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Finnair Believes in Long-Term Growth Strategy

31-Mar-2006

Finnair is resolutely formulating for its long-haul traffic a strategy focused on the growing Asian market. This strategy will be supported by route network development and fleet modernisation in the coming years. Finnair outlined its Asia strategy in a Capital Markets Day held in Shanghai today, 30 March 2006.


"By summer 2008 we will have a fleet of 11 long-haul aircraft. As matters stand, the acquisition of our next four aircraft will be entered in our balance sheet. Our good financial position and cash flow provide a good base for implementing the investment programme. As part of our possible financial options we have recently secured our position by negotiating on more favourable terms a previously agreed 200 million euro credit facility," said Chief Financial Officer Lasse Heinonen.

Business class travel in European traffic has declined in all airlines - in the case of Finnair's scheduled traffic from 25 per cent to just over six per cent in five years. In long-haul traffic, on the other hand, business class demand is growing strongly.

"In China, demand for Finnair's refurbished business class is clearly growing faster than demand overall, which is also improving the average yield of flight tickets," said Mikko Rautio, General Manager of Finnair China.

"Our strategy for the future is strong growth. Our more economical fleet and strong growth in the Asian market are in the long term the factors that will support our long-haul strategy. In the short term, introducing the new fleet and rising fuel costs will weigh heavily on our result, and therefore the result for the first quarter will, as expected, be weak," added CFO Heinonen.

The result for the full year, however, is expected to be clearly in profit.

Finnair is a CAPA Member. For more information on the Centre for Asia Pacific Aviation's membership service, please click the icon below.
 

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