I attended a roundtable briefing yesterday at the top of the Gherkin in London with Finnair’s new CEO,
Turkka Kuusisto. I am a fan of Finnair in general, as I enjoy their new business class seats which are now on all long haul aircraft and I find their cabin crew consistently great (bar one interaction a few years ago). So what does the new CEO have in store for the airline and have they managed to overcome their challenges with the continued closure of Russian airspace?
In this post:
Finnair to the UK
The briefing started by talking about Finnair’s original route to London, which started 70 years ago. In 1954, a 44-seat aircraft went between Helsinki and London three times a week. This went via Dusseldorf and Copenhagen and took a painful 8 hours! When you compare that to now, when London is the airline’s biggest route by seat numbers and will have 2 A350 per day as well as four narrow-body aircraft, you can see how things have progressed.
Finnair recently announced that they are increasing flights to London from 27 October to 6 flights a day as well as increasing flights to Manchester and Edinburgh. Finnair used the E190s on the Manchester and Edinburgh routes and announced at the meeting that they would be refurbishing these aircraft immediately. Half the fleet should be completed by Spring 2025, with the second half having no confirmed finish date planned as yet. When asked if they planned to replace their A319/320s, which are pretty old at around 20 years, Finnair confirmed that they are discussing possibilities, but no decisions have been made yet. 
While the new CEO has not worked for an airline before, his father was a pilot for Finnair so he comes from a history of aviation. When his father was told that his son had the CEO job, he replied that it was the second-best job in the airline after being a pilot!
Overcoming Russian Airspace Closure
Turkka talked about the problems that the Ukrainian war and Russian airspace closure has caused Finnair with flights to the Far East being massively reduced due to the logistics of the much longer flight time such as having to have four pilots instead of two and having to have two aircraft per day on the route instead of being able to just use one. Prior to the war, Finnair had 40 flights to Japan per week and 35 to China; although this has been scaled back sustainably, Finnair still regards Helsinki as an important hub for Asia with Japan having 20 weekly frequencies. The airline also started Nagoya as a destination and are only airline flying from there to Europe.
The A330s are not capable of flying to most of Asia with the extra mileage so Finnair have had to find new uses for them with new routes in N America and Europe. They have also leased some out to Qantas and Qatar. Finnair made cuts in many areas to survive while working out their new route strategy. These included smaller corporate headquarters and multiple initiatives to become more productive and cost-competitive. All this, along with the new routes, has meant that 2023 was Finnair’s second-best year financially, which is good to see.
New customer and data-focused strategy
One of the biggest upcoming changes was two roles that have been created within the senior management team. Simon Large will head Finnair’s new Customer Experience, Loyalty and Marketing Unit and be responsible for driving Finnair’s product offering, marketing and brand, global sales, and a part of customer service functions,. He was formerly with Cathay Pacific. The other role will focus on operations (which are already extremely resilient).
The customer experience role will look at every aspect from the overall experience with the airline such as friction points in the customer journey and what matters most to customers. They will look at things such as the food, fares such as the new business class lite, baggage allowances and more. Everything will be driven by the customer. I personally find their customer service very good both in the air and on the ground. However, given all the changes to baggage allowances and fares, I think this is an area that could still be looked at further.
Food was also mentioned. I would like to see a second choice on short haul as currently there is no choice. Finnair has already improved their short haul meal by removing the chocolate bar (and formerly a muffin) and now introducing a coffee/tea service with a warm cinnamon roll which sounds delicious! I enjoy the small plate concept on long hauls, although if you fly them a lot, the choices can be a bit repetitive.
The new business class seats have improved seat issues and also stopped customer losing items in the mechanism of the seat as it only has one electric part which is the leg rest which can also be moved manually. It will be interesting to see if other airlines try to copy this in the future.
Post-covid changes in pricing and demand
One interesting thing that was mentioned is that prior to Covid 25% of sales were direct to consumers in 2019, now it’s 60% direct. I suspect this is due to people learning the hard way that if you book through most online travel agents, when things go wrong it can be much harder to resolve than booking direct with the airline (or a proper bespoke travel agent like GTC).
Business travel is still around 25-30% below 2019 levels and not expected to return to pre covid levels any time soon. There is more demand for long-haul travel for business, but technology is being used to replace some travel still.
Post covid demand is expected to tail off now, and with it, fares should start to fall. Capacity constraints led to higher fares than pre-Covid, which has also delivered high yields. 2023 delivered an exceptionally high yield – 25% higher than 2019. Normalisation of yields is starting, which is good news, but it is still elevated in historical terms. Passenger numbers are continuing to grow, with Finnair seeing a a 9.5% year-on-year increase in passenger volumes.
Naturally sustainability was discussed with the same issues as other airline in getting a reasonably priced reliable source of enough SAF fuel. It also appears that customers not willing to pay more to be green.
2 comments
I hope those that were there soundly criticised them on their terrible food offerings because it is frankly shocking what they think they can provide in business and PE, and that’s without mentioning the lounges.
It’s a pity that the Union Flag was upside down, but I’ve found them to be very good. During Covid they were selling cancellable Business Class tickets for much less than BA’s non-cancellable tickets, or QR’s party cancellable ones. I ended up feeling guilty about the number of trips that I cancelled as tours were constantly postponed, so I was glad when I was first able to use a Finnair ticket.
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