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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
Finnair is the national carrier of Finland and majority-owned by the Finnish government. Operating from its hub at Helsinki, the carrier and its subsidiaries handle the majority of domestic and international air travel in Finland. Finnair’s network includes regional services within Finland and Scandinavia as well as international services 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
1,560 total articles
119 total articles
If a nation is not a country until it has a local beer and airline, then an extension may be that the carrier needs to fly to London. That is based on the constant theme for Asian carriers – such as Garuda, Philippine Airlines and Vietnam Airlines – opening routes to London and maintaining them despite financial pressures. But this does not apply to China. Chinese airlines have as many seats to Italy as to the UK; more Chinese tourists fly to New Zealand than to the UK. All seven of China's long haul carriers intend to fly to Australia but only four will fly to the UK.
This backwater issue is a problem for UK tourism - and for British Airways. Concurrent with President Xi's visit to the UK, visa restrictions will be loosened for Chinese nationals. But this is not enough; British tourism is hurt by the UK not being a member of the Schengen zone, where Chinese visitors can apply for one visa and visit multiple countries on one trip. The resulting limited Chinese interest in the UK hurts British Airways, which has the smallest presence of major European carriers in China. Finnair for one is bigger, furthering the case for deeper IAG-Finnair ties, or even a takeover. BA has a strong if quiet strategy to grow its China business, but still needs more support.
Finnair’s A350 delivery brings more growth to Helsinki-Vantaa Airport. Now to attract other airlines
Finnair on 07-Oct-2015 took delivery of its first A350 XWB, becoming the third operator overall – after Qatar Airways and Vietnam Airlines – and the first in Europe. The aircraft brings needed benefits to the airline: lower operating costs and an improved passenger product. The A350s also mark the start of more growth for Finnair’s home base, Helsinki Airport, which is expanding its terminal to support Finnair.
After replacing A340s, the A350s will permit growth, with Helsinki Airport telling CAPA it expects each aircraft to open one or two new destinations a year. Finnair’s strategy is to link Europe with Asia, focusing on Northeast Asia. Helsinki Airport has many of the main Asian markets covered, leaving open the opportunity for increased frequency – slots permitting – or exploring secondary cities. Finnair has announced Fukuoka and Guangzhou for new destinations in 2016.
Helsinki would like more North American routes, which Norwegian could consider. The LCC is testing longer flights from Helsinki with a Dubai service. Gulf carriers are absent from Helsinki – as are other long-haul operators excluding Japan Airlines. Helsinki Airport's challenge now will be to benefit from Finnair and attract new airlines.
Finnair narrowed its operational loss for 2Q2015 and for 1H2015. In spite of broadly flat capacity (ASK growth of just 0.4%), passenger revenue increased by more than 4%, helped to some extent by currency movements. However, total revenue fell slightly and the improved operational result was achieved through a bigger reduction in costs, thanks to lower fuel prices.
Finnair noted that there were signs of recovery in the demand for consumer and business travel in all traffic areas. Its 1H2015 report shows that it has started to improve its results and it now targets a break even or slightly positive operational result for FY2015 after a EUR37 million loss last year.
Moreover, with average 2Q2015 headcount down by more than 500 (10%) year on year, Finnair's restructuring of recent times paves the way for productivity gains. Its profitability should also benefit from the introduction this autumn into its long-haul fleet of Airbus A350-900 aircraft to replace ageing A340 equipment (which currently have an average age of 12.7 years according to the CAPA Fleet Database).
LOT Polish Airlines, completing a restructuring, is planning to double in size by 2020 and launch additional service to North America and Asia, where new routes to Bangkok, Seoul Incheon and Tokyo Narita have been announced. Two more long-haul routes will be announced in autumn 2015 and by 2020 LOT plans to have 10-12 long-haul routes as it becomes the hub for "the new Europe" across Eastern and Central Europe, where there is growth but no clear domination yet by Aeroflot, Air France-KLM, IAG or Lufthansa. Yet LOT's "new" world is actually an old, restrictive world where fellow Star Alliance carriers can veto even internal partnerships, which will hurt LOT's long-haul performance. LOT's position is reflective of other carriers feeling constrained from larger members across all of aviation's global alliances.
LOT prefers to remain in Star but provided it gains greater participation. It hosted the bi-annual board meeting in late Jun-2015 in hopes of gaining leverage. LOT needs a few years to prove its new strategy to potential strategic and equity partners but an alliance decision may be needed in the short-term: a change in alliance rules means Star carriers can leave by 31-Dec-2015 without paying exit fees, which can be very substantial.
SAS narrowed its underlying loss in 2QFY2015, after stripping out the gain on the sale of two slot pairs at London Heathrow. The Scandinavian airline is enjoying a more benign capacity environment this year, particularly in short and medium-haul markets, and is cutting its own capacity. This allowed it to grow its unit revenue at a faster pace than its unit cost, prompting a modestly more positive outlook for FY2015.
Although SAS has invested in product improvements and is growing its revenues from members of its Eurobonus scheme, low cost competition in Europe is making short-haul markets increasingly price-based. FY2015's positive unit revenue conditions may not last, especially within Europe.
Looking into 2016, SAS is planning to return to capacity growth, through long-haul expansion. It is looking at adding further long-haul aircraft to its fleet, beyond the four A330s and eight A350s currently on order. However, competition on long-haul markets is also fierce.
China started 2015 with five of its airlines flying long haul. By the end of the year, the number will be seven – the same number of airlines across all of North America that fly long haul. Following Xiamen Airlines' 787 services to Amsterdam and Sydney, HNA's Beijing Capital Airlines plans to open services to Europe in Sep-2015. Limited Copenhagen service is planned to be served from Hangzhou and Beijing while Helsinki will be served from Beijing only. Capital Airlines' 54 Airbus narrowbody aircraft will reportedly be joined by three A330s by the end of the year. More international flying – and domestic services – can be expected to make efficient use of the new widebody fleet.
Capital Airlines has a mixture of scheduled and charter services. Under HNA's complex ownership structure, Capital Airlines is part of HNA Tourism, which could generate group benefits from Capital Airlines' expected quasi-charter flights. Most other HNA-affiliated carriers – from Hainan Airlines to West Air to Aigle Azur – are under HNA Aviation. While flagship group carrier Hainan Airlines focuses on North American flying with 787s, Capital Airlines could be used to explore other markets and ultimately be a test case for long-haul service from other mainland HNA carriers, of which there are many.