven A340-300s, four 757-200s, five Embraer EMB-170s and 12 EMB-190s. Twelve of the 29 A320 family airplanes are leased.
SEE ATTACHED - - "FIN-A340-313X - REPAINT 2012-11."
December 2011: In May, Finnair (FIN) is flying to Chongqing, a large Chinese city along the Yangtze River which is an important inland manufacturing center.
January 2012: Finnair (FIN) has announced several new leisure routes that have not been previously sold as scheduled services:
Helsinki - Aqaba: weekly seasonal A320-200 service between November 5 and March 24;
Helsinki - Cancun: weekly seasonal A330-200 service has started on December 5 (operated by Hifly (LXA);
Helsinki - Colombo Bandaranaike International: weekly seasonal A330-200 service between December 17 and March 3 (operated by Hifly (LXA);
Helsinki - Dubrovnik: 3x weekly seasonal A320-200 service starting on April 2;
Helsinki - Dubai - Ho Chi Minh City: weekly seasonal 757-200 service has started on December 18;
Helsinki - Halifax - Cartagena: bi-weekly seasonal 757-200 service starting on January 12;
Helsinki - Halifax - Holguin: bi-weekly seasonal 757-200 service has started on November 22;
Helsinki - Halifax - Puerto Plata: bi-weekly seasonal 757-200 service has started on November 10;
Helsinki - Halifax - Varadero: bi-weekly seasonal 757-200 service has started on November 29;
Helsinki - Hurghada: 2x weekly seasonal A320-200 service between November 4 and March 23;
Helsinki - Krabi: 2x weekly seasonal A330-300 service (already launched);
Helsinki - Langkawi: weekly seasonal A330-200 service between December 16 and March 17 (operated by Hifly (LXA));
Helsinki - Ovda: weekly seasonal A319-100 service starting on February 12;
Helsinki - Phuket: 3x weekly seasonal A330-300 service (already launched);
Helsinki - Ponta Delgada: weekly seasonal 757-200 (already launched);
Helsinki - Sharjah - Goa: weekly seasonal 757-200 service (already launched);
Helsinki - Sharjah - Mombasa: bi-weekly seasonal 757-200 service has started on December 13;
Helsinki - Sharm el Sheikh: weekly seasonal A320-200 service between November 7 and March 19;
Helsinki - Tel Aviv Ben Gurion: weekly A320-200 service starting on February 12;
Oulu - Phuket: weekly seasonal A330-200 service has started on December 13.
It has given up plans for a new Helsinki - Lyon route that was scheduled to start in April and will not operate its seasonal services from Helsinki to Lisbon and Pisa in mid-2012. Finnair (FIN) and Belavia (BLV) have signed a code share agreement for the Helsinki - Minsk International 2 route operated by Belavia (BLV). (FIN) has also started code sharing on Malmö Aviation (TSW) services from Stockholm Bromma to Malmö.
Bangkok Airways (PGB) and Finnair (FIN) have signed a code share agreement beginning January 15. (FIN) will place its code on (TII) service between Bangkok and Samui, Phuket, Chiang Mai, as well as Singapore - Samui service and Hong Kong - Samui service.
Amsterdam-based SkyNRG finished 2011 on a high note by partnering with Thai Airways (TII) to conduct what was called “the first passenger biofuels flight in Asia” in late December (Air China (BEJ) flew a biofuel demonstration flight in October without paying passengers). The (TII) flight from Bangkok to Chiang Mai included a 777 with both engines running on a 50 - 50 fuel mix of bio-jet fuel derived from used cooking oil and conventional petroleum-based jet fuel. As we’ve seen before with these “first” flights, (TII) airline officials said the flight marked the beginning of a collaborative effort to develop a bio-jet fuel supply chain in Thailand. For SkyNRG, which sourced the fuel, this flight followed similar flights
by Air France (AFA), Alaska (ASA), Finnair (FIN), (KLM) and Thomson Airways (ATZ)/(TFY), all since July, when bio-jet fuel became standardized.
In their search for commercially viable bio-jet fuel, airlines are leaving no stone unturned in Australia. Lufthansa has signed an agreement with the Perth-based biofuel company Algae.Tec. The plan is to “jointly evaluate the potential” of Algae.Tec’s algae-based crude oil as a low-carbon jet fuel source. Meanwhile, Air New Zealand (ANZ) and Virgin Australia (VOZ) signed similar agreements with the Sydney-based biofuel company Licella, which has technology to convert a range of waste plant material, such as sawdust, corn stalks and sugar cane waste, into bio-jet fuel.
(FIN) has announced plans to retire four A320-200s from its fleet in fall 2012 in an attempt to improve its profitability. (FIN) has wet-leased an A330-200 from HiFly (5K/Lisbon) for the winter season to increase its long-haul leisure services.
February 2012: After seeing its operating loss plummet to -€60.9 million/-$80.8 million in 2011 from -€4.7 million the previous year, Finnair (FIN) has announced that it plans to restructure its unprofitable short-haul operations and outsource them to an external partner.
(FIN) plans to establish a low-cost carrier (LCC) joint venture (JV) and is seeking a partner to take over its loss-making short-haul network. (FIN) said that it is evaluating transferring "the entire narrow body fleet or a part of it to the new company". The existing operations would then focus on long-haul routes.
(FIN)'s new short-haul venture is to have bases outside of Finland and "expand the company's network in the Nordic countries", the airline said. Together with UK airline Flybe (BEE), (FIN) established its Flybe Nordic regional operations last year.
While the group's annual revenues grew +11.6% to €2.26 billion in 2011, increased fuel prices and the weakening of the global economy as well as the effects of Japan's earthquake and political uncertainty in the Middle East "more than offset" (FIN)'s cost savings, said (CEO) Mika Vehvilainen.
The operating margin fell from -0.2% in 2010 to -2.7% in 2011.
Passenger numbers increased +12.2% to just over >8 million last year while available seat kilometres (ASK) grew by +16.8%.
After announcing a cost-cutting program in August, which is to save €140 million annually by 2014, (FIN) managed to slash costs by -€10 million during the second half of the year. Unit cost excluding fuel decreased -6.1%.
This year, however, the company wants to save €80 million, which will mean redundancies and "big changes to the company's personnel", according to Finnair (FIN).
(FIN) also wants to further reduce its in-house maintenance operations as well as other non-core activities. Early last year, the company decided to abandon low-margin airframe heavy maintenance in favor of high-value engine and component Maintenance Repair & Overhaul (MRO). However, now (FIN) also wants to find a "cost-efficient solution for equipment and engine maintenance".
Slashing maintenance and personnel costs will be the largest area of the savings program, which will make up approximately a quarter of the €140 million target. Sales and distribution costs will be reduced by around 15% while Information Technology (IT), fleet and ground handling costs are to be cut by -30%.
While baggage handing and apron services have already been transferred to Swissport, (FIN) is now also looking to outsource catering services.
March 2012: SEE ATTACHED "AIRLINER WORLD" REVIEW - - "FIN-2012-03-A/B/C/D/E/F/G/H/I/J - 2012-03."
April 2012: Finnair (FIN) said it will cut -280 maintenance (MT) jobs at Helsinki Vantaa airport (HEL) as it outsources engine and component services to Swiss SR Technics (SWS) in a further move to cut costs. (FIN) said it will also close down its engine servicing operations and reorganize its components division, which together employ 350 workers.
(FIN) (CEO), Mika Vehviläinen said (FIN) is considering new options for operating short-haul flights, including creating a joint venture carrier, as part of its cost-savings initiatives. Several Finnish media outlets have reported Air Berlin (BER) could be the partner. Vehviläinen said that a possible strategic partner could have a fleet of up to 150 airplanes. (FIN) (CEO) Mika Vehvilainen has identified Oneworld (ONW) Alliance partner, Air Berlin (BER) as one of several carriers it is talking to about potentially outsourcing some of its short-haul flying to save costs as part of a restructuring plan.
(FIN) said it would like to reduce operating costs on European short-haul routes by -20% to -40%.
May 2012: Finnair (FIN) launched 4x-weekly, Helsinki - Chongqing A330/A340 service.
Flybe Nordic (FCA), the joint venture between Flybe (BEE) and Finnair (FIN), will take on about one-third of (FIN)’s European services to cut costs and improve its financial position.
From October 28, Flybe Nordic (FCA) will operate (FIN)’s 12 Embraer EMB-190 regional jets on a range of (FIN)’s short-haul sectors, taking advantage of the joint venture company’s lower cost base.
Mike Rutter, Managing Director of Flybe Europe, said: “We have been flying eight airplanes on a contract basis for Finnair (FIN) since August 2011 and we are delighted that the quality and efficiency of our operations have persuaded (FIN) to add another 12 airplanes to our partnership.” The move was “an important step in our growth strategy,” he said.
“Flybe (BEE) has proven its capabilities to run regional traffic efficiently,” said (FIN) (CEO), Mika Vehvilainen. From passengers’ perspective, the transfer of services should be “almost imperceptible.”
(BEE) and (FIN) joined forces to buy Finnish Commuter Airlines (Finncomm) in 2011 and renamed it Flybe Nordic (FCA). The bulk of its fleet consists of ATR42 and ATR72 turboprops.
(BEE) Chairman & (CEO), Jim French intimated his company would be looking for similar contract flying arrangements: “With this deal, 25% of the fleet under Flybe (BEE) Group management will be deployed under contract flying arrangements. We believe there are many more similar opportunities to develop this side of the business.”
June 2012: Some 1,000 Finnair (FIN) Technical Services staff (MT) walked off the job in what unions said would be a week-long protest against (FIN)’s plans to cut jobs as part of an outsourcing deal.
The strike will hit maintenance services for its scheduled services at Helsinki-Vantaa airport but (FIN) said that it would be able to fly most of its flights on schedule, although some cancellations were to be expected. “We apologise for any inconvenience this walk-out might cause for our customers,” (FIN) said, adding: “We will make every effort to ensure continued operations so our customers’ travel plans won’t be disturbed.”
The strike was linked to (FIN)’s decision in April to outsource its engine and component services to Swiss company SR Technics (SWS), resulting in -280 job cuts. That deal was part of a restructuring plan announced last year aimed at reducing (FIN)’s annual costs by -140 million euros/-$184 million by 2014.
The unions, which had been discussing the impact of the SR Technics (SWS) deal with Finnair (FIN), had not accepted (FIN)’s proposal for financial and re-employment support packages for the affected employees, the company said.
One of the unions, Pro Union, also lamented in a statement that “(FIN)’s management has not been forthcoming in providing employees with sufficient knowledge and financial reasons for the cutbacks.”
Following April’s announcement, 600 members of that union working in (FIN)’s Technical branch staged a two-day strike.
(FIN) employs around 7,500 people in all.
July 2012: Finnair (FIN) has reached an agreement with SR Technics (SWS) to outsource engine and component services, in a cost-cutting move that will cut -280 maintenance (MT) jobs.
(FIN) will also close down its engine servicing operations and reorganize its components division, which together employ 350 workers. (FIN) will keep certain parts of engine and component operations as a part of its Line Maintenance organization.
(FIN) is in talks with a potential buyer on the possible sale of a part of its engine operations.
If the deal is implemented, 75 jobs will remain in Engine Services.
These changes do not impact (FIN)’s Line Maintenance.
August 2012: Finnair (FIN) reported a second-quarter loss of -€19.8 million/-$24.9 million, a +13.9% improvement over the -€23 million loss recorded year-over-year.
Turnover was up +10.2% to €594.4 million from €539.4 million in the year-ago period. As a result, operating income moved into positive territory to €14.7 million, reversed from €13.8 million in the year-ago period. This was despite a significant +19.9% increase in fuel costs, which now accounts for 27% of overall expenses.
First-half losses improved +29.2% to -€40.2 million from a loss of -€56.8 million in the year-ago period.
(FIN) (CEO), Mika Vehviläinen said: “Our turnover reached nearly €600 million, thanks to increased capacity, growing demand in passenger traffic and the positive development of passenger load factors.”
Passenger numbers for the quarter were up +10.6% to 2.3 million. (ASK)s were up +2.7% and (RPK)s were up +11.3%. (RASK)s were up +9.7% to €6.60 cents, and (CASK)s were up +4.5% at €6.66 cents. Load factor was 65.5% LF, up +4.3% year-over-year.
As part of (FIN)’s cost-cutting measures, the number of employees fell -4.8% to 7,157 during the first half.
Vehviläinen said (FIN) is committed to a program of structural change and cost reduction aimed at saving €140 million by 2014. (FIN) is well on track to meet targeted savings of -€70 million in 2012.
“Although there is a lot of economic uncertainty around the globe, in Europe in particular, we expect the operational result for the second half of the year, cyclically stronger than the first half of the year, to reflect improved profitability compared to the first half of the year,” Vehviläinen said. However, fuel costs for the full year are expected to be significantly higher in 2012 due to increased capacity and high fuel prices.
He also said the company is “still committed to identifying any and all means to significantly reduce the cost level of European traffic,” but that it has yet to find “a suitable partnership solution.” He is understood to have told a local newspaper that independence was not the only option for the struggling carrier and that a wider airline alliance could provide competitive opportunities.
Flybe Nordic (FCA), the joint venture (JV) between UK regional carrier Flybe (BEE) and Finnair (FIN), plans to expand its services in Denmark.
Flybe Europe (CEO), Mike Rutter said the carrier’s income has tripled over the past year since it acquired Finnish Commuter Airlines. It plans to increase its route network, particularly to and from Denmark, he said.
From the end of October, Flybe (BEE) will operate (FIN)’s 12 Embraer EMB-190 regional jets on a range of (FIN)’s short-haul sectors, taking advantage of the (JV)’s lower cost base.
Air Berlin (BER) and Finnair (FIN) have extended a code share under which (BER) will place its code on (FIN) flights from Helsinki to Tallinn, Turku, Tampere and Oulu. (FIN) will place its code on (BER) flights from Oslo Gardermoen, Gothenburg, Stockholm, and Copenhagen to Berlin (BER) and from (CPH) to Dusseldorf (DUS) on October 28. (FIN) is also adding its code to (BER)-operated daily flights from (DUS) and (BER) to Abu Dhabi.
September 2012: It was a gradual but almost complete withdrawal from the Maintenance, Repair & Overhaul (MRO) sector. In February 2011, Finnair (FIN) axed its airframe heavy maintenance business blaming "inadequate cost-competitiveness" for the labor-intensive work. But the Nordic carrier still saw a chance for its engine & component overhaul shops to support its own fleet and third-party customers.
Some 15 months later, however, (FIN) decided to close those facilities and outsource work to Mubadala Aerospace (MRO) Network member, SR Technics (SWS) in Zurich. In April, (FIN) (COO), Ville Iho said the component and engine businesses were "too small in scale to be cost-efficient enough in the long term". (FIN) inked a 10-year contract with SR Technics (SWS), covering not only (MRO) for its (CFM) International (CFM56) engines and fleet-wide components, but also the sale and lease-back of equipment (including spare engines) through Mubadala's financing arm Sanad. In future, Finnair (FIN) will only conduct line maintenance in-house.
Finnair (FIN) has selected the International Aero Engines (IAE) (V2533-A5) engine for its fleet of five new extended-range A321s which will enter service from September 2013.
(FIN) selected the engine for its fuel efficiency performance, which should save about -300 tons of fuel per year per airplane, according to Airbus (EDS) test data. The engines also comply with (ICAO) and (EU) noise limitations.
(FIN) ordered the A321s in June 2010 to replace the four 757s currently in service. The new airplanes will be quieter and about -5% more fuel efficient, allowing for greater flexibility and interoperability between European scheduled and leisure flights, driving up airplane utilization and reducing per-passenger emissions.
(COO), Ville Iho said the (V2533-A5) engines would not only help reduce fuel costs, but also make “a substantial dent in our carbon profile. They are essential to remaining competitive in the tough market in European narrow body traffic, both scheduled and leisure.”
October 2012: Nordisk Aviation won an order from Finnair (FIN) to supply 55 kg UltraLite AKE cargo containers for wide body airplanes for delivery by the end of 2012.
Finnair (FIN) has reported a third-quarter net income of +€50.8 million/+$65.9 million, up more than >200% from a +€1.9 million profit reported in the year-ago period. (FIN) said these best-ever results were largely attributable to increased turnover, a high load factor, improved unit revenue, and cost cutting.
Turnover rose +7.1% to €650.3 million for the quarter, while expenses increased +3.3% to €603.5 million, producing an operating profit of +€48.9 million, up +77.2% from a +€27.6 million operating profit in the prior-year quarter.
Traffic rose +8.6% to 6.35 billion (RPK)s on a +3.4% increase in capacity to 7.81 billion (ASK)s, producing a load factor of 67.5% LF, up +3.2 points.
Yield rose +2.3% to 7.54 euro cents, as (RASK) increased +7.8% to 6.93 cents and (CASM) increased +6.1% to 6.60 cents. (CASK) ex-fuel was 4.43 cents, down -1.1%.
"This is the best quarterly result in Finnair (FIN)'s history. The improvement in the company's result is particularly positive considering that our most significant cost item, fuel, increased by some +25% year-on-year. Our more aggressive pricing and the continued optimization of our route network have resulted in improved load factors compared to 2011. The challenging market conditions have also reduced the intensity of competition on certain routes, which has benefited (FIN) somewhat,” (CEO), Mika Vehviläinen said.
(FIN) said a cost reduction program implemented last year, targeting -€140 million savings, had “progressed well” and (FIN) therefore expects to make a full-year operational profit in 2012, the first since 2008. (FIN) also announced a new cost cutting program targeting sustainable annual cost savings of -€60 million by the end of 2014.
“We are still far off from our long-term profitability target of 6% operating profit margin,” Vehviläinen said, pointing out that (FIN) is committed to fleet renewal investment worth $1.2 billion over the next few years. This investment is “vital for the implementation of (FIN)'s Asian growth strategy,” (FIN) said.
Vehviläinen also warned there were significant challenges ahead. “The fourth quarter is traditionally weaker than the third and continued uncertainty in the global economy makes the visibility for the rest of the year weak, particularly with regard to the demand for corporate travel.”
November 2012: (GA) Telesis Engine Services has reached and signed amended five-year collective labor agreements with all of the unions representing the Finnair (FIN) Engines Services (FES) employees which will become part of the newly formed (GA) Telesis Engines Services division in Helsinki. Currently, (FES) holds third-party agreements for the repair and overhaul of General Electric (CF6-80C2), (CFM) International (CFM56-5B) and (CFM56-5C), and Pratt & Whitney (PRW) (PW2000) engines.
December 2012: Finnair (FIN)'s basic strategy is well-known: (FIN) seeks to connect Europe with Asia via its Helsinki hub, which is geographically advantageous and offers connections of about 35 minutes. But within that strategy are different phases: first (FIN) looked at linking primary European cities with primary Asian cities and then secondary European cities with primary Asian cities. Now (FIN) is increasingly looking at a third phase: linking first and secondary European cities with secondary Asian cities.
It is in this phase where Finnair (FIN)'s newly announced service to Vietnam's Hanoi fits in. From 14 June 2013 (FIN) plans to link Helsinki and Hanoi with three weekly services for the northern summer season. It will be the only European carrier (excluding Aeroflot (ARO) in this criteria) to offer service to Hanoi, although other carriers, most recently (LOT) Polish Airlines, attempted it in the past. (CEO) Mika Vehviläinen noted the service is not a clear-shot victory but (FIN) does expect long-term success.
January 2013: Finnair (FIN) will operate 3x-weekly, Helsinki - Xi’an service between June 14 - October 26. (FIN) will operate 2x-weekly, Helsinki service to Palma de Mallorca (June 5), Antalya (June 7) and Tel Aviv (June 7) for the summer season, ending October 26.
Finnair (FIN) Cargo will launch weekly, Helsinki - Brussels - New York (JFK) - Chicago O'Hare freighter service in March 2013.
(FIN) (CEO), Mika Vehvilainen has resigned to take a new position as (CEO) of Finnish cargo and load handling specialist Cargotec. Vehvilainen will leave (FIN) on February 28 to take up his new role with Cargotec on March 1.
The outgoing (CEO) acknowledged there has been some “tough moments” during his leadership, but added: “I believe now is a good time to leave (FIN) in the hands of my future successor. The company is heading toward a positive financial result and we are in a better position to build the kind of (FIN) that upcoming major investments require.”
(FIN) has promoted (COO), Ville Iho to Deputy (CEO). He will lead (FIN) until a new (CEO) can be appointed. “Mr Iho has a broad and long experience at (FIN), having worked in the company since 1998 and in the executive board since 2009.”
The search for a new (CEO) has commenced, with the aim of a minimal transition period.
Earlier this month (FIN) denied reports that Vehvilainen had resigned. He joined (FIN) in 2009 and previously held senior leadership positions at Nokia Siemens Networks and Nokia.
February 2013: Finnair (FIN) reported a 2012 full-year net profit of +€11.8 million/+$15.9 million, reversing a -€87.5 million loss in the prior year. (FIN) said the performance demonstrated the success of its restructuring efforts.
Speaking to reporters and analysts, (FIN) President & (CEO), Mika Vehvilainen described the results as “quite satisfactory” and a “solid business performance,” noting this is (FIN)’s first full-year profit since 2007.
Vehvilainen will leave the airline February 28 to take a new position as (CEO) of Finnish cargo and load handling specialist, Cargotec.
Revenue rose +8.5% to €2.4 billion and (FIN) delivered an operating profit of +€44.9 million, reversing a -€60.9 million operating loss from 2011.
Traffic rose +9.5% to 23.6 billion (RPK)s on a +3.5% increase in capacity to 30.4 billion (ASK)s, producing a load factor of 77.6% LF, up +4.3% points.
Yield rose +0.9% to 7.3 cents as (RASK) rose +7.7% to 6.49 cents and (CASK) rose +2.3% to 6.58 cents. (CASK), ex-fuel, was 4.5 cents, down -3.6%. (FIN)’s fuel bill for the year was +€90 million higher than 2011.
In 2011, (FIN) set a -€140 million cost-savings target with the aim of achieving -€80 million in 2012. However, Vehvilainen said (FIN) achieved -€100 million of savings in 2012, leaving it with only €40 million of the original target for 2013.
“We are very satisfied with the restructuring. (FIN) today is much more focused as an airline,” Vehvilainen said, referring to the outsourcing of non-core functions such as the sub-contracting of regional flying to UK carrier Flybe (BEE).
Late last year, (FIN) added another €60 million to its target. Vehvilainen said (FIN) is still “planning and preparing” the details of this latest tranche of savings. He added that it should meet the €60 million target by the end of 2015.
He said sustainable profitability is “absolutely necessary” for (FIN)’s Airbus A350 investment, which is “vital for a competitive future.” (FIN)’s long-term objective is a 6% margin.
(FIN) is forecasting increased turnover in 2013, but at a “more moderate rate” compared to the last few years; it predicts another year of profit this year.
(FIN) has rolled out full-flat business (C) class seats across the majority of its long-haul A330 and A340 fleet. The Zodiac-made 'Vantage' seat is already installed on (FIN)'s four latest A330s. But (FIN) has now revealed that it will equip eight other airplanes in its 15-strong long-haul fleet with the premium class seat in 2014.
Three airplanes will not be updated, having been earmarked for replacement by the A350s that are due to be introduced in the second half of 2015.
The refurbishment program (worth around €29 million/$39 million) is set to begin in January 2014 and will be completed in the autumn of that year. It follows a cabin and service revamp initiative with new tableware and catering, which began in October.
(FIN) has ordered 11 A350-900s and taken options for eight additional airplanes.
March 2013: Finnair (FIN) will join the American Airlines (AAL)/British Airways (BAB)/Iberia (IBE) transatlantic joint venture (JV) at an unspecified date later this year. (FIN), a Oneworld (ONW) Alliance member like the three (JV) partners, said it will add its AY code to selected (JV) flights between North America and the European Union (eu), plus Norway and Switzerland. The AA, BA and IB codes will be added to Finnair (FIN)’s daily, Helsinki - New York (JFK) flights.
Including the (FIN) flights, the (JV) (launched in October 2010) will operate up to 102 daily flights between North America and Europe.
“Our participation in this venture will open up Northern Europe to a whole new network of potential travelers,” (FIN) Senior VP Commercial, Allister Paterson said.
(FIN) launched a two-month trial phase for in-flight wireless internet usage on Windows 8-powered tablets.
April 2013: Finnair (FIN) reported a first-quarter loss of -€15.8 million/-$20.6 million, a +18.3% improvement on the -€19.3 million loss recorded in the year-ago period.
(FIN) said the results were due to increasing passenger traffic, particularly in Asia and Europe, leading to a load factor of nearly 80% LF without any significant cutback in capacity.
Deputy (CEO), Ville Iho said: “(FIN)’s 90th anniversary year has started well. In January - March, our traffic measured by revenue passenger kilometers (RPK)s grew by over +5% year-on-year, despite capacity remaining at the level of the comparison period. Our operational result improved year-on-year, but showed a loss of -€17.7 million. The business environment in our industry continues to be characterized by intense competition, cost pressures and dramatic structural changes. It is important that we continue our determined effort to improve (FIN)’s competitiveness by seeking growth and reducing costs.”
Turnover was up just +0.2%, but passenger numbers increased +4% for the period. Cargo, however, saw a -15.4% downturn in volume, from 37,892 tonnes during the year-ago period to 32,049 tonnes during the first quarter. Cargo revenue was also down -0.2%. (ASK)s grew +0.8% from 7.6 million to 7.7 million, while (RPK)s were up +5.2% to 6.1 million from 5.8 million in the 2012 first quarter.
(CASK) was up +0.9% from 6.51 cents/(ASK) (4.48 excluding fuel) to 6.57 (4.45 cents/ASK excluding fuel). “By the end of March, we had achieved permanent annual savings of €119 million, out of the total target of €140 million we set in August 2011 for our structural change and cost reduction program,” Iho said. “Despite the good progress made in the implementation of the program, achieving the overall target will require a great deal of work and difficult decisions.”
Negotiations are underway concerning “significant savings in personnel costs” necessary to achieve additional cost savings of -€60 million announced in October 2012. Iho said the outlook for the rest of the year remains unchanged and (FIN) is still hoping to turn a profit by year end. “The first quarter has given us a solid foundation for building our future. We face cost challenges, but we also have a clear direction and a growth story,” Iho said. He stressed, however, that the uncertain economic outlook in Europe, high fuel prices and currency fluctuations continue to present challenges.
Iho pointed out that, following the resignation of President & (CEO), Mika Vehviläinen in January, responsibility for seeing through the cost-cutting program and returning (FIN)the airline to profit would rest with Pekka Vauramo, who takes over at the beginning of June.
Oneworld (ONW) Alliance carrier, Finnair (FIN) has raised €53 million/$69.2 million from the disposal of its entire 4.69% stake in Norwegian Air Shuttle (NWG), which it has held since 2007. (FIN) acquired the (NWG) shareholding through a share swap when its Swedish subsidiary, FlyNordic was sold to Norwegian (NWG). Under this deal, (FIN) had the option to increase its stake in (NWG) to 10% until 2008.
However, it has now sold its entire holding of 1,649,862 shares for €53 million, generating a capital gain of about +€34 million, which will be posted as financial income in the airline’s 2013 second-quarter results. “The proceeds from the sale will be used for the development of Finnair (FIN) and implementation of its growth strategy,” (FIN) said.
When asked why (FIN) has decided to sell its shares at this stage, a (FIN) spokeswoman said: “We felt that this was the right time for us to sell.”
Russia and Finland authorities have agreed to designate second carriers on the Moscow - Helsinki route. The first designated airline from each side has “14 frequencies per week” and the second designated airline from each side “will have seven frequencies per week,” effective from the (IATA) winter season 2013 - 2014, according to a statement by Russia’s Federal Air Transport Agency, Rosaviatsia.
Currently, only Aeroflot (ARO) and Finnair (FIN) are allowed to operate flights between these cities. (FIN) operates nine flights per week, seven of which are under a code share agreement with (ARO). (ARO) performs 14 flights per week, seven of which are a code share.
Over the last year, Russia has liberalized bilateral agreements with Italy and France, adding more carriers on routes connecting Moscow with Rome, Milan, Paris, and Nice. Russia’s Transaero Airlines (TRX) won the rights to fly from Moscow to Rome, Milan and Paris, while Rossiya Airlines (SDM), a member of the Aeroflot (ARO) group, launched flights from Moscow to Nice. French Aigle Azur (AZU) was allowed to launch flights from Paris and Nice to Moscow; it has already launched the Paris route and will launch the Nice flight later this year. Italian Blue Panorama (BPA) started Rome - Moscow flights at the beginning of April, while Meridiana Fly (ALS)/(EUY) was designated at Milan - Moscow.
Finnair (FIN) has named Hong Kong Cargotec executive, Pekka Vauramo as its new (CEO). Former (CEO), Mika Vehvilainen left (FIN) to become (CEO) of Cargotec.
(FIN) said Vauramo’s experience in Asia would help (FIN)’s efforts to expand routes to the region. The Asian network had become essential for (FIN)’s development in the past years.
(FIN) in 2012 reported its first full-year profit since 2007.
June 2013: Newly appointed Finnair (FIN) (CEO), Pekka Vauramo sees opportunities to grow (FIN) and expects passenger numbers to and from Asia to double by 2020.
July 2013: Finnair (FIN) begins seasonal 3x-weekly, Helsinki - Tromso January 1 - March 28 Embraer E190 service, operated by Flybe (BEE) Finland.
August 2013: Finnair (FIN)’s operational result fell by EUR10 million in 2nd quarter 2013 compared with the same period of 2012. Moreover, (FIN) lowered its full year revenue outlook from expected growth to “approximately at the 2012 level,” due to the weak Japanese yen. Nevertheless, there are also some more positive signs for new (CEO), Pekka Vauramo.
First, without the impact of its fuel hedging program, (FIN)'s operational result would have improved by +EUR12 million. Second, its strategic focus on carrying passengers between Europe and Asia was reflected in strong traffic growth and market share gains in these two regions. Third, Finnair (FIN)’s cost reduction program reached its -EUR140 million savings target six months ahead of schedule and the company remains committed to achieving a further EUR60 million in savings by 2014, mainly through labor productivity improvements.
Finnair (FIN) has selected SR Technics (SWS) to perform heavy maintenance checks on two A320s. The "D"-checks, plus painting, are being carried out at SR Technics (SWS)' Malta facility, which specializes in narrow body Maintenance Repair & Overhaul (MRO).
In July 2012, Finnair (FIN) awarded Mubadala-owned SR Technics (SWS) a 10-year contract to maintain its (CFM) International (CFM56) engines and provide component support across its Airbus (EDS) and Embraer (EMB) fleet.
Finnair (FIN) operates nine A319s, 12 A320s and six A321s, all (CFM56)-powered. It has five International Aero Engines (IAE) (V2500)-powered A321s on order. It also operates four 757s, eight A330s and seven A340s, and has 11 A350s on firm order. Its airplane finance arm owns five Embraer E170s (one operated by Aeroméxico (AMX), two by Flybe Nordic (FCA) and two by Kenya Airways (KEN)) and twelve Embraer E190s, all flown by Flybe Nordic (FCA), which also has three Finnair (FIN)-owned ATR 72s in service.
September 2013: Finnair (FIN) is entering its "second Asia Phase" and is eyeing more joint ventures (JV)s.
(FIN), the launch customer for the A321 equipped with Sharklets, has taken delivery of its first of five A321s on order. The airplane will eventually replace (FIN)’s existing fleet of 757s, making it an all Airbus (EDS) operator. The A321 was officially handed over to Ville Iho, (FIN) Chief Operating Officer (COO) at Hamburg, Germany. “We are extremely proud to receive the world’s first A321 equipped with Sharklet fuel saving wing tip devices. This new airplane will fit perfectly into our fleet and will contribute to optimizing our operating costs, whilst also reducing our environmental footprint.”
The A321 is powered by International Aero Engines (IAE) (V2533-A5) engines and features an additional fuel tank, giving a range of 5,741 km; it is Extended Twin-engine OPerationS (ETOPS)-certificated for 180 minutes.
Finnair (FIN) will take delivery of a total of five Sharklet equipped A321s. It currently operates a fleet of 40 airplanes (25 A320 family airplanes and 15 A330s/A340s). (FIN) was the first airline to commit to the A350 XWB with a total of 11 airplanes on order and holds eight options.
The A321 is the largest member of the best-selling single aisle A320 Family. To date, more than >9,800 airplanes from the Family have been ordered and over >5,700 delivered to more than >390 customers and operators worldwide.
Finnair (FIN) has entered into a 12-year agreement with Japanese airplane leasing company (NBB) for the sale and leaseback of two new A321 sharklet-equipped airplanes. The transaction was arranged by USA-based lessor (BBAM).
(FIN) (CFO), Erno Hildén said (FIN)’s “strong balance sheet” puts it in a position to “flexibly choose the most economical financing sources when renewing our fleet—and at the same time optimize the balance between owned and leased airplanes.” (FIN) has ordered five A321 sharklet-equipped airplanes from Airbus (EDS). The first airplane was delivered September 5. Two more airplanes will be delivered in the last quarter of 2013 and the final two in the first quarter of 2014.
The sale and leaseback deal concerns the first two airplanes. “The new A321s will replace the four 757 airplanes currently used in (FIN)’s leisure traffic,” it said.
SR Technics (SWS) has been selected by Finnair (FIN) to provide integrated component services for five new A321 narrow bodies. The Mubadala-owned Maintenance Repair & Overhaul (MRO) provider already provides component support for A320-family and Embraer jets in the Finnair (FIN) fleet, plus engine services for A320s and A340s.
(FIN)'s active fleet comprises nine A319s, 10 A320s, seven A321s, eight A330s, seven A340s and four 757s.
One of its A321s entered service this year, and is leased from (BBAM) (BBB). Two additional new A321s are to be delivered directly to Finnair (FIN) this year, and two more next year.
October 2013: Finnair has reported a third-quarter net profit of +€23.5 million/+$32.4 million, down -54.7% from +€51.9 million in the same period last year.
(FIN) has received the green light to be (JV) included in British Airways (BAB) and (JAL)’s Japanese joint venture after announcing plans to join the partnership in July. Finnair (FIN) said Japan’s Ministry of Land, Infrastructure, Transport & Tourism has granted it the required antitrust immunity. “The agreement will allow all three airlines to cooperate commercially on flights between Europe and Japan. The new joint business is expected to be launched next spring,” Finnair (FIN) said.
The Oneworld (ONW) Alliance partners plan to use the revenue-sharing joint venture (JV) to expand their presence within, to and from Japan.
Finnair (FIN) flies daily from Helsinki to Tokyo, Osaka and Nagoya. (FIN) will offer summer 3x-weekly, Helsinki - Toronto A330 service June 1 - September 21, 2014.
Finnair (FIN) celebrates its 90th birthday on November 1st, 2013, making it one of the world’s oldest airlines. It also has one of the newest (CEO)s, Pekka Vauramo, who joined on June 1st, 2013.
(FIN)’s strategic niche is based on using its Helsinki hub to connect Europe with Asia. While it saw traffic growth and market share gains in both regions in the 3rd quarter 2013, the weakness of the yen led to a collapse in Asia revenues. The approval on October 16th, 2013 of (Finnair (FIN)’s application to join the (BAB)/(JAL) revenue-sharing joint venture (JV) on routes between Europe and Japan could not have come at a more opportune moment. The resulting coordination of pricing and schedules should help to counter revenue weakness.
Nevertheless, the fall in (FIN)’s 3rd quarter profits and its consequent profit warning for the full year highlight the scale of the challenge facing Mr Vauramo. Although (FIN) achieved a further reduction in unit costs, he will need to push through more cost cuts, while simultaneously seeking to shore up unit revenues.
(FIN) has closed the sale and leaseback of a new A321 delivery with a Japanese aircraft leasing company Nomura Babcock & Brown (NBB) in a transaction arranged by USA-based lessor (BBAM) (BBB). The airplane (5803) will be leased for a period of 12 years.
(FIN) ordered five A321s from Airbus (EDS) in 2010. It financed the first delivery in September with (NBB) through a similar sale and leaseback transaction. An additional A321 will be delivered in December this year, while the final two are scheduled for the first quarter of 2014.
November 2013: Finnair (FIN) has downgraded its financial guidance for the year in the face of potential strike action that could last until November 23. With the Finnish Flight Attendants Association (SLSY) and the Finnish Aviation Union (IAU) threatening action on alternate days during that period (which the airline said would “paralyze Finnair (FIN)’s traffic almost completely”), (FIN) now expects to make an operational loss for 2013. It said preparations for the possible strikes had pushed turnover to below 2012 levels.
Its previous guidance, issued October 24, suggested it was “possible” Finnair (FIN) would not make a profit in 2013. In its new guidance, (FIN) said: “If the strikes are carried out to the extent threatened, they will result in further direct revenue losses of at least -€60 million/-$81 million and decrease (FIN)’s operating result by at least -€30 million. In addition, unit costs excluding fuel ((CASK) excluding fuel) will increase from 2012. If the strikes are avoided, unit costs excluding fuel are expected to decrease compared to 2012.”
Negotiations with the two unions are still ongoing and (FIN) is hopeful an agreement can be reached to avoid the strike, but it has already begun canceling flights “to avoid congestion at Helsinki Airport in the event of a strike.”
Fortunately an 11th hour agreement was reached and traffic was expected to return to normal within a few days. (FIN) said it has concluded a new collective labor agreement with the unions and has agreed on a schedule and process for separate, company-specific negotiations related to (FIN)’s cost-savings targets. Negotiations will begin November 25 and could last through April 28, 2014. If savings targets are met, cabin (CA) staff will be protected from layoffs for two years.
(FIN) and the (IAU) have already made progress in reaching a company-specific labor agreement for technical (MT) staff. In addition, negotiations continue between (FIN) and the (IAU) on company-specific labor agreements for ground handling personnel.
(FIN) (CEO), Pekka Vauramo said: “Avoiding the strikes in the final stages of negotiations is excellent news for our customers, although it is very unfortunate that the strike threats and the flight cancellations caused by the threats have caused uncertainty and harm to our passengers. Our cost-savings and productivity targets for personnel are unchanged, but we can reach them through multiple means that are acceptable to all. We now need to advance rapidly with this work.”
He said cost savings are important to the airline’s future and that reaching an agreement on the savings negotiation process is “a critical step forward.” He said (FIN) “deserves a chance to grow and survive in the tight international competition.”
(FIN) is looking to make permanent total savings of -€200 million/-$269.2 million, compared to its 2010 cost base, by the end of 2014. This includes a -€60 million cost-savings program announced in October 2012, which relates primarily to staff-related costs.
December 2013: The Association of Support Service Industries (PALTA) and the Finnish Air Line Pilots’ Association (SLL) have reached a new collective labor agreement for Finnair (FIN) pilots (FC).
The new collective labor agreement becomes effective February 1st, 2014 and is in line with the central pact for employment and growth.
“The three-year contract includes a crisis clause similar to the ones in the collective labor agreements, which were reached with other employee unions this fall. According to the crisis clause, in the coming months Finnair (FIN) will negotiate with (SLL) on cost savings. If an agreement on the savings is reached by June 13, 2014, Finnair (FIN) will offer pilots (FC) job security for two years.”
The savings negotiations will begin January 9, 2014.
(Finnair (FIN) Finnair has signed a memorandum of understanding (MOU) with (GE) Capital Aviation Services (GECAS) (GEF) on the sale and leaseback of two A330s and two A350s, valued at €320 million/$440 million. “The sale and leaseback agreements for the two A330 airplanes are expected to be concluded in the first half of 2014 and for the two A350 airplanes in the second half of 2015, when the first two A350s ordered by (FIN) are delivered. The lease term for all four airplanes is 12 years on average and the lease terms have extension options.”
Finnair (FIN) is replacing its A330 and A340s with A350s. It has 11 A350s on firm order and options on a further eight airplanes. The proceeds of the sale and leaseback deal will be used to fund future fleet investments.
(FIN) has signed a memorandum of understanding (MOU) with global aircraft leasing and financing company, Novus Aviation Capital for the sale and leaseback of two A330 airplanes. The value of the deal is approximately €110 million/$151 million).
The (MOU) follows a similar deal with (GE) Capital Aviation Services (GECAS) (GEF) earlier this month.
In addition to two A330s, the (GECAS) deal also included two of the A350s aircraft (FIN) has on order.
Both deals are part of (FIN)’s long-haul fleet renewal program, in which the current A330 and A340 fleet will be replaced by the new generation of A350 airplanes. The proceeds will be used to finance future fleet investments. (FIN) has 11 A350s on order, with options on an additional eight airplanes.
The sale and leaseback agreements are expected to be concluded in the first half of 2014 and the lease term is 12 years with extension options.
Finnair (FIN) said the two financial arrangements as a whole are not expected to have a significant impact on earnings in 2014 and 2015.
January 2014: Finnair (FIN), the flag carrier and largest airline of Finland, commenced operations to its second Norwegian destination on January 1st, launching twice-weekly flights from its Helsinki (HEL) hub to Tromso (TOS) in Norway. Operated on behalf of the Oneworld (ONW) Alliance member flybe Nordic, using one of its 100Y-seat EMB-190s, the twice-weekly services will be flown on Mondays and Wednesdays. The seasonal route will operate until March 28th and will face no direct competition.
Finnair (FIN) is considering using Vienna as a hub to leisure destinations in Southeastern Europe, connecting with Oneworld (ONW) Alliance affiliate member and airberlin (BER) subsidiary, FlyNiki (NKI).
(FIN) Director Central Europe, Jan Pellinen said in Vienna (FIN) has not considered the Austrian market over the last few years due to its restructuring, “but now we want to invest in our presence here again. The idea is to use Vienna as a connecting point to FlyNiki (NKI) leisure routes.”
(ONW) Alliance member, Finnair (FIN) operates 2x-daily, Helsinki - Vienna flights. FlyNiki (NKI) has established a hub in Vienna to destinations such as Greece, connecting with airberlin (BER). “Our hub operation works very well. On routes to leisure destinations like to Greece, we enjoy load factors of more than >90%,” (NKI) (CEO), Christian Lesjak said.
Vienna International Airport last year opened the first phase of its dedicated terminal for airberlin (BER) and subsidiary, FlyNiki (NKI), as well as for its Oneworld (ONW) alliance partners.
Pellinen also said Finnair (FIN) can invest in markets again and has “increased our flights from Dusseldorf as well as from Zurich to Helsinki from double daily to 4x-daily flights.”
In addition, Helsinki airport is undergoing a major €900 million/$1.2 billion investment, which includes a new premium lounge.
Finnair (FIN) is working to establish a third bank (a third wave for takeoffs and departures) at its Helsinki hub. Its two banks, which currently operate at 5 pm and about midnight, are already operating at high levels, connecting Europe with its 13 destinations in Asia.
February 2014: Finnair (FIN) has reported full-year net profit of +€11 million/+$15.1 million for 2013, up +5.1% year-over-year, due to the company’s April 2013 sale of its entire holding of shares in Norwegian Air Shuttle (NWG) (which brought in +€34 million).
Finnair (FIN) increases 4x-daily, Helsinki - London Heathrow to 5x-daily A321 service on March 30. (FIN) begins 2x-weekly, Helsinki - Miami A340 service between December 16, 2014 - March 21, 2015. Beginning January 3, 2015 the service becomes 3x-weekly.
Finnair (FIN) has nominated former (bmi) (BMA) (CEO), Nigel Turner to its board, in a move slated for formal approval March 27. Turner was appointed as (CEO) of (BMA) in October 2004 and ran the airline until late 2009, when he ceded the role to Wolfgang Prock-Schauer. Turner is now Deputy Chairman of lessor Jetscape (JTS), a member of the board for (ATM) provider (NATS) and Deputy Chairman of (NATS) owner, The Airline Group.
Finnair (FIN) has also appointed Jaana Tuominen, (CEO) of catering firm the Paulig Group, to its seven-member board that is headed by Chairman, Klaus Heinemann.
Finnair (FIN) has made further progress with its fleet renewal financing, firming up a memorandum of understanding (MOU) with (GECAS) (GEF) for the sale and leaseback of two Airbus A330s. The deal finalizes part of a commitment inked in December between (GEF) and (FIN), although the sale and leaseback on a pair of A350s, which were included in the (MOU) is still under negotiation.
“Agreements for these two [A350s] are expected to be concluded in second half (H2) 2015, when the first two A350s ordered by (FIN) are delivered,” (FIN) said in a stock market disclosure. This is in keeping with the timelines given in December.
The lease term for all four airplanes is 12 years on average, with extension options. It values the contract for the four airplanes at around €320 million/$440 million and proceeds from the deal will be used to fund future fleet investments.
(FIN) is replacing its A330 and A340s with A350s. It has 11 A350s on firm order and options on a further eight.
Recently, (FIN) has concluded sale and leaseback deals on two A321s with Japanese lessor (NBB) and on a further three with USA-based Jackson Square Aviation. The sharklet-equipped A321s are being brought in to replace four 757s.
It also has an (MOU) in place with Novus Aviation Capital for the sale and leaseback of two A330s. This deal is slated for finalization by the end of the first half.
March 2014: Finnair (FIN) and S7 Airlines (SBR) will begin code sharing April 26 on services between Helsinki and Moscow’s Domodedovo International Airport, as well as to selected onward S7 (SBR) services from Domodedovo to Novosibirsk, Kazan, Rostov-on-Don, Samara, Ufa, and Yekaterinburg.
In return, S7 (SBR) will add its flight code to selected Finnair (FIN) services from St Petersburg and Yekaturinburg to Helsinki, and to selected onward Finnair (FIN) services to Joensuu, Kuopio, Oulu, Rovaniemi, Tampere, Turku, and Vaasa.
April 2014: Finnair ((IATA) Code: AY, based at Helsinki Vantaa) (FIN) is to launch Krabi, Thailand's first intercontinental scheduled flights with a twice weekly service from Helsinki Vantaa beginning December 10. The launch also marks the route's transition from a charter flight into a scheduled one. Service is on board an A340-300. (FIN) will also convert its Helsinki - Phuket route to scheduled service at the same time.
US Airways (AMW)/(USA) has joined American Airlines (AAL), British Airways (BAB), Iberia (IBE) and Finnair (FIN) in their transatlantic joint venture (JV).
As part of the joint business (established by Oneworld (ONW) global alliance partners (AAL), (BAB) and (IBE) in October 2010) the airlines can cooperate commercially on transatlantic flights. The joint venture also includes a revenue-sharing agreement in which member airlines have permission to coordinate schedules and pricing on North Atlantic routes.
Speaking on a panel at the USA Chamber of Commerce Foundation’s Annual Aviation Summit in Washington DC, International Airlines Group (IAG) (CEO), Willie Walsh said the addition of (AMW)/(USA), which merged with (AAL) at the end of 2013, provided “unmatched” capability on transatlantic routes. (BAB) is part of the (IAG) Group.
(AAL) (CEO), Doug Parker, who was a panelist with Walsh, said he was “extremely pleased with the foundation that has been established” since the merger was completed. He said the merged airline’s relationship with the Oneworld (ONW) Alliance was an important part of his plan to restore (AAL)’s position as “the best airline in the world.”
May 2014: The Finnair (FIN) Group reported a first-quarter net loss of -€28.1 million/-$39 million, widened from a loss of -€15.7 million in the same period last year.
(FIN) acknowledged that the first quarter is typically its weakest, but added “this year, the period was particularly difficult for us.” A “continued strong contraction” in leisure traffic volume, unfavorable exchange rate fluctuations (particularly in the Asian market, and a decline in home market demand, particularly business travel) were key contributing factors.
(CEO), Pekka Vauramo said: “Our result for the first quarter was very weak: Our operational result declined significantly and showed a loss of -€34.2 million. This indicates clearly that our cost-reduction programs are absolutely essential. Continuing with cost-reduction measures is inevitable and vital for Finnair (FIN)’s future.”
Turnover declined -8.4% to €543.3 million year-over-year, but operational costs, ex-fuel, decreased -5.5% to €421 million. Fuel costs, including hedging and costs incurred from emissions trading, were down -5% year-over-year to €161 million. Personnel costs fell -11.4% to €90 million, due to staff cuts implemented after the comparison period.
Passenger numbers were up +2.5% for the quarter, reaching 2.2 million, but passenger load factor was down 0.9 point to 78.7% LF year-over-year. Capacity (ASK)s were down 2.9% to 7.4 billion and traffic (RPK)s dropped -4% to 5.9 billion, compared to the year-ago quarter.
Vauramo said: “It was a major disappointment that our negotiations with the Finnish Aviation Union (IAU), the Trade Union (PRO) and the Finnish Flight Attendants Association (SLSY) (under the crisis clause included in the agreements concluded in November 2013 in line with the Finnish Employment & Growth Pact) did not lead to any agreement. Negotiations with the Finnish Pilots Association (SLL) are still ongoing. As Finnair (FIN) simply cannot bear the current cost structure, I hope we can still reach a mutual agreement on how to save costs. Having to rely on unilateral measures is the final and least pleasant alternative, and we hope to avoid it.”
He said that, in large part, future growth depended on achieving cost reduction targets. “Only a profitable (FIN) can grow,” Vauramo said.
The outlook for 2014 remains unchanged, with the “ongoing uncertain economic outlook in Europe and Asia contributing to weak consumer demand in some of our main markets.” Although air traffic is expected to grow moderately in 2014, (FIN) said it would not be able to benefit from that growth without progress in its cost savings program and its target cost structure in place.
The airline expects its 2014 turnover to closely match 2013 levels, with fuel costs set to remain high.
It said: “The outcome of (FIN)'s ongoing employee consultations and cost-saving negotiations will have a significant impact on financial performance in 2014, and therefore the company will reconsider giving guidance for its full-year 2014 financial performance after the savings negotiations have been concluded.”
Finnair (FIN) will decide in June whether to go ahead with layoffs and outsourcing, after talks to avoid staff cuts ended without a solution. “Finnair (FIN) is financially in a serious situation and needs to make difficult decisions in order to survive. After the long savings negotiation period, we still hoped to find in the co-determination negotiations solutions, that would allow us to avoid layoffs and outsourcing. Unfortunately, this did not happen,” Finnair (FIN) (CEO), Pekka Vauramo said.
At the end of March, (FIN)’s senior management warned the airline desperately needed to restructure, involving possible cuts among its administration, support and cabin crew (CA) personnel. Launching an open attack on (FIN)’s 1,500 cabin crew (CA), Vauramo warned he might have to outsource jobs if an agreement on cost savings was not reached by the end of April.
Finnish cabin crew (CA) union (SLSY) put forward a proposal to cut -€2.7 million/-$3.7 million in labor costs, but Vauramo said it was "too far from the savings that we need.”
“During June, Finnair (FIN) will make decisions based on the co-determination negotiations. The reduction need was estimated to be approximately 540 man-years. Options include carrying out layoffs, temporary layoffs, shifting to part-time work, or a combination of these,” (FIN) said.
Finnair (FIN) plans to use contract cabin crew (CA) on three long-haul routes this year, although it plans to extend this to more than >10 routes in the next stage. It has also outlined plans to set up a cabin crew (CA) subsidiary, which would sell its services to Finnair (FIN).
However, the talks have yielded some possible results within Finnair (FIN)'s administrative and support business, which employs 800 staff. (FIN) is aiming to slash -€6 million from its administration and support costs, and it had previously indicated that approximately 140 jobs were under threat, but this could be slimmed following the negotiations. “The final personnel impact will be determined after each function considers the measures to be implemented as a result of the co-determination process,” it said.
Talks at Finnair (FIN) Flight Academy’s simulator maintenance and internal bank service are continuing.
(FIN) (FIN) commenced seasonal operations to its second Turkish destination on April 26th, launching weekly flights (Saturdays) from its Helsinki (HEL) hub to Gazipasa (GZP). The 2,723 km sector will be operated until October 25th, utilizing (FIN)’s 138-seat A319s. There is no competition on this new airport pair. In addition, Finnair (FIN) also serves the Turkish market with twice-weekly flights to Antalya.
Finnair (FIN) will begin 3x-weekly, Helsinki - Phuket service on November 14 and 2x-weekly – Krabi service on December 10, both with Airbus A340s. It will also increase Airbus A330 service to Nagoya from 4x- to 5x-weekly next winter. Tromsø 3x-weekly Embraer E190 service will be resumed next winter from January 1 - March 28.
(FIN) has agreed to sell three of its Embraer EMB-170s to USA lessor Infinity Aviation Capital in a deal valued at $40 million. The EMB-170s, which are owned by (FIN)’s Fleet Management subsidiary, Finnair Aircraft Finance, are currently placed with other operators. Kenya Airways (KEN) has two of the airplanes, while the third is with Aeromexico Connect. However, by the time the deal closes in the second half of 2014, all three will be operated by Aeromexico Connect.
“The transactions are a part of (FIN)’s aim to focus on its core business. After the sale, Finnair Aircraft Finance owns only airplanes operated by (FIN) or its affiliated company, Flybe Finland.”
The sale of the three airplanes will not have significant impact on Finnair (FIN)’s 2014 results.
Finnair (FIN) has finalized the sale and leaseback of two A330 airplanes. The value of the arrangement covering both airplanes is approximately €110 million/$150.6 million. SkyWorks Capital acted as financial advisor to (FIN) on this transaction.
June 2014: Finnair (FIN) has revised its financial forecast for the year, estimating that its 2014 turnover will be “significantly lower” than in 2013. (FIN) said: “The ongoing uncertain economic outlook in Europe and Asia is contributing to weak consumer demand in our main markets.”
Although it acknowledged “air traffic is expected to grow moderately in 2014” in a warning to unions, it cautioned: “Finnair, however, will not be able to benefit from that growth without progress in its cost-savings program and its target cost structure in place.” (FIN) said the outcome of (FIN)’s ongoing employee consultations and cost-saving negotiations would have “a significant impact on financial performance in 2014,” and therefore would “reconsider giving guidance for its full-year 2014 financial performance after the savings negotiations have been concluded.” On top of weaker-than-expected unit revenue development, (FIN) warned fuel costs are expected to remain high.
In its previous guidance, issued with its first-quarter financial results in May, (FIN) expected its 2014 turnover “to be close to the previous year’s level.”
(FIN) begins 3x-weekly, Helsinki - Nizhny Novgorod (July 25), - Samara (August 7) and – Kazan (August 18) service.
Finnair (FIN) has postponed its deadline for reaching an agreement with the Finnish Air Line Pilots Association (SLL) so it can get closer to its cost-savings target. The talks, which are over pay and efficiency, were due to be concluded June 13. “Despite progress, we have not yet agreed how to reach a -€17 million/-$23 million savings target. We wanted to give the negotiators some more time, because progress has been made, and we hope that we can still reach a solution,” (FIN) (COO), Ville Iho said.
If the cost-savings target is met, (FIN) is offering pilots (FC) a two-year protection against layoffs. “The negotiation parties are willing to try to get closer to a solution in line with the savings target. Therefore the negotiation time has been extended,” (FIN) said.
Finnair (FIN) is wet leasing a Boeing 767 and 787 to temporarily replace one of its Airbus A330 airplanes, which is undergoing extra maintenance. Spanish operator, Privilege Style (PVG) will operate Boeing 767 Helsinki - New York (JFK) service from June 20 until the end of the month. (LOT) Polish Airlines plans to operate the route with a 787 from July 1 - 16.
Finnair (FIN)’s A330 is expected to return to service after mid-July.
“One wide body aircraft missing from our fleet affects our operations. As this is a wet-lease agreement, all crew members are from Privilege Style (PVG) and (LOT), but in the cabin there’s one Finnair (FIN) purser available,” (FIN) (COO) Ville Iho said.
July 2014: Finnair (FIN), the flag carrier and largest airline of Finland, commenced operations to its third French destination on June 24th, launching twice-weekly flights (Tuesdays and Saturdays) from its Helsinki (HEL) hub to Biarritz (BIQ). The 2,581 km sector will be operated by (FIN)’s 138-seat A319s until August 9th and will face no competition from other airlines. Finnair (FIN) already flies to Paris (CDG) with 37 weekly flights and to Nice four times weekly from Helsinki.
Finnair (FIN) and US Airways (AMW)/(USA) have launched code sharing on transatlantic services. (FIN)’s flight code will be added to (AMW)/(USA) flights from Charlotte to Frankfurt, Rome, Dublin, London, Manchester, Barcelona, Lisbon, Brussels, Madrid, and Paris. From Philadelphia to Frankfurt, Zurich, Venice, Munich, Rome, Dublin, London, Manchester, Lisbon, Madrid, Barcelona, Brussels, Paris, Athens, Glasgow, Shannon, Edinburgh, and Amsterdam. Also on domestic New York (JFK) service to Charlotte and Phoenix.
US Airways (AMW)/(USA) can book (FIN) flights from New York, Toronto, and Miami to Helsinki Airport and further. The (AMW)/(USA) code will be added to the (FIN) flights from Helsinki to Stockholm, Oslo, Copenhagen, Gothenburg, Oulu, Paris, Brussels, Munich, Frankfurt, Zurich, and London. Both carriers participate in the Oneworld (ONW) alliance.
(FIN) commenced operations to its fourth destination in Russia on July 25th, launching thrice-weekly flights from its Helsinki (HEL) base to Nizhny Novgorod (GOJ). The 1,196 km sector will be operated utilizing the Oneworld (ONW) Alliance member’s 100-seat E190s. There is no competition on the new airport pair. In addition, (FIN) is also serving the Russian market with twice-daily flights to St Petersburg, nine weekly operations to Moscow Sheremetyevo, and four weekly services to Ekaterinburg.
Finnair (FIN) has nominated Riku Aho as the Managing Director of Finnair Aircraft Finance and its subsidiary Finnair ATR Finance from July 1. Aho previously served as Assistant VP Aircraft Finance.
August 2014: Finnair (FIN) is expecting a "significant" deterioration to its full-year turnover and profitability, after posting a second-quarter net loss of -€23.9 million/-$32 million, reversed from a +€18.1 million net profit it posted in the year-ago period.
Finnair (FIN) is aiming to conclude cost-savings negotiations with its pilots (FC) by September 7th and is proceeding with plans to outsource 540 cabin crew (CA) positions.
Finnair (FIN), the flag carrier and largest airline of Finland, commenced operations to its fifth destination in Russia on August 7th, launching thrice-weekly flights from its Helsinki (HEL) base to Samara (KUF). The 1,717 km sector will be operated by Flybe Finland’s 100-seat E190s and will face no competition from other airlines. The Oneworld (ONW) Alliance member is also serving the Russian market with flights to St Petersburg, Moscow Sheremetyevo, Ekaterinburg, and Nizhny Novgorod.
(FIN), which in the previous week ventured to Russia for destination #5, continued to expand its presence in the Russian market, commencing operations from Helsinki (HEL) to its sixth destination ( Kazan (KZN), on August 18th. The 1,508 km sector to the capital and largest city of the Republic of Tatarstan will be operated thrice-weekly, using Flybe Finland’s 100-seat E190s and will face no competition from other airlines. (FIN) is also serving the Russian market with flights to St Petersburg, Moscow Sheremetyevo, Ekaterinburg, Samara, and Nizhny Novgorod.
Finnair (FIN) announced ten new routes from Helsinki for summer 2015: Paphos, weekly, on March 31; Mallorca, weekly, on April 11; Bodrum, weekly, on April 12; Heraklion, Crete, 2x-weekly, on April 17; Chania, Crete, 6x-weekly, on April 18; Rhodes, 5x-weekly, on April 19; Sicily, weekly, on May 6; Kos, weekly, on May 9; Amalfi Coast, 2x-weekly, on May 28; Innsbruck, weekly, on June 14.
While it is home to an estimated population of 5.5 million, Finland covers an area of almost the size of Germany, making it the most sparsely populated country in the European Union (EU). Considering the majority of the population is concentrated in the southern regions of the country, there is no surprise that Finland’s main gateway at Helsinki commands the majority of Finnish traffic, having recorded over >14 million passengers in 2013. However, according to "Finavia," Finland currently offers another 24 commercial airports providing scheduled airline services that handled a combined 3.7 million passengers last year. Overall, Finnish airports have decreased their combined annual passengers by a modest -0.4% since anna.aero last looked at this country market three years ago.
Analysis of data facilitated by "Finavia" reveals that the country’s airports handled over >19 million passengers last year, representing a decrease of -0.9% when compared to 2012 figures. At +2.8%, international traffic experienced growth, while the domestic sector posted a decrease of -10% when compared to the previous year.
Looking at passenger data between 2003 and 2013, the combined traffic of the 25 Finnish airports grew with an average annual growth rate (CAGR) of +3.4%, with the international market outperforming the domestic sector. Noteworthy is the fact that the international air travel has almost doubled, while the domestic one has recorded -9.2% decline last year, when looking back 11 years to 2003. In addition, Helsinki’s share of the country’s air traffic has actually increased from 74% in 2003 to 80% in 2013, as Finnair (FIN) continues to attract connecting traffic, in particular on flights from Europe to Asia.
In the first seven months of 2014, for which traffic data is already available, the Finnish airports noted an increase of +3.6% (2.6% — domestic, 3.9% — international) when compared to the corresponding period of 2013, with over >11 million passengers achieved until the end-July. If the country’s traffic continues on this growth trajectory, it will achieve a new record high in 2014 (close to 20 million passengers, based on anna.aero forecasts).
Looking at schedules for this August, the top 12 carriers serving the Finnish market account for 94% of all weekly seats on international operations, -1% fewer that in the corresponding month of 2013. The flag carrier, Finnair (FIN) remains by far the dominant carrier on international flights, as it commands 58% of the market, being almost five times bigger than the second operator, Norwegian (NWG). As a Oneworld (ONW) Alliance member, which carried 9.3 million passengers in 2013 (growing by +5.6%), (fin) operates a total of 57 international routes from Helsinki, of which the 399 km airport pair to Stockholm Arlanda is the most frequently flown route (45 times weekly). In addition, (FIN) has recently commenced operations to its sixth destination in Russia with the addition of thrice-weekly flights from its Helsinki hub to Samara.
Following the opening of a new base at Helsinki in March 2011, Norwegian (NWG) operates 21 routes from Helsinki and one each from Oulu, Turku, and Vaasa, as of August 2014. The only domestic links, on which there is genuine competition in Finland, are Helsinki - Oulu and Helsinki - Rovaniemi, both of which are served by Finnair (FIN) and Norwegian (NWG). Overall, a total of five low-cost carriers (LCC)s ((NWG), Ryanair (RYR), Vueling (VUZ), Wizz Air (WZZ), and germanwings (RFG)) are serving the Finnish market, with easyJet (EZY) and Pegasus Airlines (PGS) being the most notable absentees - - SEE ATTACHED CHART - - "FIN-2014-08 FINLANDS TOP 12 AIRLINES."
Total international weekly seat capacity in Finland has gone up +0.3%, with four out of the top dozen airlines recording growth (when comparing data from this August with the same week last year), while (KLM) and British Airways (BAB) saw their operations unchanged. A new entrant into this year’s ranking, Icelandair (ICE) is also the fastest growing carrier, managing to increase its weekly capacity by +29% over the last 12 months. (ICE) has added two further weekly flights on the 2,453 km sector from Reykjavik/Keflavik to Helsinki, up to nine times weekly. By comparison, Lufthansa (DLH), experienced the greatest capacity decline (-18%), due to dropping the Helsinki - Düsseldorf airport pair and transferring its Helsinki - Berlin Tegel operations to its (LCC) subsidiary, germanwings (RFG).
While the domestic sector is Finland’s largest market accounting for 29% of all weekly seats, a total of 42 countries can be reached non-stop from Finnish airports according to schedule data for this August. At over >22,500 weekly seats, and +8.7% more than in August 2013, neighboring Sweden is the dominant international market, being served by five carriers (NextJet, Finnair (FIN), Norwegian (NWG), Flybe Nordic (FCA), and (SAS)) with a combined 214 weekly flights from Kokkola, Mariehamn, Pori, Vaasa, Oulu, Turku, and Tampere.
A new entrant into this year’s ranking, Russia has shown the most significant growth in weekly capacity, +46% or an additional +1,686 seats. Besides the thrice-weekly flights added to Samara on August 7th, (FIN) commenced operations from Helsinki to Nizhny Novgorod and Kazan over the last 12 months. In addition, on April 26TH, S7 Airlines (SBR) helped Helsinki to secure its third serving airline to Moscow, with daily operations to Moscow Domodedovo (the other two carriers serving the Russian capital being Aeroflot (ARO) and Finnair (FIN), both flying to Moscow Sheremetyevo). On the other hand, Denmark is the only country market featured in this year’s ranking that noted capacity decline (-4.1%), due predominately to the loss of (SAS)’ six weekly services from Turku to Copenhagen. SEE ATTACHED - - "FIN-2014-08 FINLAND TOP 12 MARKETS."
Finnair (FIN) plans to launch A350 XWB services to Shanghai and Beijing, when it begins operating the airplane in the second half of next year. Bangkok is also among the first destinations to be served by the flag carrier's A350 XWB, with Hong Kong and Singapore to be added in 2016.
As the European launch customer of the A350 XWB airplane, (FIN) has 11 firm orders and 8 options for the A350 XWB. (FIN) said the A350 XWB airplane will form the backbone of its long-haul fleet and drive expansion plans. (FIN)'s A350 XWB will feature a 297-seat configuration consisting of 46C business seats in a 1+2+1 layout, 208Y economy seats in a 3+3+3 layout, including 43 "economy comfort" seats in the front of the economy class cabin with additional leg-room.
"Since Finnair (FIN)'s founding in 1923, we have had a long history of operations using the most advanced airplanes available," said (FIN) (CEO), Pekka Vauramo. "As the first European operator of the A350 XWB, we are proud to carry forward this tradition on behalf of our passengers, whose safety and comfort remain our first priority."
The eco-smart design of the A350 XWB also brings more than >25% improvement in fuel efficiency and operating cost over the previous generation of airplanes in its class, according to (FIN).
September 2014: Finnair (FIN) is to add three seasonal services next summer. A 6x-weekly, Embraer E190 Dublin service begins March 30, operated by Flybe Finland (FCA) (formerly named Flybe Nordic). Twice-weekly, Airbus A321 service to Valletta, Malta begins April 2, while Athens will have a 2x-weekly service from April 5, using either Airbus A319s or A320s.
Finnair (FIN) has signed an agreement with Norwegian crew management company, (OSM) Aviation to outsource cabin services (CA) on approximately 20 long- and short-haul routes over the next two years, after union talks failed to hit its -€18 million/-$24 million cost-cutting target.
The move is part of (FIN)’s -€200 million/-$263 million cost-savings program, which was launched in 2011. The Finland flag carrier had hoped to hit its -€18 million cost-saving target through negotiations with cabin crew (CA) union (SLSY) in May, but negotiations failed.
In the first phase, (OSM) Aviation will provide cabin service for Finnair (FIN)’s routes to Hong Kong and Singapore from the first-quarter 2015.
(FIN) is aiming to slash €60 million from its labor costs under the second phase of its cost-savings plan, but so far, it has only reached a firm agreement on €6 million. “Our savings actions have been slowed down because two of the most difficult labor agreements (with our pilots (FC) and cabin crew (CA)) have not [reached agreements],” (CEO) Pekka Vauramo said during a briefing on its second-quarter results, in which (FIN) posted a net loss of -€23.9 million, reversed from a +€18.1 million net profit in the year-ago quarter. “We will cut -540 [cabin crew (CA)] full-time equivalents by transferring them through outsourcing,” Vauramo said.
(FIN) has reached an agreement with pilots (FC) on a series of cost-cutting measures that will generate savings of -€17 million/-$22 million a year. The savings, agreed to by the Finnish Air Line Pilots’ Association (SLL), will largely be achieved through salary and working time changes. In June, (FIN) and the (SLL) had agreed to transfer to a new wage model, but the savings solution ultimately agreed upon is based on the current wage model.
Approximately €11 million worth of savings will be realized gradually over the two-year collective labor agreement (CLA); the remaining €6 million will be achieved through changes to pilot (FC) pension schemes and employment terms for new pilots (FC). In return (and by way of compensation for the agreed-upon savings) (FIN) will not impose pilot (FC) redundancies for the next two years, and will study and implement a pilot (FC) incentive plan. The whole savings agreement is contingent upon this incentive plan, which will be formulated this fall.
(FIN) (CEO), Pekka Vauramo said: “The majority of the savings would materialize on a quick schedule, which is essential in (FIN)’s current financial situation. I know that the agreed-upon (CLA) changes are not easy for anyone. The agreement is a great display of the pilots (FC)’s commitment to their company and its future.”
In October 2012, (FIN) initiated a -€60 million cost-savings drive based primarily on personnel costs. This was in addition to a -€140 million cost-savings program launched in August 2011. Negotiations with (FIN)’s cabin crew (CA) this spring, failed to reach an agreement on a -€18 million savings plan, forcing (FC)e to use outsourced cabin crew (CA).
(FIN) has reached savings agreements with the (IAU) Finnish Aviation Union, and with salaried and senior salaried employees and engineers (MT) (FYT and FIRY), has made cuts in its administration and support functions. (FIN)’s board of directors has also agreed to a reduction in the variable element of the top management total remuneration package, as well as other benefits.
(FIN) has been trying to negotiate cost savings with its cabin (CA) personnel since 2011. “We have done our utmost to find cost savings, together with our personnel, but the long path of negotiations ended with no result [in spring 2014],” (COO), Ville Iho said. “The costs of the terms and conditions of our cabin crew (CA) far exceed the level of the general collective labor agreement of the Finnish Cabin Crew (CA) Union. As a loss-making company, we cannot continue to pay a Finnair (FIN) premium. We must get our costs to a competitive level. Unfortunately, we were not able to do this through negotiations with the union, and that is why we must now (on certain routes) change our role from providing a service to buying a service.”
Finnair (FIN) and UK-based regional carrier, Flybe (BEE) will increase their connections, following a new agreement between the two airlines.
The companies already have substantial links, following their 2011 partnership to take over Finnish Commuter Airlines (Finncomm), which was later renamed Flybe Nordic (FCA). Now known as Flybe Finland (FCA), it operates a mixture of contract-flights on behalf of Finnair (FIN) as well as its own flights around Finland and the Nordic region from its base at Helsinki Airport. (FCA) handles a substantial part of (FIN)’s European short-haul services.
Under the latest agreement, (FIN) will extend its network throughout the UK with new code share services from Manchester, northwest England, operated by Flybe (BEE). From September 15, (FIN)’s AY code will be added to Flybe (BEE) services from Manchester to 10 UK regional airports: Aberdeen, Belfast City, Edinburgh, Exeter, Glasgow, Inverness, Isle of Man, Jersey, Newquay, and Southampton.
The code shares will enable connections via Manchester between these cities and Helsinki, as well as to (FIN)’s wider network, including 15 Asian destinations.
Finnair (FIN) operated a flight from Helsinki to New York September 23rd with an Airbus A330 using environmentally sustainable biofuel.
The flight coincided with the (UN) Climate Summit taking place in New York.
According to (FIN), the biofuel mixture powering the flight to New York was provided by SkyNRG Nordic (a joint venture (JV) between SkyNRG and Statoil Aviation. The mixture is partly manufactured from cooking oil recycled from restaurants, an example of a biofuel alternative to ordinary jet fuel, that significantly reduces net greenhouse gas emissions, while also being sustainable in its own right.
“The (UN) Climate Summit is an important gathering to fight climate change, and we wanted to take this opportunity to highlight the climate benefits of more widespread adoption of environmentally sustainable biofuels in aviation,” (FIN) VP Sustainable Development, Kati Ihamäki said.
Finland Minister for International Development, Pekka Haavisto said, “As air traffic contributes 2% of all greenhouse gas emissions, it is very important to have this trial with the use of biofuels. If the price of oil rises and biofuels become cheaper, there will hopefully be a day when we’ll be able to replace at least some of the fossil fuels with fuels made of renewable and waste material.”
Along with its partners, Finnair (FIN) is also investigating the possibility of establishing a biofuel hub at Helsinki Airport. (FIN) said it is active in the Nordic Initiative for Sustainable Aviation, a group of airlines, airport operators, manufacturers and government ministries working to accelerate the development of sustainable biofuel for aviation in the Nordic.
Finnair (FIN) has appointed Juha Järvinen as its new Chief Commercial Officer (CCO) and board member, replacing Allister Paterson who is leaving the company by December 31.
Järvinen is currently Managing Director of Finnair (FIN) Cargo, which he will continue to lead as part of his new role. “During the last couple of years, he has successfully renewed (FIN) Cargo’s operations and strategy. Juha has also extensive experience from commercial operations in passenger airlines. (FIN) is currently executing its new commercial strategy and building a new, digital Finnair (FIN). I believe Juha and his team will embrace this challenge with enthusiasm and continue the renewal of (FIN)’s commercial activities that Allister has begun,” (FIN) (CEO), Pekka Vauramo said.
(FIN) Senior VP Resource Management, Gregory Kaldahl will also leave in December, at the end of his four-year contract. A successor is yet to be announced. “During his tenure, (FIN)’s network was expanded, fleet utilization was significantly improved and (FIN) entered into important joint ventures (JV) to Japan, across the Atlantic and with Flybe Finland,” (FIN) said.
October 2014: News Item A-1: Finnair (FIN) and the Finnish Cabin Crew Union (SLSY) have reached a savings agreement of €18 million/$23 million. The deal also protects cabin crews (CA) from outsourcing and redundancies.
According to (FIN), approximately 75% of savings realized from this agreement period and 25% in the future will be accomplished through changes to the employment terms of new cabin attendants (CA). In return, (FIN) gives cabin personnel (CA) protection from redundancies for the next two years, protection from outsourcing, and pension incentive.
As a result of the savings agreement, (FIN) is no longer planning to further outsource cabin services (CA). However, on September 1 (FIN) signed a contract with (OSM) Aviation to outsource cabin services (CA) on Singapore and Hong Kong routes; this will go ahead as planned.
(FIN) (CEO), Pekka Vauramo said, “Reaching this savings agreement is a significant step in restoring (FIN)’s profitability and enabling the financing of airplane investments. The agreement brings the personnel costs of our Finnish cabin personnel to a sustainable and competitive level. As a result, we can continue serving the cabin on most routes with our own crew (CA).”
In October 2012, (FIN) began a -€60 million cost-savings program, in addition to the -€140 million program it begun in August 2011 (mainly in personnel-related costs). “After the agreement was signed with (SLSY), (FIN) has reached savings agreements with almost all of its personnel groups. Savings measures continue in the areas where savings targets have not been reached,” (FIN) said.
News Item A-2: (FIN) begins summer 2x-weekly, Split, Airbus A320 service from May 5 - October 3, 2015.
News Item A-3: Finnair (FIN) has introduced its designer painted A330s on long haul international flights, including routes to China. The special A330s feature an outward appearance patterned after Finnish fashion brand Marimekko's most beloved classic patterns, the "Unikko." The plane will fly from Finnair (FIN)'s Helsinki hub to (FIN)'s various long-haul destinations starting at the end of 2014.
China has been an important market for Finnair (FIN). It was the first European airline to start the direct flights from Europe to Beijng. Beginning next autumn, Finnair will launch the new Airbus 350 to serve Beijing and Shanghai routes. In order to improve the customer experience during traveling, (FIN) has provided Chinese language service in all flights into or out of China.
Marimekko, the Finnish fashion brand, not only provides the unique patterns that decorate the outside of the new A330s but also has designed a series of textiles and tableware. Their textiles and tableware has been used in (FIN)'s planes since 2013. Marimekko (COO) Tiina Alahuta-Kasko said that in honor of the A330, Marimekko put out a special blue edition of its Unikko pattern inspired by Finland's thousands of lakes and clean nature.
November 2014: News Item A-1: The Finnair Group reported a net profit of +€16.6 million for the third quarter ended September 30, down -38.3% from +€27 million for the same period last year.
Operating profit was down -40.7% for the period, to +€23.6 million from +€39.8 million in the year-ago period.
The airline group attributed the disappointing performance to the strengthening of the euro against several revenue currencies, the ongoing weakness of the Finnish and eurozone economies, tumbling unit revenues, and declining cargo revenues.
(FIN) (CEO), Pekka Vauramo said: “(FIN)’s passenger and cargo revenue for July - September declined year-on-year, causing our turnover to decrease to €622.7 million. The decline in unit revenue, caused primarily by the strengthening of the euro against key Asian currencies, continued in the third quarter, although at a slower rate than earlier in the year. Growth in passenger volume and the progress of cost reduction measures were not sufficient to compensate for the weak revenue development, as our operational result fell to €26.7 million.”
He said that, for (FIN)’s profitability to improve, an increase in unit revenues and tight control over costs were essential.
“By the end of September, we had nearly achieved the overall target for our -€200 million cost reduction program. The program will be completed by the end of the year. The savings agreements we concluded with pilots (FC) and cabin crew (CA) in September and October will contribute to our cost competitiveness from 2015 onwards. I am very pleased with the outcome of the negotiations, as they not only produce cost savings, but also enable us to continue to develop our operations together with our personnel,” Vauramo said.
Passenger numbers for the quarter were up +2.4% to 2.62 million from 2.56 million during the same period last year, but turnover was down -2.2% to €622.7 billion. Operational costs, excluding fuel, increased +2.5% to €422 million for the quarter, while fuel costs fell -4.3% year-on-year to €177.2 million.
Third-quarter (ASK)s (8.2 billion) and (RPK)s (6.9 billion) were both down (-0.7% and -0.5%, respectively) year-over-year, but passenger load factor was up +0.1% point to 84.5% LF.
For the first nine months of the year, (FIN) swung from a net profit of +€29.4 million in 2013 to a loss of -€35.4 million this year, a decline of more than >-200%. Passenger numbers grew +3.3% year-on-year, but turnover was down -5.9% to €1.73 billion.
(ASK)s for the nine-month period declined -1% to 23.5 billion, and (RPK)s were also down, -0.8% to 19 billion. Passenger load factor for the period fell -0.2% points to 81% LF.
Operational costs, excluding fuel, decreased -2% to €1.27 million, while fuel costs decreased -4.1% year-on-year to €504.3 million.
(FIN) estimates its turnover in 2014 will be significantly lower than in 2013, with fuel costs expected to remain high. (FIN) estimates that delays in personnel cost reduction negotiations and unfavorable market conditions driving the decline in unit revenue mean its 2014 operational result will show a significant loss.
News Item A-2: Flybe (BEE) will exit its operations in Finland as it seeks to end continuing losses from the business.
(BEE)e became the 60% majority shareholder in a joint venture (JV) with Finnair (FIN), when the two carriers bought Finnish Commuter Airlines, Finncomm, in 2011. The Finnish national carrier held the remaining 40% in the (JV), named Flybe Nordic.
In an analysts’ briefing by Flybe Wednesday, continuing losses at Flybe Nordic were described as “unacceptable and deteriorating.” The airline announced it would sell its shareholding for a symbolic €1 ($1.24) by the end of the year and hopes to complete the transaction in January 2015. It said that as a result of exiting the Finnish business it will write down £9.9 million in the first half of its current financial year.
Asked if there was a buyer on the horizon for its 60% share in Flybe Nordic, a Flybe (BEE) spokesman said, “That’s not for us to answer.” He also declined to say whether the move would result in any job losses, but added: “Finnair (FIN) themselves have said today that operations will continue as normal.”
(FIN) said: “Flybe Nordic (FCA) owns fully the Finnish subsidiary Flybe Finland, which is in charge of Finnair’s regional airline operations.
“Consequently, Finnair (FIN) is now mapping alternatives to continue Flybe Finland (FCA)'s regional flying with a cost-effective business model and new ownership structure for Flybe Nordic (FCA). These alternatives include a potential new majority shareholder for (FCA).”
The shares could be sold to a new incoming majority shareholder, or (FIN) itself. That sale is conditional upon regulatory approval from the competition authorities.
Losses on the Finnish operations, which include both the former scheduled regional routes held by Finncomm and “white label” flights that account for one-third of (FIN)’s European services, have been causing concern at Flybe (BEE) for some time. The problem has been with the scheduled services, while the “white label” contract flying routes remained profitable.
It was regarded as one of several legacy issues that new (CEO), Saad Hammad regarded as having a draining effect on Exeter-based, Flybe (BEE), Europe’s largest regional carrier.
Restructuring costs have been continuing for some time. “We haven’t been able to arrive at a common view to resolve the profitability issues, and therefore the companies have agreed to discontinue the cooperation,” (FIN) (CEO), Pekka Vauramo said. “(FIN) aims to find a new majority shareholder and a business model that would enable the development of regional flying in a financially sustainable way.”
A code share arrangement between Flybe (BEE) and Finnair (FIN) will be unaffected by these developments.
News Item A-3: Finnair (FIN), the flag carrier and largest airline of Finland, commenced operations to its second destination in Thailand on November 14th, launching twice-weekly flights (Fridays and Saturdays) from its Helsinki (HEL) base to Phuket (HKT). The 8,312 km sector was converted from a charter service, and will be served until March 28th utilizing the Oneworld (ONW) Alliance member’s A340-300s. Interestingly, the new service will see a frequency increase to thrice-weekly from December 14th. TUIfly Nordic (TNS) is already operating this airport pair with twice-weekly services, while Finnair (FIN) is also flying to Thailand with 10 weekly flights to Bangkok Suvarnabhumi.
Finnair (FIN) is to launch services to Ho Chi Minh City in Vietnam, the Israeli city of Eilat, Lanzarote and Fuerteventura on the Canary Islands, as well as Madeira in Portugal, for winter 2015 - 2016.
Several of the routes were previously served on a charter basis, but (FIN) is now planning to offer all five routes as scheduled services, with a single weekly frequency.
(FIN) will launch Madeira in summer 2015, starting on April 27, but it will now continue to serve the Portuguese archipelago throughout the winter 2015 - 2016 season. The other routes will be seasonal.
Fuerteventura will start on October 25, 2015, followed by Eilat on October 28. Services to Lanzarote will begin on October 31 and, finally, flights to Ho Chi Minh City, the largest city in Vietnam, will commence on December 10
The four seasonal services (to Ho Chi Minh City, Eilat, Lanzarote, and Fuerteventura) will be discontinued at the end of the winter season, by March 26, 2016.
December 2014: News Item A-1: Finnair (FIN) begins 3x-weekly, Helsinki - Chicago Airbus A330 service June 13 - October 17.
News Item A-2: (FIN) is to launch services to Ho Chi Minh City in Vietnam, the Israeli city of Eilat, Lanzarote and Fuerteventura on the Canary Islands, as well as Madeira in Portugal, for winter 2015 - 2016.
News Item A-3: Finnair (FIN) has firmed up eight additional Rolls-Royce (RRC) powered Airbus A350-900s, increasing its commitment for the new twinjet to a total of 19 airplanes.
“Firming up the order for additional eight Airbus A350 XWB airplanes our commitment to growth and to operating a world-class Airbus (EDS) fleet. Together with (EDS) and our other partners, we are preparing to make the A350 entry into service (EIS) a success,” (FIN) (CEO), Pekka Vauramo said.
In 2007, (FIN) placed an order for 11 A350-900s, with a further eight options. These initial airplanes are scheduled for delivery from fall 2015, making the type’s European debut. They will be configured with 297 seats in a two-class layout and deployed on (FIN)’s long-haul routes to Asia and America.
“Our strategy centers on growth, taking advantage of the unique geographical location of our Helsinki Hub, which offers the fastest connections between Europe and Asia. The A350 XWB airplanes will be essential in delivering on our strategy, as they enable growth in both passenger and cargo traffic, offer our customers top class travel experience and considerably enhance our cost competitiveness,” Vauramo said.
Finnair (FIN), which operates an all-Airbus fleet of 30 A320 family airplanes and 15 A330s/A340s, was the first airline to select the A350 XWB. At the end of November, the new wide body had racked up 775 orders from 40 customers worldwide.
Rolls-Royce (RRC) valued the engine deal for the eight additional airplanes at $450 million at list prices.
News Item A-4: Airbus (EDS) said Finnair (FIN)’s first A350-900 is taking shape in the Roger Béteille Final Assembly Line (FAL) in Toulouse, France.
(FIN) will be the first European airline to fly the A350 XWB and the third operator in the world. The airplane, scheduled for delivery in fall 2015, is in the fuselage section joining phase. “Following this, the airplane will move to wing junction, cabin installation and first power-on, all achieved in one single station,” Airbus (EDS) said. “Once these phases are completed, the airplane will undergo system tests, cabin completion, painting and engine installation before starting the delivery process, including flight testing.”
(FIN) has 19 A350 XWBs on order. The airplane will be deployed on (FIN)’s long-haul routes to Asia and America.
Airbus (EDS) said it has received 778 firm orders from 41 customers for the A350 XWB.
February 2015: News Item A-1: Finland has given the green light for StaffPoint Holding and G W Sohlberg (GWS) to acquire Flybe (BEE)’s 60% stake in Flybe Nordic (FCA).
Flybe Nordic (FCA), which is parent to Finnair (FIN) regional carrier Flybe Finland, was set up as a joint venture (JV) between Finnair (FIN) (40%) and Flybe (BEE) (60%) in 2011. However, Flybe (BEE) is pulling out of the venture because of its poor performance.
Finnish firms StaffPoint Holding and (GWS) have now been cleared to acquire the Flybe (BEE) shares for the token sum of €1/$1.20. “The transaction is expected to be closed in early February 2015,” Finnair (FIN) said.
Once the deal has gone through, StaffPoint will own 45% of the (JV), Finnair (FIN) will hold 40%, and (GWS) will take the remaining 15%. The partners are working on a new business plan, which is likely to include a name change.
News Item A-2: Finnair ((IATA) Code: AY, based at Helsinki Vantaa) (FIN) says its freight subsidiary, Finnair Cargo, has signed an agreement with the International Airlines Group (IAG) to participate in its (IAG) "Cargo Partner Plus" Program. Six airlines currently make up the program including Qatar Airways (QTA), (JAL)/(JAS) - Japan Airlines; the Avianca (AVI) group, and American Airlines (AAL).
“This closer cooperation with (IAG) Cargo will provide our customers better access to many markets beyond our own network. This is an innovative way to grow reach, and one that we believe will prove mutually beneficial to (IAG) Cargo and ourselves,” Juha Järvinen, Chief Commercial Officer (CCO), Finnair (FIN), said.
Through the "Partner Plus," which allows members to interline on each other’s airplanes on a commercially booked basis, Finnair Cargo customers will gain access to markets in South and North America as well as Africa, as the introduction of the (IAG) network connections offers expanded route availability via its London Heathrow and Madrid Barajas hubs.
For (IAG) Cargo, the addition of (FIN) to the program will provide additional capacity across the globe (Finnair (FIN)'s strategic destinations in North East Asia, in particular.
March 2015: News Item A-1: Finnair (FIN) has approved an investment program for bringing Wi-Fi connectivity to the majority of its wide body and narrow body fleet. The total value of the investment is approximately €30 million/$38.2 million. (FIN) will introduce its first on board Wi-Fi service in the fall, with the arrival of the first (FIN) Airbus A350 XWB airplane. In 2016, the company will start Wi-Fi installations in (FIN)’s A330 long-haul airplanes as well as its European short-haul Airbus fleet. Installations are expected to be completed by 2018.
News Item A-2: Finnair (FIN) finalized a sale and leaseback deal with German Operating Aircraft Leasing GmbH & Company KG (GOAL) for three Embraer EMB-190s in a deal valued at approximately €60 million/$63.5 million at current market value. The airplane lease agreements expire on average after eight years. The airplanes included in the arrangement are currently operated by Finnair (FIN)’s associated company Flybe Finland (FCA), to whom Finnair (FIN) subleases the airplanes. The proceeds from the transaction will be used to finance Finnair (FIN) fleet investments of 19 Airbus A350 airplanes.
April 2015: News Item A-1: Finnair (FIN) expanded its seasonal offering from its Helsinki (HEL) base with the addition of three new routes. Firstly, on March 31st, (FIN) the Oneworld (ONW) Alliance member added weekly (Tuesdays) flights to Paphos (PFO), using its 165-seat A320s, while on April 2nd, it introduced weekly (Thursdays) departures to Malta (MLA), utilizing its 209-seat A321s. Lastly, on 5 April, the Finnish flag carrier started weekly (Saturdays) services on the 2,488 km route to Athens (ATH), using its 138-seat A319s. Finnair (FIN) will face competition only on the Greek route from Norwegian (NWG)’s weekly flights.
News Item A-2: Finnair (FIN) is expanding its code share cooperation with airberlin (BER) and FlyNiki (NKI). The Finnair AY designator will be added to selected services operated by (BER) or FlyNiki (NKI)to Bucharest Otopeni, Catania, Chania, Cologne, Larnaca, Malaga, Naples, Palma de Mallorca, Paphos, and Stuttgart, connecting these cities via Berlin Tegel, Dusseldorf, Frankfurt, Munich, Vienna, or Zurich.
The code shares are planned to take effect from early May.
News Item A-3: Finnair (FIN) will resume flights to three cities in Russia from April 22 - 23. (FIN) is re-launching 3x-weekly services from Helsinki to Samara, Kazan, and Nizhny Novgorod.
(FIN), the Finland flag carrier previously launched services to these Russian destinations in the summer 2014, but ceased operations February 1 due to weakened demand for Russian international flights. With the resumed services, (FIN) will now have six flights to Russian destinations.
(FIN) also operates flights from Helsinki to Moscow, Saint Petersburg, and Yekaterinburg. Russia’s Aeroflot (ARO) operates only Moscow - Helsinki service.
In 2013, Russia and Finland agreed to add second designated carriers on Moscow - Helsinki routes. (S7) Airlines (SBR) won the designation from Russian authorities and launched the service on April 26, 2014, but ceased the flights last winter.
Hong-Kong-based Cathay Pacific (CAT) announced in March it would cease Moscow flights from June 1, due to the decreasing number of passengers and growing operational costs on the route.
Austrian’s FlyNiki (NKI) ceased Vienna - Moscow flights at the beginning of the year. At the same time, German flag carrier Lufthansa (DLH) does not plan to significantly reduce the frequencies or capacity on Russian destinations.
News Item A-4: Finnair (FIN) has acquired Flybe (BEE)’s 60% stake in Flybe Nordic (FCA) for €1/$1.08, temporarily giving it full ownership of the former joint venture (JV), while it finalizes a deal with Finnish investors Staffpoint and G W Sohlberg (GWS).
The two airlines set up Flybe Nordic (FCA) in 2011 through the acquisition of Finnish Commuter Airlines, with (BEE) acquiring a 60% stake and Finnair (FIN) taking the remaining 40%. However, last November, (FIN) said the partners were going their separate ways after failing to “arrive at a common understanding to resolve profitability issues.” (FIN) announced plans to either buy (BEE) out of Flybe Nordic (FCA), or find a buyer for (BEE)’s stake.
In January two Finnish firms, recruitment firm StaffPoint Holding and family-owned investment broker (GWS), signed a letter of intent (LOI) to buy (BEE)’s 60% Flybe Nordic (FCA) stake for the token sum of €1. Competition clearance has been granted, but this deal is yet to be finalized. If it is firmed, StaffPoint will own 45% of the (JV), Finnair (FIN) will hold 40% and (GWS) will take the remaining 15%.
(FIN) has now closed the acquisition of Flybe (BEE)’s stake, but it stressed this is an interim solution. “While the discussions with Staffpoint and (GWS) still continue, (FIN) will now acquire Flybe UK (BEE)’s share of Flybe Nordic (FCA). We hope to sign a new share purchase agreement in the coming months,” (FIN) (CEO), Pekka Vauramo said.
Flybe Nordic (FCA) is parent to operating carrier Flybe Finland, which operates a fleet of 26 airplanes, comprising 12 ATR72s, two Embraer EMB-170s and 12 EMB-190s. (FIN) said the subsidiary, which will most likely be renamed, operates “a substantial part” of its domestic and European routes. Flights operated by Flybe Finland (FCA) will continue normally as the sale talks continue.
After parting ways with (BEE), Finnair (FIN) hopes to find a “financially sustainable” solution for its regional flying. “We will take an important step to this direction at the beginning of May, when all routes operated by Flybe Finland (FCA) at their own commercial risk will become a part of (FIN)’s contract flying arrangements, as we have communicated earlier. (FCA) has also implemented several internal measures to improve the company’s financial position,” Vauramo said.
(FIN) will report on the financial impact of the deal during at the release of its interim results on May 7. (FIN) has already written down the value of its Flybe Nordic (FCA) shares, but it has previously acknowledged that the business requires “further restructuring.”
Commenting on the sale, (BEE) said: “The Flybe Group is pleased to announce the completion of the disposal of Flybe UK (BEE)’s 60% interest in Flybe Nordic (FCA) to Finnair (FIN). The agreement, which was first announced on November 12, 2014, is a significant step forward in (BEE)’s turnaround program.”
News Item A-5: Finnair (FIN) has appointed Pekka Vähähyyppä as its new (CFO), replacing Erno Hildén who has held the position since 1997.
Vähähyyppä, who will also become an executive board member, is joining (FIN) from retail firm Stockmann, where he has been Executive VP & (CFO) since 2000.
Hilden will leave the company April 30, and will be temporarily replaced by VP Finance, Mika Stirkkinen. Vähähyyppä is due to leave Stockmann by no later than August 14.
Finnair has appointed Pekka Vähähyyppä as its new CFO, replacing Erno Hildén who has held the position since 1997.
Vähähyyppä, who will also become an executive board member, is joining Finnair from retail firm Stockmann where he has been EVP and CFO since 2000.
“Pekka Vähähyyppä has a long and versatile experience from several consumer industries and the retail business. In his previous roles, he has gained strong competencies in different areas of financial management, change management and corporate restructuring,” (FIN) Finnair (CEO), Pekka Vauramo said.
News Item A-6: Finnair (FIN) has approved an investment program for bringing Wi-Fi connectivity to the majority of its wide body and narrow body fleet. The total value of the investment is approximately €30 million/$31.7 million.
(FIN) will introduce its first onboard Wi-Fi service in fall 2015, with the arrival of its first A350 XWB airplane. In 2016, (FIN) will start Wi-Fi installations in (FIN)'s Airbus A330 long-haul airplanes as well as its European short-haul Airbus (EDS) fleet. Installations are expected to be completed by 2018.
News Item A-7: Finnair (FIN), the first European airline to fly the Airbus A350-900, has detailed its entry-into-service (EIS) procedure.
(FIN), the Finland flag carrier has 19 of the type on order and expects to receive the first four in the fall. Another seven will be delivered in 2016 and 2017, with the remaining eight to be delivered between 2018 and 2023.
The A350 will become (FIN)’s main airplanes on its important Europe - Asia network.
Before A350 long-haul operations begin, Oneworld (ONW) Alliance member (FIN) will conduct crew familiarization flights throughout Europe in October. The first commercial A350 flight will be October 5 from its Helsinki hub to Rovaniemi in Finnish Lapland, followed over the next two weeks by other European cities, including Brussels, Hamburg, London, Stockholm, and Vienna on scheduled services, which would normally be operated with narrow body airplanes.
Long-haul operations start first on the Helsinki - Shanghai Pudong route with daily A350XWB services from October 25. Beijing follows with daily A350 service on November 21. (FIN)’s peak-season frequencies to Bangkok will be served with a combination of A350 and A330 airplanes from December 4th.
Daily services to Hong Kong from February 1, 2016 and to Singapore from May 5, 2016 will also be operated with a combination of A350 and A330 airplanes. “Our A350 investment program is the largest in the company’s 92-year history, and these airplanes will form the backbone of our long-haul operations for years to come, while also playing an essential role in our sustainable, long-term profitability,” (CEO), Pekka Vauramo said.
(FIN) expects the A350 to bring more than >25% improvement in fuel efficiency and operating cost over the previous generation of airplanes in its class.
The (FIN) A350 offers a 297-seat configuration, including 46C seats in business class in a 1+2+1 layout. Economy (Y) class cabin features Zodiac Z300 slim-line seats with a 31-inch seat pitch in a 3+3+3 layout. There are also 43PY economy comfort seats, which offer four extra inches of leg room.
In March, (FIN)’s overall capacity grew +3.8% and (RPK) grew +3.5% year-over-year. Passenger load factor was 78.9% LF.
News Item A-8: Finnair (FIN) has signed an exclusive, 12-year V-Services Fleet Hour Agreement to manage 10 (V2500) engines on five Airbus A321ceos.
May 2015: News Item A-1: The Finnair (FIN) Group reported a net loss of -€9.8 million/-$11 million for the first quarter, an improvement of +65% over a net loss of -€28.1 million in the year-ago period.
First-quarter revenue was down -0.5% to €540.4 million from €543.3 million in the year-ago quarter, but the operating loss was reduced by -71% to €8.3 million. Revenue in the airline business alone saw a +0.5% increase, up to €510.8 million from €508.1 million in the same quarter a year earlier.
(CEO) Pekka Vauramo said: “The factors contributing to the improved result in addition to the increased revenue included further progress in cost savings as well as lower fuel prices. Unfortunately, the substantial appreciation of the dollar against the euro diluted the benefit gained from the fall in the price of jet fuel and significantly increased other dollar-denominated costs.”
He pointed out that the operational result had also been affected by the weak financial performance of Finnair Group’s tour operator Aurinkomatkat Suntours and lower revenue from cargo traffic.
For the airline, passenger numbers in the first quarter were up +3.1% to 2.28 million, matching a +3.1% increase in (ASK)s to 7.72 billion. (RPK)s increased +2.3% to 6.02 billion for the quarter, while passenger load factor actually declined by -0.6 percentage points to 78.1% LF.
Finnair (FIN) estimates (ASK)s will increase +3% in 2015, with revenue remaining at 2014 levels.
However, (FIN) expects unit costs, excluding fuel, at constant currency to decrease from 2014 levels. It said that lower jet fuel prices and the effects of its cost-savings program were also contributing to Finnair (FIN)’s 2015 financial performance.
“We are moving in the right direction, despite the fact that our result is still not at the level we are striving to reach,” Vauramo said. “Our long-haul fleet renewal [Finnair (FIN) has ordered 19 Airbus A350 XWBs for delivery between the second half of 2015 and 2023], which will start this coming autumn, will significantly improve the cost-competitiveness and customer experience of our long-haul traffic. At the same time, we will continue to focus on increasing our revenue through, for example, ancillary revenue.”
(FIN)’s board of directors has approved updated strategic targets for (FIN), which include a doubling of its 2010 Asian traffic level by 2020. “The core of (FIN)’s strategy is taking advantage of the growing demand for traffic between Europe and Asia,” (FIN) said. “The strategy is based on the growing markets in Asia, fast connections between Europe and Northeast Asia, quality service, and cost-efficient, punctual operations. Helsinki's geographical location provides (FIN) with a natural competitive advantage, as the fastest routes between many destinations in Europe and megacities in Asia go through Helsinki.”
News Item A-2: Finnair (FIN)'s cargo affiliate, Nordic Global Airlines (NGB) will cease operations by the end of May.
(NGB) was founded in 2011, flying main-deck cargo across four continents using what it described as a “low-cost and thin-organization model.” However, overcapacity in the sector and depressed freight pricing forced the airline’s closure.
Finnair (FIN) Cargo owns 40% of (NGB), and other shareholders include Neff Capital Management, Daken Capital Partners, and the Mutual Pension Insurance Company, Ilmarinen.
Between 2011 and 2014, Finnair (FIN) leased freighter capacity from (NGB) primarily to handle its Asian cargo traffic. However, (FIN) said its belly hold cargo capacity would increase “significantly” when its new Airbus A350 airplanes join the fleet, as a result of which (FIN) decided to focus on carrying cargo in the belly holds of passenger airplanes. It discontinued separate cargo freighter operations at the end of last year.
Finnair (FIN) said the termination of the operations had no material impact on its cargo business or financial position.
News Item A-3: Finnair (FIN) has warned that a ground handling strike could cause “significant” disruption to Finnish operations from May 18 - 21.
The Finnish Aviation Union has called a May 19 - 20 strike to protest collective labor agreement (CLA) changes. (FIN) said it is not a party to the dispute in any way. “Even though the dispute is not related to (FIN), the strike would, if implemented, have significant impacts on (FIN) flights, as it would bring (FIN)’s baggage and ground handling services to a complete halt for several hours during peak travel hours on May 19 - 20. The strike would thus disrupt the travel plans of thousands of Finnair (FIN) customers,” it said.
If the strike is confirmed, it is also likely to have a spillover effect on May 18 and 21. (FIN) will announce any flight cancellations for May 18 on May 17, and will continue to announce adjusted schedules for the remaining days to May 21.
(FIN) urged passengers to travel with hand luggage only, as the strike will affect its baggage handling operations.
Later, however, Finnair (FIN) ground handlers canceled strike plans
and will now operate normally after the Finnish Aviation Union ground handlers canceled plans to strike from May 19 - 20 over collective labor agreement (CLA) changes.
Although (FIN) was not a party to the dispute in any way, it had warned that the ground handling strike could cause “significant” disruption to Finnish operations from May 18 - 21. “We are happy to see that the negotiating parties have reached an agreement in this dispute,” (FIN) (COO), Ville Iho said.
The strike threat has therefore been withdrawn and (FIN) has abandoned its contingency plans, which would have seen flight cancelations from May 17, with thousands of customers affected over the full period of the action.
“We are sorry about the uncertainty this situation may have caused to our customers. Thankfully the strike threat has now been withdrawn,” (FIN) said.
News Item A-4: Finnair (FIN), the first European airline to operate the Airbus A350 XWB airplane, has signed a 12-year agreement with Lufthansa Technik (DLH) (LTK) for component support.
(DLH) (LTK)’s exclusive Total Component Support contract covers the availability and repair services of A350 components. (FIN) already has an agreement with (DLH) (LTK) on engine components for (V2500)s and (APU) services.
“The new A350 XWB airplanes form the backbone of our growth strategy, and component support agreement is one part of our thorough preparations for the airplane's arrival,” Finnair VP Technical Operations said.
(FIN) has firm orders for 19 A350 XWB airplanes, the first four of which are expected to arrive in the second half of 2015, with another seven to arrive in 2016 and 2017. The complete order will be fulfilled by 2023.
(FIN) (CEO), Pekka Vauramo has said the A350 fleet will significantly improve the cost-competitiveness and customer experience of the long-haul traffic. (FIN) strategic targets include a doubling of its 2010 Asian traffic level by 2020. The Europe - Asia network remains its core long-haul business. The first commercial A350 XWB flight will be October 5 from Helsinki to Rovaniemi in Finnish Lapland, followed by several European destinations. Long-haul operations will begin on the Helsinki - Shanghai Pudong route with daily A350 XWB services from October 25.
(DLH) (LTK) has 800 clients and services 3,200 airplanes.
June 2015: News Item A-1: Finnair (FIN) launched two new routes from Helsinki (HEL), starting on June 13 with its latest USA destination, Chicago O’Hare (ORD) - - see photo "FIN-2015-06 - Helsinki to Chicago O'Hare.jpg." The 7,115 km city pair will be operated thrice-weekly using (FIN), the Oneworld (ONW) Alliance member’s A330-300s, and faces no direct competition. The service joins current USA operations by (FIN) to New York (JFK) and Miami. On June 14, (FIN) began a new weekly service to Innsbruck (INN) in Austria. Flights will operate on the 1,698 km sector each Sunday using (FIN)’s A320s, and also faces no direct competition.
News Item A-2: Finnair (FIN) is in the process of selecting its future narrow body fleet, (CEO), Pekka Vauramo said on the sidelines of the (IATA) (AGM) in Miami.
News Item A-3: Vaasa Airport in western Finland has closed to all air traffic on account of renovation works to its sole runway, the 2,500 m-long 16/34. The closure is effective June 22 and runs until July 26.
The cloest alternative airport is Kokkola/Pietersaari, that is served several times daily by Finnair (FIN) subsidiary, Nordic Regional Airlines ((IATA) Code: FC, based at Helsinki Vantaa) with ATR 72-500s. Norwegian (NWG) and (SAS) have temporarily suspended their flights linking Vaasa and Stockholm Arlanda.
July 2015: Finnair (FIN) begins daily service to Shanghai (PVG) on October 25 and daily Beijing service will begin November 21. Both services will be flown with (FIN)’s new Airbus A350.
(FIN) will be the first European airline to operate the type. From December 4, (FIN) begins seasonal Bangkok service with a combined A350/A330 fleet. Daily Hong Kong begins February 1, 2016 and Singapore May 5, also with the A350/A330 combination.
August 2015: News Item A-1: The Finnair Group reported a first-half 2015 net loss of -€6 million/-$6.7 million, narrowed from a -€23.9 million net loss in the year-ago period.
(FIN) attributed the improvement primarily to revenue growth in core business operations, progress in cost reduction measures and falling fuel prices. Revenue was largely static for the period, down just -0.7% year-on-year to €1.1 billion, and an operating loss of -€13.9 million represented a +74.5% improvement over (1H) 2014.
Passenger numbers for the 2015 half-year increased +3.7% to 4.9 million, while capacity (ASK)s were up +1.7% to 15.5 billion. Traffic (RPK)s were up +1.1% to 12.2 billion, while load factor dipped half a percentage point to 78.6% LF. Yield, however, improved +2.8%.
(FIN) (CEO), Pekka Vauramo said: “Our passenger traffic revenue from tickets and ancillary services saw strong growth in the second quarter of 2015, and we achieved a new record in June by carrying more than >37,500 passengers in one day. Profitability improved significantly, although the operational result still showed a loss of -€12.9 million. While we cannot be satisfied with our loss-making result, our financial position and liquidity are very strong. We are moving in the right direction and our strategy, which was updated in the spring, is clear. Our goal is profitable growth, which we will be better equipped to achieve once the Airbus 350 aircraft start joining our fleet later this year.”
Vauramo said the long-haul fleet renewal, which starts this fall, would enable gradual capacity growth and generate fuel cost savings. (FIN) has begun recruiting cabin crew “with a view to future growth,” he said.
In terms of its outlook for the rest of the year, (FIN) estimates its 2015 operational result will be around breakeven or slightly positive, with a capacity increase of +3% for the year still on target. (FIN) still expects revenue for the full year to remain at 2014 levels but, contrary to its May forecast, now expects unit costs excluding fuel at constant currency to remain at (not below) 2014 levels.
News Item A-2: Finnair (FIN) says that during Summer 2016, it will become the first airline to offer scheduled international services to Longyearbyen, a Norwegian archipelago situated in the Arctic Ocean.
(FIN) said it will operate a 3x weekly service to Helsinki Vantaa over the period June 1 to August 27, 2016.
"During Midsummer, we will provide three weekly flights to Svalbard, which is mainly aimed at European customers, but can be also be connected from our Asian flights," Petri Vuori, Finnair's VP of Global Sales, said.
Situated midway between continental Norway and the North Pole, Longyearbyen is the world's northernmost commercial airfield. Currently, it is connected to the Norwegian mainland by Norwegian (NWG) and (SAS) Scandinavian Airlines, which offer flights to Oslo Gardermoen and in the latter's case, Tromsø as well.
News Item A-3: Finnair (FIN) has announced it will be scaling back its Russian operations with effect from September onwards. Citing low demand, (FIN) said flights to Nizhniy Novgorod would be suspended from September 1 onwards, while seasonal demand would see flights to Samara Kurumoch and Kazan International suspended for the period January 31 to April 30, 2016.
(FIN)'s other Russian services (Ekaterinburg, Moscow Sheremetyevo, and St Petersburg) have so far not been affected.
In June, Lufthansa (DLH) announced it would suspend service to Moscow Vnukovo, Samara Kurumoch, and Nizhniy Novgorod with effect from late August also citing a dearth of demand.
News Item A-4: Finnair (FIN) Cargo has signed a freighter sharing deal with (IAG) Cargo. The two carriers have connected their networks on London - Helsinki. The route will be flown 2x-weekly with a (DHL) A300-600F freighter under contract to (FIN). This is the third cargo hub for Finnair (FIN), following Helsinki and Brussels.
“This partnership with (IAG) Cargo offers our customers considerably improved connections between Asia and the UK, and adds tens of new connections between our Nordic home market, North America and Asia,” Finnair Cargo head, Antti Kuusenmäki said.
“This deal will open up new markets for our customers while supporting the responsible management of capacity on our network,” IAG Cargo (CEO), Steve Gunning added.
European cargo airlines have been under pressure in recent years, partly due to the expansion of the Gulf “Big Three” airlines (Emirates (EAD), Etihad Airways (EHD) and Qatar Airways (QTA)) into the continent, notably with the considerable belly-hold capacity of their Boeing 777s.
September 2015: News Item A-1: Finnair (FIN) has warned it may take a €30 million/$33.4 million hit due to national pension reforms, although it is also expecting a +€70 million gain from its fleet renewal.
Later this year, the Finnish parliament is expected to adopt an act that will gradually increase the country’s statutory retirement age from 63 to 65 years from the beginning of 2017. On average, Finnair (FIN) pilots (FC) retire at 58 years old.
(FIN) has been trying to renegotiate its collective labor agreement to take account of the changes, which affect approximately 700 pilots (FC) employed by (FIN), but no agreement has been reached.
If these talks fail and the regulation is passed, Finnair (FIN) warned its pensions-related costs would increase by approximately +€30 million, along with a +€2 million increase to its annual staff costs. This €30 million hit would be recorded on (FIN)’s balance sheet for the year ended December 31, 2015,
However, in a separate notification, (FIN) said its fleet renewal (involving the arrival of its first two Airbus A350-900 XWBs and the phase out of its remaining A340-300s) will boost its 2015 second half results by approximately +€70 million.
(FIN) is the European launch customer for the A350 XWB, with its first delivery scheduled for October 7. It has 19 of the type on firm order and is scheduled to receive four aircraft in the second half of 2015, seven in 2016 - 2017 and eight in 2018 - 2023.
(FIN) will dispose of the seven A340-300 aircraft it currently operates, by the end of 2017. Airbus (EDS) has agreed to acquire four A340-300s currently owned by Finnair (FIN) in 2016 and 2017.
News Item A-2: Finnair (FIN) has deployed AirVault Records Audit and Delivery (AVRAD), a new cloud-based software service designed to manage compiling records for aircraft lease return.
News Item A-3: Finnair (FIN) has canceled one domestic flight on September 17 and a further 15 on September 18 in preparation for a nationwide labor demonstration, which is likely to disrupt its operations.
The Finnish carrier, which was due to operate over >350 flights on September 18, has preemptively canceled 16 flights to and from Helsinki and has warned that there may be more to come.
“(FIN) intends to fly all its other flights, but considerable delays on flights can be expected on Friday [September 18].”
It added that airside transport to aircraft at Helsinki-Vantaa airport is likely to be heavily disrupted, as the Transport Workers’ Union (AKT) plans to stop services between 0600 and 2200 EET.
The demonstration is expected to impact a wide range of industries, including aviation.
News Item A-4: Technology specialist (WIN) is expanding its e-booking system to connect independent forwarders to 16 airlines. (WIN) already connects to over 90 airlines for electronic Air Waybill (e-AWB). The carriers available for e-bookings include British Airways (BAB), Iberia (IBE), Etihad Airways (EHD), (SAS), Singapore Airlines (SIA), Jet Airways (JPL), Swiss (CSR), American Airlines (AAL), Air France (AFA), Finnair (FIN), Korean Air (KAL), (KLM), Lufthansa (DLH), United Airlines (UAL), Emirates (EAD), and Gulf Air (GUL). The all-in-one tool includes the ability for customers to look up flight schedules, create and manage bookings in real-time, transmit (e-AWB) data, and receive full (e-AWB) tracking automatically.
News Item A-5: The first Airbus A350 XWB for Finnair (FIN) has completed its first flight in Toulouse. The aircraft will now enter the final production phase, including further ground checks and flight tests.
(FIN), the Finland flag carrier is expected to take delivery of the aircraft on October 7, becoming the first airline in Europe to operate the A350 XWB, and the third operator in the world.
The first commercial flight will be October 9 from its Helsinki hub to Oslo and Amsterdam, followed by other European cities including Brussels, Hamburg, London, Stockholm, and Vienna on scheduled services.
The A350 XWB European launch customer has 19 of the type on firm order, to be received from 2015 - 2023.
(FIN), the Finland flag carrier also announced it will postpone the A350 XWB long-haul launch schedule to November 21, when the aircraft flies from Helsinki to Shanghai Pudong. The original launch date was October 25.
Finnair (FIN) adjusted the A350 long-haul launch schedule due to “changes in the expected delivery schedules of the company’s first A350 aircraft, the needs of the crew familiarization program and other operational factors,” it said.
“Introducing 19 new aircraft into our fleet over a period of eight years is a major program for Finnair (FIN). We have built the necessary flexibility into our preparedness plans and our (seven) A340-300s exit plan to adjust to any changes that may arise over the course of this massive program, ensuring a smooth introduction of the new aircraft into our fleet,” (FIN) (COO), Ville Iho said.
Finnair (FIN) Senior VP Commercial Division, Juha Jarvinen previously said (FIN) will phase out the A340-300s by late next year, leaving (FIN) with a long-haul fleet of twin engine A330s and A350s, which takes it to 20 - 22 long-haul aircraft.
October 2011: News Item A-1: The Finnair Group has reported a third-quarter net profit of +€39 million/+$44 million), more than doubled from a net profit of +€16.6 million in the year-ago period.
Third-quarter revenue was €637.1 million, up +2.3% year-over-year, and operating profit was +€64.2 million, nearly tripled from +€26.7 million in the year-ago period, due to strong summer trading, deep cost cuts and lower fuel prices.
“The operational result in its seasonally strongest third quarter, which is the best quarterly result Finnair (FIN) has ever posted. The factors contributing to this encouraging result include an increased load factor and higher ticket revenue in our core business, passenger traffic, as well as brisk sales of ancillary services,” (CEO), Pekka Vauramo said.
Operating (EBITAR) was €115.1 million, up from €80.1 million in the prior-year quarter. Ancillary revenue per passenger increased +29% to €9.79.
Third-quarter traffic was up +3.5% year-over-year to 7.2 billion (RPK)s on a +2% rise in capacity to 8.4 billion (ASK)s, producing a load factor of 85.5% LF, up +1.3 points.
“The profitability of passenger traffic improved year-on-year in all traffic areas except domestic flights, which are still loss-making on several routes,” Vauramo said. “This is something we cannot be satisfied with, and we must adjust our capacity to better correspond with demand,” Vauramo said.
(FIN) reiterated previous estimates that its full-year 2015 operating results will either break even or be slightly positive. Capacity (ASK)s are expected to grow +3% and revenue should remain at the 2014 level.
News Item A-2: Finnair (FIN) the Finland flag carrier, has taken delivery of its first of 19 Airbus A350 XWBs on October 7 , flying the airplane from the Toulouse factory where it was made to Helsinki, and becoming the world’s third and Europe’s first airline to operate the new wide body.
(FIN) also announced two new Asia destinations that it will introduce in 2016: To Fukuoka, Japan, and Guangzhou, China. A key network strategy of ((FIN) is to expand its north Asia network (aiming to double its annual 1.42 million passengers to the region by 2020) and the A350 is seen as a driver of that strategy.
(FIN) will receive its next few A350s rapidly after the first, with three more planned this year and the fifth aircraft early in 2016. This will allow (FIN) to expand its A350 footprint. Commercial services began October 9 with a European tour starting in Amsterdam and Oslo. On November 21, (FIN) will begin its long-haul A350 services with a Helsinki - Shanghai flight. The airline wants to be regarded as a European hub for relatively short flights to and from north Asia. Combining the advantage of its northern location with the new passenger comforts of the A350. Other Asian city destinations that will adopt the A350 include Singapore, Hong Kong, Beijing, and Bangkok.
Finnair (FIN) went to renowned Finnish designer, Vertti Kivi of dSign for its A350 cabin design, which is influenced by Nordic style and has 24 (LED) mood-lighting options, including a "Northern Lights" mode. The mood lighting is integrated with the in-seat In-Flight Entertainment (IFE) system, so lighting on individual screens matches the cabin light ambience.
(FIN)’s A350 has 297 seats across a three-class cabin of business (C), economy comfort (PY) and economy (Y). Business (C)-class seating is in a 1-2-1 configuration. Economy (PY) comfort has a 38-inch seat pitch, while economy (Y) has a 31 - 32-inch seat pitch with a 3-3-3 configuration.
The Oneworld (ONW) Alliance airline plans to begin a direct flight to Fukuoka in spring 2016, with 3x-weekly frequencies, and a 4x-weekly frequency to Guangzhou between May 6 and October 29, 2016.
As the airline phases in its A350s, it will retire its A340s so that its long-haul fleet will be based on its A350 and A330 twin engine wide bodies.
News Item A-3: Europe's first Airbus A350 XWB operator, Finnair (FIN), will begin Singapore Changi Airport flights using the aircraft in June 2016, and will also increase the frequency from those provided by its existing Airbus A330 services.
(FIN), the Finnish flag carrier operates 5x-weekly services to Singapore, but will increase those to seven using a combination of A330 and A350 aircraft until (FIN) takes delivery of more A350s.
"We expect to take three more A350s this year, but until we have enough aircraft in the fleet to fully service [the Singapore route] we will use both aircraft (probably for the first month of operation)" Finnair (FIN) Head of Travel Products, Anssi Partanen said. He said the new A350 service to Singapore would complement its newly announced services to Shanghai in November 2015, Fukuoka in early 2016, and Guangzhou in May 2016. Partanen said more schedules would be announced soon.
"These new services to Asia destinations like Fukuoka and Guangzhou won't be the last you will see from us," he said. "We will introduce more in future; we are looking both at new destinations and extensions of services to existing destinations."
Finnair (FIN)'s drive to extend its Asian business is complemented by new works at Finavia-operated, Helsinki-Vantaa Airport, which will spend up to €900 million/$1 billion on upgrading to suit aircraft such as (FIN)'s A350.
"We will concentrate our improvements on capacity for wide body aircraft," said Finavia spokesperson, Kaisa Venermo. The airport plans to double its wide body-capable airbridges from eight to 16 within the next five years, with "a bias in facility provision towards Asian passengers," said Venermo.
November 2015: News Item A-1: "Finnair (FIN) Finalizes Flybe Nordic (FCA) Sale" by (ATW) Victoria Moores, November 4, 2015.
Finnair (FIN) has finalized a deal to sell 60% of Nordic Regional Airlines (Norra), formerly known as Flybe Nordic (FCA), to Finnish investors StaffPoint Holding and Kilco Oy for €1/$1.09.
In January, (FIN) signed a memorandum of understanding (MOU) to sell the 60% stake to human resources (HR) specialist, StaffPoint and G W Sohlberg (GWS). But, in a November 4 stock exchange disclosure, (FIN) said Kilco Oy had stepped in to replace (GWS).
Kilco Oy is an investment company which is owned by StaffPoint (CEO), Mika Kiljunen’s family. It is also a shareholder in StaffPoint.
“Finnair (FIN), StaffPoint Holding and Kilco Oy have now agreed on transactions whereby 60% of the shares in Nordic Regional Airlines (FCA) would be transferred to the ownership of StaffPoint and Kilco. The latter enters the arrangement in lieu of (GWS), which was previously part of the negotiations,” (FIN) said in the disclosure.
Following the acquisition, which will require Finnish competition clearance, StaffPoint will hold 45% of Nordic Regional Airlines (FCA), Kilco will own 15%, and (FIN) will hold 40%.
“We are satisfied that the negotiations reached a conclusion and that Norra (FCA) and its board of directors are now free to keep developing the company and improving the profitability of regional flying,” Finnair (FIN) (CEO) Pekka Vauramo said.
Flybe Nordic (FCA) was a joint venture (JV) between (FIN) and Flybe (BEE). (FIN) assumed full control of the (JV) in March, in preparation for the onward sale. Norra (FCA) operates a fleet of 26 ATR 72 and Embraer (EMB) aircraft on domestic and European routes.
Upon completion of the sale, StaffPoint’s will have a 45% stake in Norra, while Kilco will hold 15% and (FIN), 40%. The transaction is expected to close later this month.
News Item A-2: Finnair (FIN) is planning to increase traffic on its European feeder network with an eye on growing long-haul capacity. As a 1st step, (FIN) will temporarily lease 2 Airbus A321 narrow body aircraft, including part of the flight crew (FC) for 1 year from May 2016 onward.
Both A321s could be wet leased from Austria-based, airberlin (BER) subsidiary, FlyNiki (NKI).
(FIN) (CEO) Pekka Vauramo said recently in Vienna (FIN) is “adding some capacity to our feeder traffic by upgauging our aircraft size in order to enable our growth.” Because its new Airbus A350 XWB is growing long-haul traffic, “we also need more capacity on feeder routes between Europe and Helsinki,” he said.
Finnair (FIN)’s narrow body fleet used on its European network is already being efficiently utilized, and the passenger load factors are high. Hence, the company is planning to downsize its smaller set-capacity Embraer fleet and retire 1 ATR aircraft.
Overall, (FIN) is looking for way to increase narrow body capacity and is assessing the best alternatives for growth. (FIN) has already begun recruiting pilots (FC) and cabin crew (CA).
Vauramo said (FIN) is evaluating which type of aircraft it should acquire for its future narrow body fleet. “We are still open at this moment [to talk with all major aircraft manufacturers] and must decide [on an aircraft type] by the end of this year. The number of new aircraft we need will remain the same as what we currently have.”
(FIN), the Oneworld (ONW) Alliance member took delivery of its 1st A350-900 XWB aircraft on October 7, 2015, and should take delivery of +5 more of the type at the beginning of the 2016 2nd quarter, 7 by the end of 2016, 11 by the end of 2017, and 19 by the end of 2023.
Some of the new A350s will add to Finnair (FIN)’s fleet numbers, while some will replace wide body aircraft with smaller passenger capacity.
Eventually, (FIN) is considering operating its own A350 simulator, but it will take a couple of years to reach the training volume necessary to make that investment.
(FIN)’s strategic objective is to double its traffic between Asia and Europe by 2020 from the 2010 level.
December 2015: News Item A-1: Finnair (FIN) and Jetstar Asia (JSA) will code share on all flights through Singapore’s Changi Airport. From December 15, 2015, (FIN) customers will be able to travel on (JSA) services out of its Singapore hub.
News Item A-2: Finnair (FIN) completed the sale of 60% of Nordic Regional Airlines (Norra) (FCA) to human resources (HR) specialist, StaffPoint Holding and investment company Kilco.
Norra was previously known as Flybe Nordic (FCA), a joint venture (JV) between (FIN) and UK-based regional operator Flybe (BEE), which announced it was pulling out of the arrangement in November 2014 in the face of mounting losses.
“The transaction in which (FIN) transfers 60% of the shares in has been completed today,” (FIN) said in a disclosure released on November 30.
(FIN) temporarily took 100% control of Norra (FCA), while it sought new shareholders. It has retained 40% of the regional airline, with StaffPoint taking a 45% stake and Kilco acquiring the remaining 15%.
News Item A-3: Finnair (FIN) will shortly launch a EUR4 million/USD4.39 million share buy-back initiative. Under the drive, (FIN) will attempt to reacquire 800,000 shares corresponding to about 0.62% of the total number of airline shares and votes.
Repurchased stock will be used primarily for (FIN)’s Employee Share Savings Plan (FlyShare) and a long-term share-based incentive scheme aimed at key personnel.
The share repurchases will start on December 28, 2015 and will end no later than May 30, 2016. The shares shall be acquired through public trading on the Nasdaq Helsinki exchange at the market price prevailing at the time of repurchase.
News Item A-4: (GE) Capital Aviation Services (GECAS) (GEC) completed a purchase-and-leaseback transaction involving two new Airbus A350-900 XWB aircraft with Finnair (FIN). The aircraft delivered in October and December and are part of (FIN)’s long-haul fleet renewal program.
January 2016: News Item A-1: Finnair (FIN) is to offer weekly Enontekiö - Helsinki ATR service from February 20 to April 9.
News Item A-2: (SITA) fares analysis technology has been selected by Finnair (FIN) to manage the setting of fares in both its national and international markets. (SITA)’s "Airfare Insight," part of the Horizon portfolio, allows (FIN) to make rapid adjustments to fares in response to market conditions, in order to stay ahead of the competition.
News Item A-3: "Finnair (FIN) to Lease 4 Airbus A321s" by (ATW) Victoria Moores, January 4, 2016.
Finnair (FIN) has signed a memorandum of understanding (MOU) to lease 4 new Airbus A321-200s from (BOC) Aviation (SIL) and has detailed plans to dispose of 4 aircraft.
If the lease deal is firmed, the 4 206Y-seat A321s will be delivered to (FIN) in the 1st half of 2017 for a minimum term of 8 years. “In November, (FIN) had announced the temporary damp lease of 2 A321 aircraft from summer 2016 onwards. This arrangement is intended to cover the transitional period until the delivery of the 4 A321 aircraft, now dry leased from (BOC) Aviation (SIL), for the longer term,” (FIN) said.
The aircraft additions fit with (FIN)’s recently announced plans to increase the seating density of its narrow body fleet and make a gradual shift towards larger aircraft, to increase its long-haul feeder capacity.
As part of its ongoing fleet revamp, (FIN) is also selling 4 “surplus aircraft,” comprising 1 ATR, 3 Embraer E170s and 1 A340.
The ATR and E170s will be retired from (FIN) and Nordic Regional Airlines (Norra) in January - February 2016, following the regional carrier’s recent transition to new ownership, and the A340 will be sent for part-out in the 1st half of 2016.
“The transactions are part of (FIN)’s fleet renewal, the 1st phase of which consists of replacing aging long-haul A340 wide body aircraft with modern A350s,” (FIN) said.
(FIN) has 19 A350-900s on order and received its 1st 2 deliveries in October and December 2015. “According to the currently anticipated delivery schedule, (FIN) will have 5 A350-900 aircraft at the beginning of the 2nd quarter of 2016, 7 by the end of 2016, 11 by the end of 2017, and 19 by the end of 2023,” (FIN) said.
On December 23, (FIN) signed a memorandum of understanding (MOU) with (GE) Capital Aviation Services Limited (GECAS) (GEF), covering the sale and 12-year leaseback of two A350s. The pair of aircraft will be the 6th and 7th A350s to join (FIN)'s fleet, scheduled for delivery in July 2016 and February 2017.
(FIN) said the (GECAS) (GEF) transaction will boost its operating profit by approximately +€90 million/+$98 million. “The income will be recognized in connection with each delivery, which given current delivery schedules will be reflected in the (Q3) 2016 and (Q1) 2017 financial statements, respectively,” it said.
February 2016: News Item A-1: Finland flag carrier Finnair (FIN) has reported a full-year net income of +€89.7 million/+$100.7 million for 2015, reversed from a -€82.5 million loss in the year-ago period.
“We are heading in the right direction, and we will now look to accelerate our profitable growth,” (FIN) (CEO) Pekka Vauramo said.
Full-year revenue rose +1.7% to €2.3 billion, while expenses lowered -0.8% to €2.1 billion, producing an operating profit of +€23.7 million, reversing a -€36.5 million prior-year operating loss. Ancillary revenue per passenger grew +23.7% year-on-year to reach €10.16 per passenger.
Finnair (FIN) has not felt the full benefit of the fall in fuel prices due to hedging, but it said: “We estimate that our fuel costs will decline further in the coming quarters in spite of increasing traffic volume, which will support our performance in 2016.”
During the year, (FIN) carried more than >10 million passengers. Unit revenue at constant currency (RASK) decreased by -1.0% year-on-year, while (CASK) ex-fuel was +0.6% up year-on-year.
“Despite of the demand outlook for passenger and cargo traffic in (FIN)’s main markets involving renewed uncertainty, (FIN) estimates that, in 2016, its capacity and revenue will grow. The lower price of jet fuel supports Finnair’s financial performance in 2016. (FIN) will issue guidance for its expected full-year operational result in connection with the January - June interim report,” (FIN) said.
News Item A-2: Finnair (FIN) commenced services on the 895 km domestic link from Helsinki (HEL) to Enontekiö (ENF) on February 20. The city pair will be flown weekly on Saturdays by 72-seat ATR 72s facing no direct competition. With a flight number of AY531, services leave the finish capital at 07:25, with Flightradar24.com confirming that the 1st flight left Helsinki with a 10-minute delay. The service then arrives in Enontekiö at 09:40, with the 1st flight landing on time, making up its short delay in the air. Return flights (AY532), leave the north Finnish airport at 10:10, arriving into Helsinki at 12:25. The return flight of the inaugural service did not encounter a delay, actually arriving into the capital one minute ahead of schedule at 12:24.
May 2016: News Item A-1: Finland flag carrier, Finnair (FIN) reported a 1st-quarter net loss of -€15.1 million/-$17.2 million, narrowed -53.2% from a net loss of -€9.8 million in the year-ago period. “We achieved a substantial improvement in our result for the 1st quarter, which is typically the weakest season of the year. While the result still shows a loss, the past quarter was the 6th consecutive quarter in which we achieved a year-on-year improvement in performance. Our comparable operating result was -€15.3 million, which represents an improvement of a good +€13 million compared to the previous year,” Finnair (FIN) (CEO) Pekka Vauramo said.
For the period ended March 31, (FIN)’s revenue rose +2.9% to €536.4 million, while expenses increased +0.2% to €573.8 million, producing an operating loss of -€15.3 million, narrowed -46% from a -€28.4 million operating loss in the prior-year quarter.
“The Paris incidents meant we lost some revenue. Not a major part of it, but it did not strengthen our results in the 1st quarter. We expect the Brussels attacks to have a minor impact in the second quarter,” Vauramo said on the results conference call.
Traffic rose +10.2% to 199 million (RPK)s on a +4.8% increase in capacity to 354 million (ASK)s, producing a load factor of 64.9% LF, up 1.4 point. “One positive aspect of the result was that ticket revenue relative to available seat kms held up well in spite of a significant increase in supply,” (FIN) said.
However, cargo remained difficult due to overcapacity, with revenues declining despite increased volumes.
Yield dipped -0.4% to 6.56 cents as (RASK) lowered -2.2% to 6.61 cents and (CASK) decreased -4.6% to 6.79 cents. (CASM) ex-fuel was 5.30 cents, up +2.6%.
(FIN) is not able to feel the full benefit of lower fuel prices because of its strategy of hedging 24 months in advance, which caused a -€43 million hit in the quarter. “For this reason, our fuel costs will decline further in spite of increasing traffic volume, which will support our profit during the remainder of the year,” (FIN) said.
Ancillary and retail revenue grew to approximately €30 million in the first quarter, rising +17% on a per passenger basis to €11.87.
“The demand outlook for passenger and cargo traffic in (FIN)’s main markets involves renewed uncertainty. (FIN) estimates that in 2016 its capacity, as measured in available seat kms, will grow by approximately +8% and that its revenue will grow at a slightly slower rate. The lower price of jet fuel supports (FIN)’s financial performance in 2016,” (FIN) said, repeating the guidance it gave in February.
News Item A-2: Finnair (FIN) launched 2 services to Asia from its Helsinki (HEL) hub on May 6 and 7, starting on the former date with a 4x-weekly service to Guangzhou (CAN). Services on the 7,670 km sector to the Chinese city will be operated 4x-weekly on board (FIN)’s A330-300 fleet.
The next day (FIN) commenced services to Fukuoka (FUK), (FIN)’s fourth destination in Japan after Tokyo Narita, Osaka Kansai, and Nagoya.
Timo Järvelä, Head of Key Account Management & Route Development, Finavia, said that (FIN) and Japan Airlines (JAL), which operates to Tokyo Narita from Helsinki, expect to carry approximately 600,000 passengers between them this year on services between the Finish capital and Japan, on >30 weekly flights. At a distance of 7,586 km, the city pair will be flown 3x-weekly (Tuesdays, Thursdays and Saturdays. Return journeys operate on Wednesdays, Fridays and Sundays).
Finnair (FIN) will also utilize its A330-300 fleet on its latest Japanese route, with Helsinki becoming Fukuoka’s only European destination. Fukuoka used to see service from (KLM) on a route to Amsterdam, however, the route was dropped on January 3 this year.
Neither of (FIN)’s two new routes to Asia will face direct competition. On May 7, (FIN) also commenced a 3rd route from Helsinki, in the form of a weekly (Saturdays) service to Santorini (JTR). Originally operated by the carrier as a charter, the now scheduled 2,659 km route will be operated by (FIN)’s fleet of A321s, facing no incumbents.
August 2016: News Item A-1: Finnish airline Finnair (FIN) is to add services to the Greek island of Corfu, the Spanish islands of Ibiza and Menorca, as well as Reykjavik in Iceland, for summer 2017.
Corfu and Menorca will join (FIN)’s network between April 11 and October 28 2017, operating as a single weekly frequency. Ibiza, also once weekly, will run from June 17 to August 12.
(FIN) will serve Reykjavik 4x-weekly, building on its existing code share with Icelandair (ICE). “(FIN)’s route will offer one of the fastest connections between Asia and Iceland,” (FIN) said.
(FIN) is also increasing its capacity to Dublin (9x-weekly) and Edinburgh (5x-weekly), as well as deploying Airbus A350s on some of its London services.
The new routes form part of Finnair (FIN)’s growth strategy. During its recent earnings call, (FIN) reduced its full-year growth target to 7% from 8%, blaming the late arrival of its A350s. (FIN) was the European launch operator for the twinjet.
(FIN) serves 17 cities in Asia and more than >60 destinations in Europe.
News Item A-2: Finnair (FIN) has narrowed capacity growth forecast for 2016 - 2017, blaming disruption to Airbus A350 deliveries that are an average of 2 months behind schedule.
“(FIN)’s new estimate of capacity growth is approximately +7%, while the previous estimate was a growth of +8% compared to 2015. The revision is due to delays in the deliveries of A350 aircraft,” (FIN) said in its 2nd-quarter earnings release.
(FIN), which was the European launch customer for the twinjet, has 19 A350s on order. 3 of these were delivered in 2015, followed by a further 3 in the 1st half of 2016, taking it to 6 in total. “We have felt quite a lot of pain from the A350 delivery delays,” (FIN) (CEO), Pekka Vauramo said, speaking on the 2nd-quarter earnings call. “At this point, deliveries are delayed by an average of 2 months, but there has been variation and that is the difficult part because of crew rostering. We have been forced to take wet leases, increasing costs, but we would rather fly the flights that we’ve sold, than cancel them. We have had some cancellations, but there are very few at the moment.”
Vauramo said the situation has “contributed negatively” to (FIN)’s revenue growth, a problem further compounded by “revenue softness” in Europe. “What has been equally disturbing is that it’s also affected our crew training and the release of our A340s,” he said.
According to the current delivery schedule, (FIN) will have 7 A350s by the end of 2016, 11 by the end of 2017 and 19 by the end of 2023.
On the flip side, Vauramo said: “The fuel efficiency of the A350 is starting to be visible in our fuel consumption figures. That is good news.” (FIN) has also had excellent customer feedback on the A350 and a “steady improvement” in customer satisfaction on its A330s and A340s.
As part of its product improvement strategy, (FIN) is outfitting its entire long-haul fleet with Wi-Fi connectivity, which should be completed in 2017. “We now have a firm schedule. We have started installations and we will have all those aircraft done next year,” Vauramo said.
By 2017, (FIN) plans to phase out its A340s, selling 4 back to Airbus in 2016 and 2017. At the end of June 2016, (FIN) operated 48 aircraft, comprising 18 wide bodies and 30 narrow bodies. “In terms of individual carriers, we wouldn’t make any comment, but the delivery sequence is agreed well in advance with the customer,” an Airbus (EDS) spokesman said. “We have a target of at least 50 deliveries this year and we are maintaining that target.”
September 2016: Finnair (FIN) will begin installing ViaSat’s high-speed Wi-Fi network on its entire A320 family aircraft fleet in May 2017. The work is estimated to be completed by June 2018.
With a connection speed of 12 Mbps or higher per passenger, (FIN) said the new system will offer the fastest in-flight internet connection currently available on the market. ViaSat will ensure end-to-end in-flight connectivity service across the (FIN) fleet, and has partnered with French satellite provider Eutelsat to deliver the high-speed satellite-based internet service, which will cover the entire European continent.
In July, (FIN) announced it will begin installing Panasonic Avionics Corporation Wi-Fi on its 8 A330-300s in October. Installation is estimated to be completed in May 2017.
Finnair (FIN) also operates 6 A350 XWBs, which already offer Wi-Fi connectivity. Additionally, China authorities have opened up (FIN)’s Wi-Fi coverage over Chinese airspace. (FIN) expects to receive an additional 5 A350-900s by the end of next year.
With both the long- and short-haul fleet set to offer internet connectivity by June 2018, more than >1,000 route pairs in (FIN)’s network will offer Wi-Fi connectivity for transiting passengers.
In April 2015, (FIN) approved a €30 million/$31.7 million investment program to bring Wi-Fi connectivity to the majority of its wide body and narrow body fleet.
As of June 30, (FIN) operates a narrow body fleet of 9 Airbus A319, 10 A320s and 11 A321s.
October 2016: Finnair (FIN) recorded a 3rd-quarter net profit of +€87.6 million/+$95.6 million, more than doubled from +€39 million for the year-ago period. (FIN) the Finnish flag carrier achieved the result on revenue of €640.9 million, up +3% on the comparable period last year. However, (FIN) said the next few months would see increasing uncertainty. (FIN) reiterated its previous assessment that its 2016 capacity would grow by approximately +7% compared to 2015, but revenue would grow more slowly.
(FIN) said market conditions were increasingly challenging, with a rise in fuel prices and market capacity growth continuing to put pressure on yields. “Considering the current market environment, we are satisfied about breaking the record result posted in the comparison period,” (CEO) Pekka Vauramo said. Capacity in (3Q) grew +8.4% compared to the same period a year ago, with the bulk of that figure coming from North Atlantic and Asian routes.
Load factors dipped from 85.8% LF to 84.2% LF compared to a year earlier, mainly because of increased capacity on North Atlantic routes. “Intense competition across the North Atlantic put pressure on our yields and affected our earnings performance somewhat,” Vauramo said. “Furthermore, the flow of leisure travel (from China in particular) was impacted by concerns about security conditions in Europe. This led to reduced materialization of group reservations, which was reflected in our Asian load factors.
“During the 3rd quarter, we succeeded in attracting more Asian tourists to the Nordic region rather than Southern or Central Europe; for example, Copenhagen recently surpassed Paris as the number 1 destination for our Chinese tourist groups.”
Vauramo said, “In addition, we are promoting Finland as a stopover or holiday destination, particularly during the winter months, when we are adding more capacity to Lapland.”
In October (FIN) introduced a 5x-weekly Airbus A350 service to London, “which provides both an attractive product for our Asian transfer passengers as well as an outstanding entry point from our home markets to the global network of our Oneworld (ONW) Alliance and joint business partners from London,” he said, adding, “It strengthens our cargo network considerably.”
Vauramo said the introduction of the A350 was going well, with dispatch reliability improving. (FIN) had encountered some training and spare part availability issues, he said, but dispatch reliability was getting closer to that of the rest of the fleet.
“Our costs increased in the 3rd quarter, reflecting our preparation for traffic growth in line with our strategy, driven by our new A350 aircraft. However, due to changes in the delivery schedule of these aircraft, there is considerable uncertainty related to the training of our flight (FC) personnel,” he said. “As a result, we are adjusting our traffic plan and leasing additional fleet with crew in order to be able to train our own staff as rapidly as possible,” Vauramo said. “Preparation for growth will cause extra costs over the next few years.” He put that figure as €20 - €25 million a year.
“We continue to believe that our full-year result will be in line with our previous guidance, but point out that the rest of the year involves a lot of uncertainty and cost pressure,” he said.
November 2016: "Enough is Enough!" by Victoria Moores email@example.com in (ATW) Need I say Moores, November 17, 2016.
At the end of 2014, Finnair (FIN) (CEO) Pekka Vauramo told his staff they had done enough towards (FIN)’s turnaround. Is this a lesson other European airlines can learn from, or a fantasy in today’s hyper-competitive market?
When Vauramo joined (FIN), the airline was midway through a €200 million/$217 million restructuring plan. He knew he wasn’t going to get a simple agreement from his staff, so he controversially extended the timelines to make sure he had labor buy-in. “To build trust, you need credibility. I thought it was not going to end nicely. At the end of 2014, we achieved what we needed to achieve. I made a key, simple statement: “It’s over now.” People still ask what happens if we don’t succeed; I can’t give guarantees [but it is enough for now].”
Vauramo said this simple phrase ("it’s over now”) completely changed the atmosphere of the airline. “More than half of our personnel are customer facing. Our cabin crew each have 20,000 passenger encounters a year. If we want to succeed in all 20,000 encounters, we have to make sure they are motivated to come to work every day. The smile is back, the service is different, but we didn’t change the product.”
I heard this story just after visiting Paris for the launch of Air France (AFA) - (KLM)’s 3rd major turnaround strategy over recent years. This is a plan aimed at bridging (AFA) - (KLM)’s labor rift, yet (AFA) - (KLM) Chairman & (CEO) Jean-Marc Janaillac’s comments seemed a little flippant for an airline trying to make peace with its staff: “I would say [the response] was ‘not negative,’ rather than ‘positive.’ These are French unions; it would be a bit worrying if their response was positive,” he said.
The difficulty is that those people who are responsible for thousands of customer interactions are constantly being asked to give more. They then protest fiercely at those demands in equal measure. This deters the very passengers that the airline is trying to keep, handing over business to rivals and kicking off a new lap of the vicious circle that will only end in self destruction.
(AFA) - (KLM) is not alone. Just days after I spoke with Vauramo, one of Lufthansa (DLH)’s unions threatened strike action. “(DLH) has not been able to adjust its salary for >5 years, while (DLH) has made a profit of >€5 billion/$5.6 billion over the same period. In addition, inflation has led to a significant drop in purchasing power during this period,” the union said.
It is easy to understand why labor groups get sick of being asked for more. Yet competitive pressures are fierce. Airlines with outdated structures have to become more efficient to survive. When labor demands more, it could ultimately cost them (and all their colleagues) their jobs.
The sad truth is that some of European network airlines are sitting at the wrong end of every labor-productivity graph, giving rise to fierce ultimatums between productivity agreements and job cuts. There is an "us and them" mentality. It’s a battle, rather than a partnership. Management are trying to win back power from their unions, who have held the upper hand for a long time and are not giving up without a fight.
The critical part in the Finnair (FIN) story is that absent guarantee. It may not be possible to say “enough is enough,” but “enough for now” might be the words that airline staff are waiting to hear.
December 2016: Finnair (FIN) entered into an agreement with (CDB) Aviation Lease Finance for a long-term lease of 2 new Airbus A321-200s. The 1st aircraft is scheduled for delivery for the winter season 2017/2018 and the 2nd for the summer season 2018. The lease agreements have a minimum term of 8 years.
January 2017: News Item A-1: Finland flag carrier Finnair (FIN) has extended the lease on an Iberia (IBE) Airbus A330 until May 31 because of A350 crew training delays. The A330 had been scheduled to leave the fleet January 31.
(FIN), the Oneworld (ONW) Alliance carrier had planned to use the A330 on its 3x-weekly Miami route only from January 10 - 31, but this 21-day lease has now been extended to just <4 months. The 3 year old (IBE) A330 has 36 full-flat business (C) and 242Y seats in economy, equipped with seat-back in-flight entertainment.
Over the period January 10 - 31, the A330 will operate on wet-lease, manned by (IBE) pilots (FC) and cabin crew (CA) with 2 Finnair (FIN) crew members supervising service delivery. From February 1, it will transition to a damp lease, staffed with cockpit crew (FC) from Iberia (IBE) and cabin crew (CA) from Finnair (FIN).
“The lease is to accommodate pilot (FC) training that is necessary to secure (FIN)’s growing operations for the summer 2017 season and beyond. Due to the arrival of additional A350 aircraft in 2017, (FIN) is currently training its A330 pilots (FC) for A350 operations. The pilot (FC) training will continue during the spring of 2017,” (FIN) said.
(FIN), the A350 launch customer, has already suffered some disruption as a result of the fleet transition. In August 2016, (FIN) revised downward capacity growth plans for 2016 - 2017 from +8% to +7% against 2015, citing disruption to A350 deliveries that were an average of 2 months behind schedule.
In October, (FIN) detailed plans to suspend or cancel services on 2 Asian routes, also because of A350 pilot (FC) training. Training takes the flight deck crew (FC) away from normal duties, which puts a temporary strain on (FIN)’s pilot (FC) resources.
(FIN) has 19 A350s on order. Under the delivery schedule detailed in August, (FIN) planned to have 7 A350s by the end of 2016, 11 by the end of 2017 and 19 by the end of 2023.
In November, (FIN) (CEO) Pekka Vauramo said (FIN) has had “teething issues” with the A350, but this has been driven by non-technical issues such as unfamiliarity, parts availability, crew rostering, training schedules and a shortage of simulator capacity. “We didn’t grow for many years, so we were not aware of the bottlenecks. Every time we need to wet lease an aircraft, it’s disappointing because it shows we haven’t been able to plan ahead. But we still want to maintain most of the flights that we have sold, so this is an additional cost that we are willing to take. We then have to take action and make sure that we don’t face similar bottlenecks in future,” he said.
News Item A-2: Finnair (FIN) was chosen by the (ECS) Group as a general sales agent (GSA) in 6 Asian air cargo markets, which include Malaysia, Indonesia, Vietnam, Philippines, Cambodia as well as extending the current main contract for Singapore.
February 2017: A319-112 (1916, OH-LVG), ex-(D-ASEE) and A321-231 (7552, OH-LZM), ex-(D-AVXV), (BOC) Aviation (SIL) leased, deliveries.
April 2017: Finnair (FIN) has added Iceland to its European network this month, starting a 4x-weekly service between Helsinki (HEL) and Reykjavik/Keflavik (KEF). “Iceland is a fantastic destination, and we are very pleased to be able to offer this exciting route to our customers. We are also happy to make Iceland part of our network connecting travelers from all over the world,” said Robert Lönnblad, General Manager Scandinavia, (FIN) at the launch. Launched on April 11, (FIN) the Oneworld (ONW) Alliance carrier will operate the 2,441-km sector utilizing a mixture of its single-aisle Airbus fleet. The route is already flown by Icelandair (ICE) 8x-weekly. With this launch, Reykjavik/Keflavik becomes (FIN)’s most westerly European destination. With Reykjavik/Keflavik’s longitude being 22°55’83” W, it beats Funchal, which has a longitude of 16°92’41” W, to take the title.
May 2017: A321-231 (7661, OH-LZP), ex-(D-AVYN), (BOC) Aviation (SIL) leased, A340-313E (844, OH-LCC), for storage, re-registered (F-WXAG).
June 2017: Finnair (FIN) (CEO) Pekka Vauramo is to chair the governing board of the Oneworld (ONW) alliance for the coming 2 years. Vauramo took up the role at (ONW)’s mid-year board meeting, held on the sidelines of the (IATA) (AGM) in Cancun, Mexico.
He takes over the Chairmanship of former Cathay Pacific (CAT) (CEO) Ivan Chu, who has since moved to another role and been succeeded by Rupert Hogg. Vauramo will chair Oneworld (ONW) board meetings, oversee alliance governance and work closely with (ONW) (CEO) Rob Gurney and the central alliance team.
He has been (FIN) (CEO) since 2013, leading (FIN)’s turnaround and growth strategy. He previously served with Finnish cargo and load handling company Cargotec and with Sandvik, the Swedish mining and construction company, in various senior management positions.
Oneworld (ONW)’s member airlines carry 550 million passengers a year across their fleet of 3,500 aircraft, generating $130 billion in annual revenues.
September 2017: Finnair (FIN) has increased its full-year profit expectations to +€135 to +€155 million/+$162 to +$186 million), up from around +€110 million from the previous guidance in July. (FIN) said it was raising its outlook following a good summer performance. In July, (FIN) had warned that passenger and cargo demand in its main markets was uncertain, but capacity and revenue were still slated to grow +8% to +10%.
October 2017: News Item A-1: Finnair (FIN) reported a 2017 3rd-quarter net income of €93.6 million/$109.3 million, up +6.8% compared to net profit of +€87.6 million a year ago as (FIN), the Finnish national carrier continues expansion plans based on the strong quarterly performance. Revenue for the quarter was up +14.7% year-over-year (YOY) at €735.4 million. 3rd-quarter passenger numbers rose +9.6% (YO)Y, to 3.3 million, together with a +3% rise in load factor to 87.2% LF.
News Item A-2: A significant expansion of Finnair (FIN)’s capacity to Asian destinations has been the major factor behind (FIN)’s improved financial figures in 2017, (FIN)’s (CCO) said October 13. (CCO) Juha Järvinen said the growth in outbound Chinese tourism traffic showed no sign of abating (Finnair (FIN) has recently announced its 7th destination in the country, Nanjing) while Japan was also proving a successful destination.
News Item A-3: Finnair (FIN) will open new routes from its Helsinki hub to Norway's Bergen and Tromsø in May 2018, as a part of its continuing growth strategy. The routes will be operated by Norwegian regional airline Widerøe, and the flights will be sold and marketed by (FIN), the Finland flag carrier. Beginning May 15, 2018, Widerøe will operate a daily Bergen to Helsinki Finnair flight, with a new Embraer 190-E2 aircraft.
November 2017: News Item A-1: Finnair (FIN) has again stepped up its 2017 full-year operating profit outlook to >+€155 million/+$180 million (nearly triple the €55 million figure it posted in 2016) exceeding the top end of its most recent €135 to 155 million guidance.
(FIN), the Finnish flag carrier originally expected to deliver a +€110 operating profit in 2017, doubling its 2016 performance, but this was upgraded to the +€135 to +$155 million range in September.
However, (FIN) said on November 10 that passenger and cargo traffic sales have developed better than forecasted. This triggered the latest outlook revision. “(FIN) expects its comparable operating result for 2017 to be >€155 million.”
(FIN) reiterated its prior commitment to hitting +9% capacity growth across the full year, but said revenue would grow slightly faster than capacity. (FIN) previously said revenue would grow in line with capacity.
In 2016, (FIN) carried almost 11 million passengers, generating €2.3 billion in revenue.
News Item A-2: Finnair will again take full control of its regional airline, Nordic Regional Airlines (Norra), in November after the transaction secured clearance from Finland’s competition authorities.
This marks Norra’s 3rd change of ownership in 2 years. The regional airline originally flew as Flybe Nordic, but UK-based regional operator Flybe (BEE) exited the equity joint venture in 2015 in the face of mounting losses.
(FIN) took on (BEE)’s 60% share as an interim measure, giving it full ownership of newly rebranded Norra, while it negotiated selling the 60% stake to human resources specialist, StaffPoint Holding (45%) and G W Sohlberg (15%), although G W Sohlberg was ultimately replaced by investment company Kilco which took on the 15% stake. This transaction was cleared by the competition authorities in November 2015.
However, on October 11 (FIN) announced that StaffPoint Holding and Kilco were withdrawing from Norra because of a change of ownership at StaffPoint.
(FIN) has now been cleared by the Finnish Competition and Consumer Authority (FCCA) to take back full control of the airline for a 2nd time, stepping up its 40% stake to 100%.
“The transaction is expected to close in November 2017, and thereby Norra will transfer to (FIN)’s full ownership on an interim basis. (FIN) aims to find a new majority owner for Norra,” (FIN) said November 9.
Norra operates (FIN)’s domestic and European routes using a fleet of 24 ATRs and Embraers. (FIN) has said that the change of ownership will have no impact on Norra’s operations or personnel. “Recent years have shown that the partnership model can be successful in domestic and regional purchase traffic. Our aim is to find a new, industrial partner to develop Norra’s business further with us,” (FIN) (COO) Jaakko Schildt said.
December 2017: (CDB) Aviation has also delivered the 1st of 2 new Airbus A321-200s on long-term lease to Finnair (FIN).
February 2018: News Item A-1: Finnair (FIN) said it would open a direct, year-round route between Helsinki and Minsk, Belarus as it continues its network expansion. The new 2x-weekly Embraer (EMB) E190 service will launch June 9.
(FIN) currently cooperates with Belarusian carrier Belavia (BLV) on the Helsinki to Minsk route and (FIN)’s own flights will bring the total number of weekly flights up to 5.
“A direct route to Minsk compliments our network well and will serve especially well customers traveling between Belarus and North America,” (FIN) (CCO) Juha Jarvinen said. “Additionally, our new Minsk flights will connect well to (FIN)’s Asian and European network.”
(FIN) has been expanding rapidly and in the 12 months ended December 31, 2017, passenger numbers rose +9.6% to 11.9 million, (FIN) said as it presented its full-year results on February 16.
It increased capacity +8.9% in 2017, but traffic growth was higher at +13.6%, giving it an average load factor up +3.5 points at 83.3% LF.
(FIN) plans to boost capacity by >15% in 2018.
News Item A-2: "Finnair to Offer Digital Newspapers on Its Long-haul Flights" by China Aviation Daily, February 08, 2018.
Finnair (FIN) is making available a wide selection of international newspapers in digital format for customers on its long-haul flights. As of February 8, >50 international newspapers can be read in pdf format through the Nordic Sky portal that is available on board (FIN)'s A330 and A350 aircraft. Customers can use the portal with their own devices, and do not need to purchase a Wi-Fi connection to access the newspapers.
"We are happy to be able to offer a wide selection of digital newspapers to our international customers," said Tiina Vesterinen, Director for Customer Experience Development at (FIN). "With digital papers, customers always get the latest copy, regardless of where their flight is departing from, and we never run out of stock."
At the same time, (FIN) will discontinue distributing paper versions of newspapers on its long-haul flights. Paper issues will remain on European flights for the time being, until Finnair's European fleet is also equipped with Wi-Fi later this year.
At this stage, digital newspapers are provided free of charge in both business (C) and economy (Y) class of (FIN)'s long-haul flights, as well as on the Helsinki to London to Helsinki flight flown with an A350 aircraft.
March 2018: News Item A-1: "Finnair to Lease an A320 Aircraft and Pilots from GetJet to Operate on Some of Finnair's European Routes Between June 2018 and January 2019" by China Aviation Daily, March 15, 2018.
Finnair (FIN) will lease an Airbus A320 aircraft and flight deck crew (FC) from the Lithuanian airline GetJet to support (FIN)'s growing traffic from summer 2018 to early 2019.
The leased GetJet aircraft will operate some of (FIN)'s flights from Helsinki to Budapest, Berlin, Vienna, Prague, Krakow and Pafos between 2018-06 and 2019-07. The pilots (FC) will be from GetJet while the cabin crew (CA) and service concept will be from Finnair (FIN). "We have a record number of flights next summer to both Asia and Europe. The leased aircraft will for its part, ensure that we are able to operate all the flights in our traffic plan," said Juha Järvinen, Chief Commercial Officer (CCO) at (FIN).
Customers are able to see the operating carrier when they are making their bookings on Finnair.com. Customers who already have a reservation on 1 of the flights that will be operated with the leased aircraft will be informed of the change in operating carrier through s text message or email. Customers can change their travel date due to this change in operating carrier if they so wish.
News Item A-2: Finnair (FIN) has contracted 2 northern European airlines to provide additional capacity over coming months.
(FIN), the Finnish flag-carrier is leasing an Airbus A320 from Lithuanian airline GetJet from summer 2018 to early 2019, to support the growth in (FIN)’s traffic. It is also bringing in a Boeing 737-700 from Danish charter and wet-lease (ACMI) specialist Jet Time (JTM) between March 25 and June 7, to cover for changes to the maintenance schedules of (FIN)’s own fleet over that period.
The GetJet aircraft will operate some of (FIN)’s flights from Helsinki to Budapest, Berlin, Vienna, Prague, Krakow and Paphos. GetJet, the Lithuanian airline will supply the flight deck crew (FC), while the cabin crew (CA) and in-flight service model will be from Finnair (FIN).
“We have a record number of flights next summer to both Asia and Europe. The leased aircraft will for its part ensure that we are able to operate all the flights in our traffic plan,” (FIN) (CCO) Juha Järvinen said.
The Jet Time (JTM) aircraft, meanwhile, will operate some flights to and from Berlin, Budapest and Vienna. (JTM) will supply both flight deck (FC) and cabin crew (CA), although 1 (FIN) cabin crew (CA) member will be allocated to each flight to support the in-flight service, which will operate (FIN)’s food and beverage model.
April 2018: News Item A-1: "Finnair, Alaska Airlines to Begin Code Share Partnership" by (ATW) Kurt Hofmann (firstname.lastname@example.org), April 20, 2018.
Oneworld (ONW) member Finnair (FIN) and Seattle-based Alaska Airlines (ASA) have signed a code share agreement, starting May 20.
(FIN) added its AY code on Alaska Airlines (ASA) flights between San Francisco (California) and Seattle (Washington), Portland (Oregon), Salt Lake City (Utah), Las Vegas (Nevada), Los Angeles, San Diego, Orange County and Palm Springs (California).
Finnair (FIN) will operate up to 3x-weekly, Helsinki to San Francisco services between May 3 and December 5, 2018.
(FIN) Head of Partnerships & Alliances Philip Lewin said the new code shares will “help us widen our network on the west coast. San Francisco is a key destination for (FIN) and we have just extended the season until early December due to strong demand.”
(FIN) and (ASA) announced a frequent flyer partnership in May 2017, enabling members of each other’s loyalty program to earn and redeem miles or points on flights operated by both airlines.
May 2018: News Item A-1: Oneworld (ONW) Alliance member Finnair (FIN) will add 9 new destinations to its code share agreement with Norwegian (NWG) regional airline Widerøe, strengthening (FIN)s’ existing partnership.
Announcing the changes on May 15, (FIN) said its AY code will be added to a series of Widerøe-operated routes from Oslo, Bergen and Tromsø in Norway.
The routes comprise:
* Oslo to Florø, Ørsta-Volda, Svolvær, Leknes and Stokmarknes;
* Bergen to Tromsø, Bodø, Kristiansund, Molde, Florø and to Billund in Denmark;
* Tromsø to Kirkenes and to Stokmarknes.
(FIN) (CCO) Juha Järvinen said the code share will add greater network connectivity to the Norwegian regions. “The new code shares serve both our Asian and Finnish customers traveling to Norway, and our Norwegian customers who will now have more and smoother connections to our network of 19 Asian destinations, 7 destinations in North America, and >100 destinations in Europe,” he said.
Widerøe already operates flights from Helsinki to Bergen and Tromsø on Finnair (FIN)’s behalf.
News Item A-2: Finnair (FIN) (CEO) Pekka Vauramo is to step down by November 2018 to take up a position as (CEO) with Metso Corporation, a Finnish industrial machinery company that specializes in mining and related industries.
“We have been through a lot at Finnair (FIN) over the past 5 years,” Vauramo said. “I have now been offered to take on 1 more challenge, and this has not been an easy decision for me to make.”
Vauramo said (FIN)’s strategic focus on transformation, growth, the customer experience and personnel has been “the right choice. I am committed to leading (FIN), together with my team, for the rest of my time at (FIN). Our company’s focus needs to be on the future development of the company every day,” he said.
(FIN)’s Chairman, Jouko Karvinen said the board is sad to see Vauramo go. “We also respect his personal decision to take on another challenge,” he said.
Karvinen thanked Vauramo for his 5 years of leadership, adding: “During the past few years, (FIN)’s people have achieved a remarkable transformation and have turned (FIN) into a growth company. We all at (FIN), including the board, will now continue this extensive journey of transformation.”
Vauramo will leave (FIN) by no later than November 2018. “The search for Vauramo’s successor starts today,” (FIN) said, announcing the resignation on May 21.
October 2018: News Item A-1: The UK’s Competition and Markets Authority (CMA) has begun an investigation into the Atlantic Joint Business Agreement, a transatlantic partnership between American Airlines (AAL), British Airways (BAB), Spain’s Iberia (IBE) and Finland flag carrier Finnair (FIN). “This case is at an early stage and no assumption should be made that the Atlantic Joint Business Agreement infringes competition law,” the (CMA) said October 11.
December 2018: Finnair (FIN) will add a new daily frequency year-round on both routes from Helsinki to Moscow Sheremetyevo and to Pulkovo Airport in Saint Petersburg, Russia, from March 31, 2019. The services will use an Embraer E190.
Click below for photos:
FIN-A319 - 2015-08.jpg
FIN-A321 - SHARKLETS - 2013-09
FIN-A330 MARIMEKK0 - 2014-10
FIN-A330-300 - 2012-02
FIN-A340-313X - REPAINT 2012-11
FIN-A350 XWB - 2015-07.jpg
FIN-A350 XWB - 2015-09.jpg
FIN-A350-900 - 2014-08
FIN-A350-900 - 2015-04.jpg
FIN-A350-900 - 2017-10.jpg
FIN-A350-941 OH-LWB 2018-11.jpg
FIN-E190-100LR - 0127, OH-LKK - 2017-05.jpg
0 747-100F, (PAO) 1 YEAR WET-LEASED. RETURNED.
0 757-200F, (EPT) WET-LEASED 2003-09. RETURNED.
0 757-2Q8 (PW2040) (772-28172, /97 OH-LBO; 775-28167, /97 OH-LBR; 792-27623, /98 OH-LBS (SEE PHOTO); 801-28170, /98 OH-LBT; 857-29377, /99 OH-LBU; 1010-29382, /02 OH-LBX; 1006-30046, /02 OH-LBV), (ILF) 8 YEAR LEASED, MAINTAINED BY (DLH), 1 (ETOPS) EQUIPPED. 27623 WET-LEASED TO (SCZ) 2001-04. 29382 WET-LEASED TO (SCZ) 2004-05. (ILF) LEASES EXPIRED IN 2010. 28167; 27623; 28170; WET-LEASED TO (ARL) BY (HVL) IN 2014-04. WITH WINGLETS. 227Y.
0 757-300 (RB211-535E4B), 2 (CDF) WET-LEASED UNTIL END OF (2Q) 2002.
0 DC-9-41 (2 SOLD TO (CMI), 3 SOLD.
0 DC-9-51 (JT8D-17A) (805-47694; 806-47695) SOLD TO (TKC) 2003-02, TO RETIRE ALL BY 2003-10, 2 SOLD TO KELLSTROM IND, LEASED TO (LAV), 48135 SOLD TO (TKC) 2003-03. FOR SALE. (890-47772, UR-CBV; 891-47773, UR-CBY; SOLD TO (KHO) 2003-07), 48134 SOLD TO (KHO) 2003-09. 47736 SOLD TO (KHO) 2003-11. 47696 SOLD TO (KHO) 2004-02. 122Y.
0 MD-82 (JT8D-219) (1978-53245, /92 OH-LMH; 1767-49905, /90 OH-LMW; 1786-49906, OH-LMX; 1901-53244, /91 OH-LMY; 1918-53246, /91 OH-LMZ; 1765-49900, OH-LPA), 49905 RETURNED, LEASED TO (LAV) 2005-06. LAST 2 RETURNED. 141Y.
0 MD-83 (JT8D-219) (1561-49708, /89 OH-LPG; 1547-49710, /93 OH-LPD), 49152; 49151 RETURNED 2001-04. 49904 RETURNED. 49152 RETURNED 2002-05, LEASED TO (NOQ). TO (WJE) 2006-05. 141Y.
0 MD-83 (JT8D-219) (1357-49401, /87 OH-LPE, 1503-49625, /88 OH-LMG) (49721, OH-LMU), 49623 WET-LST (NOQ) 2004-06. 49625; SOLD TO (WJE) 2006-06. ALL RETURNED 2006-09. 141Y.
0 MD-83 (JT8D-219) (2047-49966, /93 OH-LPB; 2044-49965, /93 OH-LPC), 2 RETURNED 2006-09. 156Y.
0 MD-87 (49403; 49404; 49405; SOLD TO CRAYCROFT, LEASED TO (SPP), 2000-05).
0 DC-10-30 (CF6-50C2) (345-48265) LEASED TO (ALB), 3 SOLD.
0 DC-10-30F (CF6-50C2) (WLD) WET-LEASED 2004-05. RETURNED.
0 MD-11ER (CF6-80C2D1F) (455-48449, /90 OH-LGA; 479-48450, /91 OH-LGB; 529-48512, /93 OH-LGC; 564-48513, /94 OH-LGD; 624-48780, /98 OH-LGE, 2003-02; 600-48766, /96 OH-LGF; 608-48753, OH-LGG, 2005-12, EX-(VAR)). (BBB)/(TBC) LEASED. 2 OWNED SOLD TO (ARO) 2007-05. 48449; TO (BBB), LEASED TO (WLD) 2009-07. LAST MD-11 FLIGHT IN 2010-02. MAY CONSIDER CARGO USE OPTIONS. 48513; TO SINGAPORE FOR CARGO CONVERSION AS (N513AY). 42C, 245Y.
2 MD-11F (48512, OH-LGC 2010-04 - - SEE PHOTO - "FIN-MD-11F-2010-10;" 564-48513, OH-LGD, 2011-01), EX-(N512SU & N513AY). FINNAIR CARGO OPERATIONS. FREIGHTER.
0 A300B4-203 (CF6-50C2) (299, /84 OH-LAA; 302, /84 OH-LAB), LEASED TO (SCZ), 317Y.
3/6 ORDERS A319/A320/A321 (CFM56), (ILF) 10 YEAR LEASED, (5 A319, 3 A320, 4 A321):
9 A319-112 (CFM56-5B6/2P) (1073, /99 OH-LVA; 1107, /99 OH-LVB; 1309, /00 OH-LVC; 1352*, /00 OH-LVD; 1791, /02 OH-LVE "SILVER BIRD" - - SEE PHOTO - - "FIN-A319-2008-09;" 1808, /02 OH-LVF; 1916, /03 OH-LVG; 2124, /04 OH-LVK; 2266, OH-LVL, 2004-09) (ILF) 10 YEAR LEASED. *1352 IN ONEWORLD (ONW) ALLIANCE LIVERY 2017-10. 126Y.
3 A319-112 (CFM56-5B6/2P) (1184, /00 OH-LVH; 1364, /00 OH-LVI; 1916, OH-LVG), EX-(SAB), 2002-10 & 2017-02. 126Y.
12 A320-214 (CFM56-5B4/2P) (1405, /01 OH-LXA; 1470, /01 OH-LXB; 1544, /01 OH-LXC; 1588, /01 OH-LXD; 1678, /01 OH-LXE; 1712, /02 OH-LXF; 1735, /02 OH-LXG; 1913, /02 OH-LXH; 1989, /03 OH-LXI; 2065, /03 OH-LXK; 2146, /03 OH-LXL; 2154, /04 OH-LXM. 150Y.
5 A321-200 (CFM56-5B3/2P). 181Y.
2 A321-200 (CDB) AVIATION LEASE FINANCE 8 YEAR LEASED.
6 A321-211 (CFM56-5B3/2P) (941, /99 OH-LZA; 961, /99 OH-LZB; 1185, /00 OH-LZC; 1241, /00 OH-LZD; 1978, /03 OH-LZE; 2208, /04 OH-LZF), (ILF) LEASED. 181Y.
6 A321-231 (V2533-A5) (5803; 5961, OH-LZK, 2014-02; 7552, OH-LZM, 2017-02; 7661, OH-LZP, 2017-05), WITH SHARKLET WINGLETS. (BOC) AVIATION (SIL) LEASED. 200Y.
2 A330-300 (CF6-80E1), (GEF) LEASED.
0 A330-300 (CF6-80E1) (IBE) WET-LEASED UNTIL 2017-04, 36C (FULL-FLAT), 242Y.
8 A330-302E (CF6-80E1) (994, OH-LTM, 2009-03; 1007, OH-LTN 2009-04 - - SEE PHOTO - - "FIN-A330-302E-2009-04;" 1013, OH-LTO 2009-05; 1023, OH-LTP, 2009-06; 1067, OH-LTR, 2009-12; 1078, OH-LTS, 2010-02; 1088, OH-LTT, 2010-03; 1103), 42C, 229Y.
2 A340-300 (ILF) LEASED:
1 A340-311 (CFM56-5C2) (058, /94 OH-LQA "DRAGON LADY"), MAINTAINED BY (AFA). EX-(VAA), BOUGHT FROM LAURA LEASING SAFRAN 2006-06. 40F, 28C, 187Y.
1 A340-313E (CFM56-5C4) (174, /97 OH-LQG - - SEE PHOTO - - "FIN-A340-313E-2011-01"), EX-(F-GNIG), EX-(AFA) 2011-01. 36C, 236Y.
2 A340-313E (CFM56-5C4/P) (835, OH-LQB, 2007-06; 844, OH-LQC, 2007-06; 921, OH-LQD, 2008-05 - - SEE ATTACHED - - "FIN-A340-313X - REPAINT 2012-11"), 844 STORED AS (F-WXAG) 2017-07. 269 PAX.
11 +8/8 ORDERS A350 XWB-900 (TRENT 1700), 2015-10. 297 PAX, 46C (1+2+1), 43PY (35 INCH), 208Y (3+3+3) (31 INCH).
3 ATR72-201 (PW124B) (126, /89 OH-KRA; 140, /89 OH-KRB; 145, /89 OH-KRC; 162, /90 OH-KRD; 174, /90 OH-KRE; 324, /92 OH-KRF), 162; 174; TRANSFERRED TO AERO 2004-11. 147, TO AIR ATLANTIQUE 2005-10. 66Y.
2 ATR72-201 (PW124B) (212, /91 OH-KRH; 251, /91 OH-KRK; 332, /92 OH-KRL), EX-(FSH). 332 TO (TYU) 2008 (ACCDT: CRASHED & DESTROYED 2012-04). 66Y.
0 SAAB 340AQC (CT7-5A2), 2 SOLD TO FLYING ENTERPRISE, SWEDEN.
0 SAAB 340B (CT7-9B) (167, /89 OH-FAF), 1 RETURNED. 167 SOLD TO FINNCOMM 2003-11. 34Y.
12 +4 OPTIONS EMBRAER E170 (00050, OH-LEO, 2006-11; 00093, OH-LEE, 2005-09; 00106, OH-LEF, 2005-11; 00107, OH-LEG, 2005-11; 00112, OH-LEH, 2005-12; 00120, OH-LEI, 2006-02; 00127, OH-LEK, 2006-04; 00139, OH-LEL, 2006-08; 00141, OH-LEM, 2006-08; 00146, OH-LEN, 2006-09; 00150, OH-LEO, 2006-12). 2 AIRPLANES 4 YEAR LEASED TO (KEN) 2010-06. 76Y.
13 EMBRAER E190-LR (CF34-10E5) (059, /06 OH-LKE - SEE PHOTO; 066, /07 OH-LKF; 079, /07 OH-LKG; 086, /07 OH-LKH; 117, /07 OH-LKI; 127, /07 OH-LKK - SEE PHOTO; 153, /08 OH-LKL; 160, /08 OH-LKM; 252, /09 OH-LKN; 267, /09 OH-LKO; 416, /11 OH-LKP; 436, /11 OH-LKR), 28CY, 72Y.
3 EMBRAER E190-LR (CF34-10E5), GERMAN OPERATING AIRCRAFT LEASING (GOAL) LEASED. 28CY, 72Y.
1 EMBRAER E190-E2 2017-10, OPERATED BY REGIONAL CARRIER WIDEROE.
Click below for photos:
FIN-11-MIKA VEHVILAINEN - 2012-03
FIN-11-MIKA VEHVILAINEN - 2012-09
FIN-2-PEKKA VAURAMO - 2013-12
FIN-2-Pekka Vauramo - 2017-09.jpg,
JOUKO KARVINEN, CHAIRMAN.
Jouko Karvinen said the board is sad to see Finnair (FIN) (CEO) Jouko Vauramo go in November 2018. “We also respect his personal decision to take on another challenge,” he said.
Jouko thanked Vauramo for his 5 years of leadership, adding: “During the past few years, (FIN)’s people have achieved a remarkable transformation and have turned (FIN) into a growth company. We all at (FIN), including the board, will now continue this extensive journey of transformation.”
PEKKA VAURAMO, CHIEF EXECUTIVE OFFICER (CEO) (2017-04), TO RESIGN (2018-11).
Pekka Vauramo is to step down by November 2018 to take up a position as (CEO) with Metso Corporation, a Finnish industrial machinery company that specializes in mining and related industries.
“We have been through a lot at Finnair (FIN) over the past 5 years,” Vauramo said. “I have now been offered to take on 1 more challenge, and this has not been an easy decision for me to make.”
Vauramo said (FIN)’s strategic focus on transformation, growth, the customer experience and personnel has been “the right choice. I am committed to leading (FIN), together with my team, for the rest of my time at (FIN). Our company’s focus needs to be on the future development of the company every day,” he said.
Pekka was new to aviation when he joined Finnair (FIN) from the mining industry 4 years ago. He previously served with Finnish cargo and load handling company Cargotec and with Sandvik, the Swedish mining and construction company, in various senior management positions. Since then, he has completed the 2nd half of a €200 million/$217 million restructuring, and become the Airbus A350 European launch operator. Now Finnair (FIN) is planning to double its Asian capacity by 2018, drawing on Helsinki’s 30- to 35-minute minimum connecting times.
JAAKKO SCHILDT, DEPUTY (CEO) & CHIEF OPERATIONS OFFICER (COO).
PERTTI VARE, EXECUTIVE VP QUALITY REPORTS TO PRESIDENT (1998-05).
ANTTI KUUSWNMAKI, HEAD OF CARGO.
ANTERO LAHTINEN, SENIOR VP & MANAGING DIRECTOR CARGO.
Born in 1949, Senior VP Cargo & Managing Director, Finnair Cargo Oy, served with Finnair (FIN) since 1973.
JARMO VILENIUS, SENIOR VP FACILITIES MANAGEMENT (HELZMAY) (2006-01).
Born in 1950, M Sc (Eng), Senior VP Facilities Management, served with Finnair (FIN) since 1973.
KIMMO SOINI, SENIOR VP TECHNICAL SERVICES (2006-01)
Born in 1958, M Sc (Eng), Senior VP Technical Services, served with Finnair (FIN) since 1985. (Tel: +358 9 818 6435).
VEIKKO SIEVANEN, SENIOR VP FLIGHT OPERATIONS (2007-10).
TERO VAURASTE, SENIOR VP GROUND HANDLING.
Born in 1967, Lieutenant Senior Grade retired, M Sc, Senior VP Ground Handling, Managing Director, Northport Oy, served with Finnair (FIN) since 2001.
EERO AHOLA, SENIOR VP CORPORATE STRATEGIC PLANNING & E-BUSINESS DEVELOPMENT.
JUHA JARVINEN, SENIOR VP COMMERCIAL DIVISION, & CHIEF COMMERCIAL OFFICER (CCO).
30-Second anna.aero's Chief Analyst Nick Preston Interview with Juha Järvinen, (CCO) at Finnair (FIN) October 16, 2017:
The past few years have been eventful ones for Finnair (FIN). (OAG) schedule data show that (FIN) the Finnish flag carrier has grown its capacity over each of the past 5 years. It was also the 1st European airline to take delivery of the A350, Airbus’ latest generation, long-haul, wide body aircraft.
(FIN) (CCO) Juha Järvinen (JJ) took time out from his busy schedule to sit down with anna.aero’ (aa)'s Chief Analyst Nick Preston to explain the network strategies driving (FIN)’s growth and the potential impact the introduction of the A350 could have on future route developments.
aa: Since 2012 (FIN) has increased capacity by >3rd. Which network or route development strategies have contributed most to this growth?
JJ: “We have been steadily growing capacity year-on-year. 2017 and 2018 will see this growth peak, with ASKs expected to increase by just >9% this year and closer to 15% in 2018. These growth rates are very much linked to aircraft deliveries, including the introduction and expansion of the A350 fleet. The main driver of our capacity growth has been expansion in Asia. Roughly 50% of our ASKs are generated on Asian routes.”
aa: How important is connecting traffic to (FIN)’s business model? What percentage of (FIN) passengers currently connect via Helsinki and what are the largest connecting markets?
JJ: “Around 50% of our total passengers today are connecting via Helsinki. We see that figure growing. Our current share of the home market for international traffic is 65% and we don’t see much potential to grow that figure. For future growth we are looking to other markets. We believe there is potential to increase our capacity share in some of our biggest focus markets including Germany, the UK and Russia. We are also focusing extensively on NE Asian opportunities, including Japan, S Korea, China and Hong Kong.”
aa: Outside of Europe, (FIN)’s largest destination markets are Japan and China. Why is Asia such an important destination market for (FIN)?
JJ: “Helsinki benefits from its geographic position between W Europe and NE Asia, being only 7 hours flying time from W China. This allows efficient aircraft utilization, including the ability to operate return flights to Helsinki within 24 hours. Helsinki’s location means (FIN) can serve Asian destinations that might not be economically viable from other European hubs in London, Frankfurt and Paris. We have increased our capacity to Japan, including more frequencies to Tokyo Narita. (FIN) is part of a joint venture [JV] with Japan Airlines [JAL], British Airways [BA] and Iberia (IBE) covering flights between Europe and Japan. We are the largest European airline serving Japan in terms of weekly frequencies, with 28 from Helsinki and a further 7 operated by our (JV) partner (JAL). China is the fastest growing outbound market in the world. We already serve Shanghai, Beijing, Chongqing, Guangzhou and Xi’an and will launch a new service to Nanjing next May.”
aa: Does (FIN) plan to increase its connections to any other regions?
JJ: “We are looking at conservative growth in N America by increasing USA traffic as part of a transatlantic (JV) with American Airlines (AAL), (BAB), (IBE) and LEVEL. What makes this (JV) strong is that you can fly non-stop from Helsinki or via (LHR) with (BAB) or (AAL). This allows us to provide seasonal capacity with direct services in peak season, and then by feeding traffic via (LHR) during off-peak. We recently launched a direct service from Helsinki to San Francisco which is already one of our top performing routes. We operate direct year-round services from Helsinki to New York (JFK), while San Francisco and Chicago are summer seasonal routes, and Miami operates direct during the winter season. We still see some opportunities in N America but these are planned in association with our (JV) partners. (FIN)’s 1st daily sector from Helsinki to (LHR) is operated by an A350, to feed additional traffic on to our (JV) partners’ N American flight bank. The reverse (LHR) to Helsinki sector provides feed from our (JV) partners for our overnight Asian flight bank.”
aa: (FIN) was the 1st European airline to introduce the A350. Has the introduction of this aircraft and its superior operating performance directly led to the launch, or planned launch, of any new routes?
JJ: “We placed a firm order for 19 A350-900s, of which 11 have been delivered. The A350s have replaced A340s in our long-haul fleet. We have decided to keep 8 A330-300s, so when the final A350 has been delivered, our long-haul fleet will increase to 27 aircraft. The introduction of the A350 has led to route performance improvements on some of our longest sectors, including Helsinki to Singapore. The A350’s greater belly cargo capacity is also an advantage, especially on high-density routes like Hong Kong and Tokyo Narita. The A350’s fuel efficient performance makes longer-haul sectors more economically viable. We are using the aircraft to open 2 new long-haul destinations from Helsinki this winter. including Puerto Vallarta on the Mexican Pacific coast, a sector >12 hours flying time, and Havana in Cuba.”
aa: On October 11, it was announced that (FIN) was taking 100% ownership of Nordic Regional Airlines (Norra) on an interim basis. Does it have any future partners lined up to take a share in Norra?
JJ: “We see this as temporary solution. We believe the best thing for Norra and the regional platform would be to have an owner which is specialized in regional operations. (FIN) will be contacting potential parties in Europe, but we believe there are players that will be interested. (FIN) will want to agree a multi-year capacity agreement with the new owner, since we need this regional traffic on both domestic and regional services.”
aa: In 2017, Norra will provide >25% of (FIN)’s capacity. Could the flights performed by Norra increase over the next few years?
JJ: “Norra operations play a crucial part in our network. Currently Norra ATR turboprops serve domestic routes and services around the Baltic sea, while the E190s are a big part of our Central European flying program and operate as far as Dublin. Regional flying is likely to grow as overall capacity increases, but the proportion of our total seats provided by Norra will probably remain at a similar level to today.”
aa: Is (FIN) concerned about the growth of low-cost long-haul (LCLH) services?
JJ: “Of course, we actively follow what’s happening around us. We take Norwegian (NWG) seriously since they are a major competitor. (NWG) has grown transatlantic traffic, but when it comes to Asian services, there are certain restrictions that make it more difficult for (LCLH)s to grow. 1 major element of this is traffic rights restrictions, which remain in place in many Asian markets. This doesn’t mean (LCLH)s won’t enter these markets in the longer-term, but in the short-term it makes this process more difficult.”
aa: What are (FIN)’s aims for the future?
JJ: “For the 1st 9 months of 2017 our ASKs are up, passenger volumes are up and yield is up, so we are very happy with the performance this year. 2017 and 2018 will see our biggest growth peaks, but over a 10-year period our aim is for average growth of 3 to 4% per year in ASKs, which we believe is more sustainable on a longer-term basis.”
aa: Recent press reports suggest the Finns consume more coffee per person than any other country. Do you prefer coffee or tea?
JJ: “Coffee, but I like tea too. I prefer strong coffee, preferably a double espresso. Coffee is probably popular in Finland due to the long harsh winters!”
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