Finnair to bring Wi-Fi to its fleet, pins its turnaround plans on the new Airbus A350-900 and service improvements

Finnair‘s (Helsinki) Board of Directors has approved an investment program for bringing Wi-Fi connectivity to the majority of Finnair’s wide-body and narrow-body fleet.

Finnair will introduce its first onboard Wi-Fi service in the fall of 2015, with the arrival of the first Finnair A350-900 XWB aircraft. In 2016, the company will start Wi-Fi installations on Finnair’s Airbus A330 long-haul aircraft as well as its European short-haul Airbus fleet. Installations are expected to be completed by 2018.

Meanwhile the company issued its plan to turn around the company. The top management briefed its shareholders on the plans:

Finnair CEO Pekka Vauramo has listed new meal services on board, full flat Business Class seats, Economy Comfort seats and the new Light ticket type as good examples of its service renewal. In addition the company has begun investing in different digital services.

According to Vauramo, Finnair’s fleet renewal plays a key role in the company’s new phase. In the second half of this year, Finnair will be the first European airline to operate the next-generation Airbus A350-900 XWB aircraft.

“The first long-haul operation with the new aircraft is at the end of October, and Shanghai, Beijing and Bangkok are the first destinations,” Vauramo says. “On these Asian routes we get the most out of our new aircraft. The new aircraft will improve our product, decrease costs and also decrease our CO2 emissions.”

“As the fleet investment program proceeds, our long-haul will start to grow in 2016. We seek growth in traffic and in revenue with these aircraft. As we are now more cost-effective, thanks to our structural changes, I believe we have a strong foundation to produce results with the new fleet,” Vauramo estimates.

“Growth also creates jobs. Every new Airbus A350 XWB aircraft that grows our fleet will create approximately 200 jobs at Finnair. Half of this is flying personnel, and the other half is in other functions,” Vauramo stresses. “Increasing the fleet size by five long-haul aircraft will create approximately 1000 jobs in Finnair in the next five years. The company employed approximately 4500 persons at the end of 2014.

Finnair continues to seek growth in Asia, where the company now has more than 70 flights per week. Economic growth in Asia continues, but there are growth opportunities also in North America. Finnair is opening a new route to Chicago this June.

Successful savings program enabled move towards growth strategy

Klaus Heinemann, Chairman of the Finnair Board of Directors, stressed in his opening speech the importance of reaching collective labor and savings agreements with all personnel groups through negotiations in 2014. “For this, I want to express my sincere and warm thanks to the whole Finnair personnel. We are very fortunate that we are not in the same position as some of our competitors who have struggled with strikes during this and last year,” Heinemann said.

Heinemann also highlighted the significance of 2015. “We are now moving to a new phase, where in line with our strategy, we seek to grow revenue. Even if the changes ahead are positive in nature, they will not be easy, as launching new products and taking new aircraft into use always requires an organization to learn new things and move away from old ways of working. I believe that the Finnair team is well aware of the great opportunities the upcoming changes of 2015 offer us to improve our performance, and the Finnair spirit will support the performance of the team.”

Discussion still needed on ownership structure and the financial challenges of domestic flying

Chairman of the Board Heinemann reminded the shareholders of the wish he made last year, and called for continuation of constructive discussion in Finland on Finnair ownership structure and the company’s future in the consolidating aviation market: “I believe that Finnair’s future matters to the whole Finnish national economy, and hence it would be worthwhile to consider how the good air connections in Finland could best be secured in this consolidating world.”

Heinemann also brought up the challenges of Finnair’s domestic flying. “Our business on domestic routes has been financially in the red for a long time,” he said. “I understand the national concern in Finland over maintaining air connections.” Heinemann also said he had familiarized himself with the Finnish aviation strategy published by the Ministry of Transportation.

He pointed out that a responsible Board of Directors has a legal obligation to address the challenge presented by domestic flying. “Finnair has expressed interest in taking part in discussions on the different ways demand for aviation could be stimulated in Finland,” he added. Heinemann also noted that it is important to separate the obligation of the public sector to provide a service, and the obligations of a listed company.

Image: Airbus.

Video: Finnair Chairman Klaus Heinemann’s opening speech at AGM on March 25, 2015.