Finnair appointed (04-Apr-2013) Cargotec’s MacGregor Business CCO Pekka Vauramo as the airline’s new CEO effective 01-Jun-2013. Mr Vauramo replaces Mika Vehviläinen who left Finnair in Feb-2013 to join Cargotec as its CEO. Finnair board chairman Klaus Heinemann said, "The board is convinced that Pekka Vauramo and his Finnair leadership team have the competencies to drive through the restructuring and cost savings program Finnair started in 2011, and execute Finnair's ambitious Asian and Nordic expansion plans. Pekka Vauramo has a proven track record of leading businesses in the right direction under difficult conditions, and we are confident that Finnair will be able to reach its strategic targets with Pekka at the helm of the company." [more - original PR] [more - original PR Finnish]
Finnair appoints Cargotec's MacGregor Business CCO as new CEO
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Finnair's 2016 Capital Markets Day on 25-May-2016 was an opportunity to mark the progress made in CEO Pekka Vauramo's first three years at the airline. Since his arrival on 1-Jun-2013 Finnair has completed its entry into the oneworld trans-Atlantic JV and the JAL-BA JV; implemented cost reduction initiatives, including the renegotiation of labour agreements; and taken delivery of its first Airbus A350 aircraft. After falling into loss in 2014, it returned to profit in 2015 and its 1Q2016 results show further progress, although it remains short of Mr Vauramo's medium-term margin targets.
Finnair is now reinvigorating and accelerating its long haul growth plans, based on its niche in Europe-Asia connecting traffic. A target to double its 2010 Asia ASKs by 2020 has been brought forward to 2018, and this can be achieved with minimal additional investment. Through a refocused commercial strategy, Finnair hopes to stay ahead of market RASK performance in a weak unit revenue environment. Through growth, fleet upgrades and improved labour productivity, Finnair aims to make significant CASK reductions. Finnair management certainly appears to be more confident about the future than at any other time in the past three years and more.
Asia-Europe slowest-growing major market but dynamic: AF-KLM and SIA shrink as oneworld, China grow
Asia-Europe, which is one of IATA's big four international markets, has become the slowest-growing. The market underwent RPK expansion of only 1.5% in Jul-2016, the latest data available. Uncertainty in Europe and terrorism fears mean that some Asian travellers choose Australia and North America or, as IATA has flagged – travel within Asia, which has expanded by nearly double digits.
Although market expansion was slow in the first part of 2016, so too was capacity. Yet this changed in Jul-2016 as capacity increased more quickly, perhaps as airlines expected a stronger summer. Despite slow passenger growth, dynamics are highly varied – except for yield declines. The combined RPK growth of IAG (7.2%) Cathay Pacific (3.7%) and Finnair (8.7%) was not enough to offset the contraction of the largest airline in the market, AF-KLM (7.9%).
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