Finnair readjusts growth strategy to A350 arrivals

8 May 2013 by ReggieHo

Finnair is hoping to double its revenue from Europe-Asia traffic by 2020 from a 2010 baseline. So far in 2013, Finnair has transported 8.7 million passengers between the two continents.

A huge component to this growth is the arrival of the airline's firm order for 11 Airbus 350 XWBs, set to start arriving in the latter part of 2015, receiving two to three a year thereafter. The airline also has an additional four A350s on rolling order.

“The most important thing in our fleet renewal will happen 2015 when our A350s will start arriving, that is a major step for us,” says Ville Iho, chief officer of operations at Finnair.

The new aircraft were first and foremost intended to replace Finnair's fleet of seven A340-300s, which would then be leased out, he adds.

“We have not made any definite decisions on new routes, but we will start replacing the A340s from our fleet first and the destinations that we fly with the A350s would be those routes... could be Tokyo in Japan.”

There have, however, been delays in the production of the A350s, which means Finnair has had to adapt its growth strategy.

“According to the original schedule the A350 should be flying already, but certainly it is not. The current schedule, which I am hoping will hold, is that the first delivery will be during the third quarter of 2015.”

In light of that, Finnair has decided on an interim solution, which is to retrofit its fleet with lie-flat business class seats, a process that is set to begin in January. Four of the airline's wide-body aircraft currently have lie-flat business class seats, and the destinations these fly to are on rotation.

“It is clear that all our business passengers want a fully flat seat. So we made a decision that even though the A340s will at some stage no longer be on our fleet we will retrofit all except for two, of which the leasing contracts will be expiring first,” says Anssi Komulainen, senior vice president of the customer service division.

“The two A340s that are not being retrofitted will be history by the end of 2015 when the A350s start coming in,” adds Joseph Knowles, communications specialist at Finnair.

The airline will at that stage assess whether to continue with the original plan to lease the remaining A340s, even though they have been newly retroffited, or consider the expansion options that keeping the new product would allow.

“I would like to retain flexibility and grow if we want to because 340s are a great airplane and they will all have lie-flats... I would suggest you buy assets to fit a market opportunity, and we will assess that market opportunity down the road when those airplanes come in,” says Allister Paterson, senior vice president, commercial divison of Finnair.

These executives are reluctant to pinpoint any specific destinations at this time, but emphasise the geographical advantage that Finnair has flying between Europe and North Asia through Helsinki as a factor they are aiming to optimise.

Alex Andersson

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