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- Finnair Plc
Tietotie 11 A (Helsinki Vantaa Airport)
- Main hub
- Helsinki-Vantaa Airport
- Business model
- Full Service Carrier
- Domestic | International
- Airline Group
- Part of Finnair Group
- Joined Alliance
- Association Membership
- Codeshare Partners
CSA Czech Airlines
The national carrier of Finland, Finnair is based in Helsinki and is majority-owned by the Finnish government. The airline and its subsidiaries dominate the domestic and international air travel market in Finland. Finnair’s network includes regional services within Finland and Scandinavia as well as flights to Europe, Asia, United States and Canada. Finnair is a member of the oneworld alliance.
Location of Finnair main hub (Helsinki-Vantaa Airport)
Finnair share price
1,344 total articles
107 total articles
Air Canada during the last couple of years has worked diligently to repair its balance sheet, improve its leverage and reduce costs; as a result it is now beginning to enjoy some of the fruits of its labour by meeting its return targets and sustaining liquidity well above its minimum threshold.
The Canadian flag carrier has also undertaken a network revamp that includes the creation of its low cost subsidiary rouge and a push into long-haul international markets, leveraging its position as Canada’s leading global airline.
But Air Canada faces challenges as it works to sustain profitability from its familiar foe WestJet, as well as potential new entrants eager to execute the ULCC model within Canada. The airline will no doubt have focussed on these threats, and be aware there is still much to prove as its efforts to transform its business continue.
This CAPA analysis of Air Canada's strengths, weaknesses, opportunities and threats continues a series on global airlines.
The very end of 2014 was one of the most important parts of the year for Gulf airlines as they received new aircraft: the world's first A350 for Qatar Airways, which took its first A380 a few months prior, while Etihad received its first A380 and 787-9. These are more than just new toys: they bring improvements both operationally and customer-facing. The Gulf has been building up high-end premium products and the new aircraft cement the region's position of offering some of the best, if not the best, products.
Gulf airlines once sold on the basis of price and often convenience. As they expand their networks and build frequencies they are now moving into higher-end premium cabins, strengthening loyalty programmes, constructing new terminals and airports and have hubs with an increasing number of local activities for a stopover. Meanwhile in the old world airports are becoming more constrained, politicians remain ineffective and uninterested and legacy airlines are slow to invest while facing unpredictability from staff strikes. This brings a change to Gulf carriers that is actively welcomed by passengers; but protectionist rhetoric and use of regulatory constraints is increasing.
At its Capital Markets Day in late Nov-2014, Flybe asserted that it "does not compete with low cost carriers, flag carriers or mid-haul leisure airlines". Moreover, our analysis shows that it rarely competes with other regional airlines. In fact, Flybe faces no competition of any kind on 78% of its city pair routes in its Dec-2014 schedule. Moreover, it is Europe's largest independent regional airline and Europe is the world's largest regional market.
In spite of these advantages and what looks to be a relatively efficient cost base by comparison with other European regional airlines (according to our analysis), Flybe has yet to re-establish sustainable levels of profitability. Much has been achieved since the change of senior management in 2013, but the regional airline's fundamental CASK disadvantage will remain a challenge even as it increases its focus on turboprops rather than regional jets.
Europe's airlines: 1H2014 results season shows improving trend, but cost reduction is the key driver
Europe's airlines appear to be following a course to improved profitability, based on the 1H2014 results of the largest publicly quoted airline groups. Profits remain slender in most cases, but margins are improving in aggregate. Individually, financial performance varied widely, with LCCs both leading (Ryanair) and lagging (Norwegian) the operating profit margin rankings in 1H2014.
The European market offers volume growth, but is characterised by price pressure, with RASK falling for the majority of the larger airline groups and this points to the need for additional caution in capacity growth. The LCCs collectively enjoyed higher growth than the FSCs in 1H2014 and also achieved a more stable RASK performance (although not in all cases).
Profit improvement is largely being achieved through cost savings and CASK reduction. Although fuel prices are high on a longer term historic perspective, they are enjoying a period of relative stability and this has helped the cost picture. Although Europe's airline sector remains only thinly profitable, these 1H results hold out the prospect of better full year results in 2014 versus 2013.
Malaysia Airlines (MAS) plans to increase focus on regional operations as it starts to implement capacity and job cuts as part of a new recovery plan. Cuts to the long-haul network are expected as the group’s new strategy aims to leverage partnership and its membership in oneworld.
The changes could create a void In Malaysia’s long-haul market and persuade AirAsia X to reconsider services to Europe. But it could also lead to an opening for oneworld partners such as British Airways and Finnair to enter the market, possibly as part of a joint venture with MAS.
The new strategy, which also includes a focus on premium services and improving yields, is not actually new. MAS tried to implement a similar strategy as it entered oneworld in early 2013. Then it became distracted over the last year and started pursuing ambitious growth at the expense of yields. A second attempt at the same strategy has a better chance of succeeding as this time it comes with the job cuts that MAS has needed for years. But there will still be challenges.
Finnair improved its load factor in 2Q2014 after a dip in 1Q and made further progress with its cost reduction programme. It has reached agreement with many employee groups over further cost efficiencies, but did not reach full agreement with flight attendants. Management's consequent decision to begin implementing plans to outsource part of its cabin services activities displays a commendable resolve to achieve the necessary savings.
Nevertheless, in the words of CEO Pekka Vauramo, "the second quarter of 2014 was difficult".
Weak market conditions meant that unit revenue declined more rapidly than unit costs and the airline fell into loss in 2Q2014. It now expects a significant operational loss for FY2014, which would mean a second year of falling results.