Finnair May Outsource Narrowbody Flying

Finnair plans to outsource all or part of its narrowbody flying to a new affiliate company. The airline said today that it is in talks with possible partners for a joint venture that, it hopes, would be able to operate European services at much lower costs. A partner is expected to be selected by the middle of this year, and the new airline should be flying in the first half of 2013, according to CEO Mika Vehvilainen



The Finnish carrier’s losses grew in 2011 despite a €140 million ($186 million) cost-savings program. The airline’s full-year net loss was €87.5 million, up from a loss of €23 million a year earlier. Finnair expanded capacity by almost 17% last year even though some of its important Asian routes were hit by slowing demand after the earthquake and tsunami in Japan, Also traffic growth started to decline in other markets in the second half. Demand was up 11.8%, but that came at the expense of a 3.1% reduction in unit revenues. Finnair’s turnover was up 11.6% at €2.25 billion.
The airline already has a joint venture for regional routes with FlyBe, FlyBe Nordic, but is not talking to the British carrier about expanding the service to narrowbody flying. Vehvilainen also ruled out Norwegian Air Shuttle and SAS, its two primary competitors in the region, as possible partners.

Source: Aviation Week