14-Aug-2013 4:49 PM

Finnair aims for a clear productivity improvement as part of EUR60m savings programme

Finnair stated (14-Aug-2013) it seeks clear savings in personnel costs as part of its EUR60 million savings programme announced on 26-Oct-2012. The company has further defined its plans as it prepares to discuss collective labour agreements with its flying personnel, customer service personnel, cargo personnel and technical personnel in autumn 2013. The carrier noted that "especially in connection with the collective labour agreement negotiations, there is a good opportunity to agree on necessary savings together. Primarily the aim is to identify saving methods that would not impact base salary, but would nonetheless decrease company costs". Finnair has already begun discussions with labour groups and their respective labour unions (Finnair Airline Pilots Association, Finnish Cabin Crew Union and Finnish Aviation Union) on methods and schedules by which the saving targets could be reached. The aim is to consider how compensation and working time structures could be renewed to make them competitive and to better align them with market salaries and practices. The aim is to also to discuss methods to reduce costs which would not impact on employees’ earnings. The collective labour agreements between Finnair and these unions end at the end of 2013 or the beginning of 2014. Pilots’ and cabin attendants’ share from this programme is approximately EUR35 million, which is divided roughly in half between these groups. Finnair’s saving target for technical and Customer Service and Technical Services employees is approximately EUR8 million. CEO Pekka Vauramo noted that labour costs are not the only item under scrutiny, and the company continues to seek savings across its operations. Finnair has advanced more rapidly than anticipated in its EUR140 million savings programme and has been able to identify items which have replaced those personnel related savings that have not yet realised. [more - original PR]

Finnair: "Finnair’s success is important to Finland and to Finns. For us at Finnair this means that we have to be able to adapt to tight competition and difficult economic times. Together with personnel, we will seek to find solutions that enable the company to operate at market level costs, create conditions for profitable growth and in this way create more jobs in the next decades. From all the means available, the collective labour agreement negotiations are the best way to find solutions together. We are targeting savings from renewal of working time and compensation structures, and by decreasing other personnel-related costs. We want to pay competitive market salaries. Together with personnel and personnel representatives we will seek to find different ways for increasing productivity, and also discuss whether we could find such personnel-related costs which would not impact employees’ earnings....Adapting to the rapid change in the industry is not easy for us at Finnair. We want to act in a responsible manner and face market realities with an open mind. We have the possibility to succeed and grow, but it requires a financially sustainable foundation. Some of our current salary and working time models have been created in a completely different competitive environment, and they are now limiting our growth. This is a highly competitive industry and we must adapt our costs to the market level. We have achieved a lot, but we have a lot of work ahead us," Pekka Vauramo, CEO. Source: Company statement, 31-Aug-2013.

Want More News Like This?

CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More