Finnair: what a new CEO should know before joining. Cost reductions "absolutely necessary"

Finnair's CEO Mika Vehviläinen stepped down on 28-Feb-2013 to take the helm at cargo handler Cargotec. During his three year tenure, Finnair (which celebrates its 90th anniversary in 2013) came back from heavy losses into the black and added an order for five A321s to its order for 11 A350s. A successor is yet to be appointed, but the group has ambitious targets for its long-haul network and its financial performance. Maintaining profitability to fund aircraft deliveries will be one of a number of challenges for the next CEO.

Mr Vehviläinen set a target of doubling Finnair's revenue from Asian traffic by 2020. Its unit costs are competitive against other European legacy carriers, but less so compared with carriers based in lower wage Asian economies and European LCCs. Both the short/medium and long-haul parts of Finnair's network will need to be highly cost efficient.

The strategy will require growing European feeder traffic and Finnair will need to develop appropriate platforms to deliver this, either organically or by building partnerships such as its joint venture with Flybe.