LONDON – Despite their troubles, it is my opinion that Finnair’s strong brand will enable a significant bounce back from their problems going into the future. Welcome to The Editor’s Corner.
The Editor’s Corner is an op-ed series from AviationSource Editor-in-Chief James Field, who is going to give his thoughts (Maybe controversial) on all things going on in the aviation industry.
In case you have missed the last 32, feel free to browse through them before you continue to read this piece:
- The Editor’s Corner #1: The Industry Isn’t Ready for Summer 2022 Demand
- The Editor’s Corner #2: JetBlue’s Offer for Spirit Airlines Will Change The American Airline Dynamic
- The Editor’s Corner #3: Boris Johnson’s Damage To The Aviation Sector is Another Reason for Resignation
- The Editor’s Corner #4: PLAY Will Transform The Market with a Post-Pandemic Edge
- The Editor’s Corner #5: Detriment of the Boeing 737 MAX & 787 Is Causing a 777X-Based Aftershock
- The Editor’s Corner #6: Qantas’ Plans For The Future Will Turn Around Negative Times
- The Editor’s Corner #7: The P2F Market Is Hotting Up…
- The Editor’s Corner #8: O’Leary Is Gunning For Another Cheap Boeing Order
- The Editor’s Corner #9: Ukraine Crisis: Turkish Airlines’ A350 Snap-Up from Aeroflot May Have Something To Do With A Red Carpet…
- The Editor’s Corner #10 – Ukraine Crisis: Lessors Will Not Win The Russia Battle
- The Editor’s Corner #11 – Spirit Airlines Are Slowly Changing Their Mind…
- The Editor’s Corner #12 – The Indian Air Cargo Market Is Hotting Up
- The Editor’s Corner #13 – Video Footage From RedAir Flight 203 Highlights Dangers of Carrying Luggage During an Evacuation
- The Editor’s Corner #14 – The Spirit-Frontier-JetBlue Battle for Merger Will Be Remembered As A Mess
- The Editor’s Corner #15 – Flyr, Norse & Norwegian Have Opportunity to Capitalise on SAS’ Woes
- The Editor’s Corner #16 – The Airbus & Boeing Battle Will Heat Up At Farnborough
- The Editor’s Corner #17 – My Predictions for Farnborough Were Well Off…
- The Editor’s Corner #18 – Why Do Airports & Airlines Fight Over Chaos When Government is to Blame?
- The Editor’s Corner #19 – Manchester Airport Has Resolved Its Chaotic Period – But Improvements Are Needed…
- The Editor’s Corner #20 – Ukraine Crisis: Wizz Air Abu Dhabi’s Russia Return Was A Mistake From The Get-Go
- The Editor’s Corner #21 – More Than Meets The Eye to The Emirates-United Codeshare
- The Editor’s Corner #22 – Israel Banning Boeing 747s Will Have Massive Impact on Cargo Operators
- The Editor’s Corner #23 – Amid Their Chaos, Qantas Is Taking The Fight to Air New Zealand
- The Editor’s Corner #24 – The Russian Airline Industry Is Heading for a Nosedive
- The Editor’s Corner #25 – Downfall of Doncaster Represents The Beginning of the Regional Collapse
- The Editor’s Corner #26 – The A35K/Delta Order Rumour Mill Highlights Strong Momentum for Airbus
- The Editor’s Corner #27 – IndiGo Leasing 777s Reflective of Demand for Indian Travel
- The Editor’s Corner #28 – Airbus A321XLR Can Make Wizz Air A Global Success Story
- The Editor’s Corner #29 – A British Airways-easyJet Merger Would Change The Landscape
- The Editor’s Corner #30 – Boeing Has Conceded Defeat To Airbus In The Narrowbody Market?
- The Editor’s Corner #31 – The Chinese Regional Market Is Hotting Up
- The Editor’s Corner #32 – JFK’s New Terminal 6 Will Come Too Late
Finnair’s Strong Brand Will Enable A Significant Bounceback
Finnair’s strong brand will enable a significant bounce back from the current issues they are facing.
From dealing with the Russian airspace closure to ongoing strike action over staff pay, Finnair is in a very difficult situation that has to be managed carefully.
I personally feel that they are too much of a strong brand to go under, and this is exactly what will help them get through this difficult period.
Russian Airspace Closure Causes Job Cuts…
Finland’s flag carrier Finnair has ended the change negotiations that were started in early October on its plan to reduce 200 jobs globally.
The plan was linked to the airline’s new strategy published on September 7, which set out a plan to restore Finnair’s profitability.
Due to the dramatic changes in Finnair’s operating environment caused by the closure of Russian airspace, Finnair now reduces approximately 90 jobs in Finland. Some employees can be offered a new role at Finnair. Outside Finland, 57 jobs will be reduced. The personnel reductions will be implemented by the end of February 2023.
“Finnair employees are committed professionals, who in many ways have already had to stretch, first during the pandemic, and then because of the war started by Russia. I’m deeply sorry that we must take these difficult but necessary measures in our quest to restore our profitability,” says Topi Manner, Finnair CEO.
The change negotiations concerned some 770 employees in Finland who work in executive, manager, and expert roles. Finnair has a total of approximately 5300 employees globally.
Finnair offers those who will become redundant support in re-employment through a change security program NEXT. This includes, among other individual career coaching and training opportunities.
Finnair continues its determined actions to restore its profitability, for example, through decreasing unit costs and strengthening unit revenues.
The Difficult Issue of Pay During Period of Losses…
The news of the job cuts by the airline comes just after Finnair was forced to cancel approximately 100 flights leaving Helsinki Airport on Sunday, 20 November, and Monday, 21 November.
The Finnish Transport Workers’ Union AKT announced a strike regarding Finnair’s cabin crew in Helsinki between Sunday, 20th Nov at 3 p.m. EET and Monday, 21st Nov at 3 p.m.
Flight cancellations and rerouting of customers began on Saturday and continued across the weekend.
The strike did not affect flights operated by Norra, nor flights whose cabin service is provided by Finnair’s partners, such as flights to Singapore and India, or flights operated by other airlines’ aircraft and crew, for example, to Barcelona and Madrid.
“We are deeply sorry for the concern and inconvenience this strike is causing our customers, and do our best to reroute our customers as soon as possible,” said Jaakko Schildt, Finnair’s Chief Operating Officer, last weekend.
“It is sad that the labor union has chosen the path of an illegal strike instead of negotiations. Throughout the autumn, we have discussed savings possibilities with the unions, but unfortunately, we have not been able to achieve a result with the cabin crew. We still hope to find solutions together,” said Schildt.
During the autumn, the airline negotiated with all of its employee groups on savings needed to restore its profitability.
This issue will continue with the airline until its financial position improves or is solved completely, but with too many global factors at play, this is going to make things difficult.
Finnair Provides Vital Asia Links…
Part of the reason why I think they will make a bounce back is because of the vital links to Asia that they provided pre-Ukraine and pre-COVID.
They have been able to get around this and even make the most out of a bad situation, as documented by the carrier back in March when the Ukraine Crisis began.
it is the first time in nearly 30 years that it has had to do so.
In typical Finnish positivity, the airline used this to its advantage by awarding certificates to passengers with some stickers to certify that you have flown over the North Pole, which is a very cool touch.
This backs up the tradition that took place as far as 1983 when passengers who flew to Tokyo with the carrier received a similar type of certificate.
What remains clear is that Finnair is determined to ensure that passengers are not that affected by these airspace closures and will do their best, in their true form, to make the best out of what is a bad situation for the airline industry at present.
This is exactly why I think they will bounce back well when the airspace reopens for European carriers.
At this stage, it is too early to call what Finnair is going to do due to the fluidity and volatility of the crisis.
That being said, the airline will probably shift its focus away from Asia and focus on more strength within the Americas, as well as continue to provide lifelines to Asian destinations that are just about unaffected by the airspace closures.
With the airline also suffering drastically from COVID-19, the airline may not be in a strong enough position to adapt that quickly, which would provide further damage down the line.
Finnair may very well have to adopt the same approach that it has done with the COVID-19 pandemic, whereby it will have to sit tight and wait for this all to play out.
Whether that is going to be short or long-term obviously remains to be seen at this stage, but if any decisions are yet to be made, they need to be made now.
Overall: Finnair Can & Will Bounceback From This…
As I have said in the beginning, I believe that Finnair can and will bounce back from its current crises. They are a fascinating carrier that provides significant connectivity globally.
Looking ahead, it’s going to be interesting to see how they can get themselves out of the corner that global factors have placed them in.
Because of the unique geography, Finnair can only do so much with the limited cards that they have in their war chest. But ultimately, it’s how they will use them that will make the difference between victory or a huge loss.