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Finnair is betting on Asian flights to underpin its growth

Analysis

A quick look at world route maps reveals Finland's strategic geographic location for flights from Europe to Asia, and it is no surprise that the country's flag carrier is betting on Asian traffic to generate growth. Finnair's Asian focus is not new - it was the first European carrier to operate non-stop commercial service to Tokyo aboard a DC-10 in 1983 - but it received new impetus in Aug-2011 as part of group president and CEO Mika Vehviläinen's restructuring plan to bring the company back to profitability.

Finnair's objective is to double its revenue from Asian traffic from 2010 to 2020 and the foundation of this growth strategy is threefold: the growing Asian markets, fast flight connections and competitiveness. The airline at present enjoys nearly unrivaled competition on its Asian routes in the Nordic market, however, the emergence of a competitor is not far away. Scandinavia's dynamic LCC Norwegian Air Shuttle will receive its first three Boeing 787s in 2013 followed by a further seven in 2014, and Asian routes will most likely be part of its new long-haul network.

The shortest flight path from Europe to China and Japan passes through Finland, but Norway can easily claim a comparable geographic advantage. Norwegian has built up a dense European network, which will feed the new long-haul operations, and it can be safely assumed management will clinch a deal with a regional partner for feed on the Asian side of the operations.

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