Tuesday, 15 May 2012

Finnair's Asia Strategy

Finnair is the world’s sixth oldest airline. It was founded on November 1, 1923 as Aero O/Y. The carrier gone through lots of tough times including both world wars and faced an uncertainty after those wars. The war also forces the 1940 Olympic Games that were supposed to hold in Helsinki to be cancelled. But, the airline is still staying strong today as one of the leading carriers in Europe. Not until June 1968, the name Finnair was only officially adopted. Today, the airline is a member of oneworld alliance since 1999. It is ranked 4-star by Skytrax and carriers around 10 million passengers per year to 15 domestic and 55 international destinations. The airline is also rated as one of the safest airline in the world.

Recently, the airline begins flying to Chongqing, one of the largest and fastest-growing cities in China. In terms of population, the city is just behind of Shanghai and Beijing. This service will be served by both Airbus 340-300 and Airbus 330-300 aircraft four times weekly. In addition to Chongqing, Finnair has daily flight services to Beijing, Shanghai and Hong Kong. There is an interesting trend among European carriers choosing to fly new routes to secondary Chinese cities instead of flying to Shanghai, Beijing and Guangzhou alone. In April, Air France commenced a three weekly service from Paris to Wuhan, operating by Boeing 777-200ER with 309 seats. While back in March, Lufthansa resumed three weekly flights to Shenyang using an Airbus 340 aircraft. The flight will continue to fly to Qingdao, a new destination from Lufthansa. While, IAG member British Airways is expected to increase flights or start a new route to China very soon after successfully acquired bmi’s slot at Heathrow.

This is the departure hall of Helsinki’s Airport’s Terminal 2. The main hub of Finnair’s operation. 
Finnair has 8 Airbus 330-300 and 7 Airbus 340-300 aircraft in their fleet. These are the only aircraft in Finnair’s fleet that are capable of flying more than 6 hours. Besides that, the carrier has an order of 11 brand new Airbus 350-900 which delivery is expected to start in 2015. The rest of Finnair’s fleet consists mainly of Airbus 320 family aircrafts and the Embraer E-jets. Apart from flying to New York, Finnair deploy all their long range aircraft to destinations in Asia, as they aim to be one of the biggest transfer hubs in Europe for flights from Asia. The carrier has an added advantage to others. The airline’s main hub in Helsinki-Vantaa Airport offers the shortest connections between Asia and Europe. Besides, Finnair’s Helsinki hub will not be that busy and chaotic compare to Paris, London and Frankfurt. The airport was listed as one of the most punctual airport in Europe; it has been designed expressly with transfer traffic in mind. All arrivals and departures are located in the same building. I compare the travel times of major European airlines to some Asia airline hub below:

*One way travel time from Europe to Asia
(Air France)
(British Airways)
Frankfurt (Lufthansa)
Helsinki (Finnair)
Hong Kong

Looking at the table above, Finnair always has a shorter flight time to any Asia destination compare to any airlines in Europe. Previously, the airline was the first airline in Europe to operate a non-stop service to Japan in 1983. Soon after that, the carrier quickly introduced flights to Singapore via Bangkok on the same year. This shows that the airline has a long standing history of operating flights to Asia, as the airline always advertise themselves “The fastest link to Europe from Asia” in commercials. Despite being relative small compare to the likes of IAG, Lufthansa, Air France-KLM; Finnair operates up to 72 weekly flights to 11 Asia destinations. In China alone (including Hong Kong), the carrier operates 25 weekly flights, almost the same number as IAG’s 26.

In May 2010, the airline launched its Vision 2020, hoping to be the number one carrier in the Nordic region and also the top three carriers flying to Asian destinations. The carrier hopes it can increase its Asian presence by offering the best flight connections and competitive price. Part of this strategy is the launch of a revised livery for its fleet, featuring a basic all-white aircraft with a stylized “F” on the aircraft’s tail and the company’s name in a new font.
This Airbus 330-300 aircraft of Finnair’s is carrying the airline’s new livery which features an all-white aircraft, a different font for its company name on the fuselage of the aircraft. 

Rumors circulating around that International Airlines Group (IAG), the parent company of British Airways and Iberia are interested to buy some stake in the airline after the Finnish government announced that it has plans to reduce its stake in the carrier. Perhaps if such a deal gone through, I could see Finnair does some integration in their route network to Asia with British Airways. The deal will certainly benefit Finnair more by offering another alternative for oneworld and British Airways passengers to travel via Helsinki which provides a better connection to Asia rather than travelling through the congested Heathrow.

Overall, Finnair has found its own formula to continue flying in such a turbulent industry. The Asian market is full of potentials and keeps expanding. In future, I expect Finnair to continue explore more flights to the Asia region and provide the best and fastest link between Europe and Asia. 

(The Editor)

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