Finnair to proceed with outsourcing of cabin services on as many as 20 routes

Finnair announced (23-Jun-2014) plans to proceed with the outsourcing of cabin crew activities on "approximately 20 long-haul and short-haul routes in the next two years", with the carrier aiming to outsource between one and three routes by the end of 2014. Finnair will proceed with the establishment of a subsidiary which will produce cabin crew services for the carrier. Finnair met again with representatives of the Finnish Cabin Crew Union (SLSY) to find a cost reduction solution which would avoid the need for outsourcing. SLSY's offer of EUR11.7 million in predominantly temporary cost savings remained "too far from the savings that Finnair requires." Finnair COO Ville Iho said: "We cannot continue with our current cost structure, which is why we need to make instant, permanent changes to it. We proposed a solution that would see EUR 12 million of the cost reductions implemented immediately and the remaining EUR 6 million over a longer period of time. Even this compromise did not lead to an agreement." Mr Iho added: "Partnership negotiations concerning outsourcing are proceeding well. We expect to conclude our first agreements in the third quarter and outsource our first routes in the fourth quarter. There are potential partners in Finland, elsewhere in Europe, as well as Asia. Each instance of route outsourcing requires careful negotiation and planning to ensure the best possible service quality and compatibility with the rest of our operations. For this reason, we will be proceeding with outsourcing in stages." [more - original PR]