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Finnair facing long-haul crisis as its Asia network is cut-off

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I am due to be in Helsinki on Friday to see and fly the new Finnair business class and premium economy seats.

Four years in the planning, the new seating is a key part of Finnair’s plan to bounce back from the pandemic. The airline was planning a rapid roll-out of the new seat, with all of long-haul aircraft to have it by the end of the year.

Finnair A350 business class seat bed

Unfortunately for Finnair, its long-haul strategy is based on flights to Asia via Russian airspace.

It is obviously impossible for the domestic Finnish market to support as many Asian routes as Finnair offers. What it has done for many years is offer competitive Business Class fares across Europe to Asia, via a connection in Helsinki. Because of where Helsinki sits geographically, it isn’t substantially slower than flying directly from the UK, Germany etc and you could make substantial savings.

Finnair new business class seat

Finnair put out a statement yesterday to say that, with the anticipated closure of Russian airspace to European airlines, its Asian network “is not economically sustainable or competitive”. The extra flying time and fuel costs required to bypass Russia would not work commercially.

The airline is able to continue with flights to North America, of course, but there is minimal demand from passengers to fly from the UK, Paris, Germany etc to Helsinki to New York unless the fares are rock bottom.

Finnair new business class A350

In a statement, Finnair’s CEO said:

Despite the massive negative financial impacts that the pandemic had on us, our cash position is still strong, c. 1.7 billion euros at the end of 2021. This includes the currently undrawn 400-million-euro hybrid loan granted by the State of Finland, which also supports our equity. The State owner has stated that Finnair is a company of strategic interest. Under these new circumstances, we as a company feel that functioning flight connections are even more important for the Finnish economy, safety and security of supply. The company is considering different solutions in case the situation prolongs, and it has an active dialogue with the State of Finland.”

Assuming my Helsinki trip goes ahead, I’ll see if we can get any further news on Friday. I am keen to try the new seat – see the pictures scattered across this article – because it doesn’t recline. It is designed to be like a big sofa chair that you can just snuggle into. Will it work? Comments in our launch article were mixed – so let’s see how it performs in practice.

Comments (64)

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  • strickers says:

    Watching with interest, at the moment BKK, HKT and SIN are still operating. I’m flying BKK-HEL-LHR in just under a fortnight.

    • BJ says:

      Has there been any effort to reroute that by yourself, BA or AY? It is clear we were now fortunate that BA refused our request to reroute our cancelled BA flights from EDI-BKK on AY in favour of QR. However, with QR still only flying 4x weekly from EDI with small 788s, the Russian situation, and the grounded a350s, rerouting pax from other sirlines and potentially overbooking seems like a recipe for downgrades and bumps in the short term. Accorcing to the BA agent our seats were purchased by them in the absence of any available award seats, hopefully this will help us retain our business seafs but I am not that optimistic.

  • S says:

    I’m due to fly SIN-HEL-LHR on Saturday so hoping that still runs. The Heathrow leg looks to have the new seats which I’m interested to try out.

    • YC says:

      How do u tell which routes/flights have the new seats?

      • S says:

        The flight is an A330 with 1-2-1 layout rather than the 2-2-1 layout of the existing seats. I think that means the new seat.

      • Rob says:

        The 10.20 Sat has the new seat – I am flying in on it.

  • pauldb says:

    Any airports that could temporarily be a better hub, with an underserved local market? BER?

    • BJ says:

      Prestwick Airport 🙂 They’d get it for pennies (could probably even buy it), no congestion, no weather problems…

    • Lady London says:

      Apparently, only if you want your luggage to potentially disappear.

      Have been told by another airline they were having a lot of issues with this in BER

  • Tim P says:

    I hope my LHR-HEL-BKK; SIN-HEL-LHR flights later this month survive. They’ve been rearranged once already. I was looking forward to trying the new seat.

  • The Streets says:

    HKT booked in a few weeks and hoping to make it to the less than two weeks mark. I wonder what Finnair are like with rerouting passengers

    • marcw says:

      They explicitly say they continue flying to all of SouthEast Asia and India.
      Only China (+ HKG) and Japan are cancelled.

  • Lee says:

    I have a very tight 40 minutes connection for BKK-HEL-MAN for my July trip. Looks like a stopover will be inevitable if this thing last for that long.

  • Nils Lloyd-Penny says:

    We are due to fly LHR-HEL-SIN end of March and back end of April in J. Does anyone know if Finnair cancel the flight would they put us onto a different airline or just refund the money?

  • Bernard B says:

    Hardly a ‘crisis’. Much overused word.

    Finnair has already much increased Atlantic flying from Helsinki and Stockholm as it knew Asian recovery would be slow due to their covid neuroses (and China’s failing covid policy).

    Indian and SE Asian routes see modest diversions. Flight lengthening but not a crisis.

    It will allow faster embodiment of the new product.

    The JAL operated codeshare on a 787-9 to Tokyo is still running.

    So Finbair can’t operate flights to a China and Hong Kong that it wasn’t operating tgat much, and when it did they were empty (in the passenger cabin).

    Hardly a crisis. They might even save their Asian losses.

    • Rob says:

      Check out the Finnair share price reaction.

      • Mike Hall says:

        Just reading this and so no one falls for Russian disinformation, its worth noting that at end 2021 Finnair had 1.5bn debt. It has a 0.8bn market equity value. So it has a 2.3bn enterprise value. Thus, for example, even a 10% fall in the share price implies the Enterprise value has fallen by about 3%.
        That’s not a crisis. Its misleading to suggest it is, even if it grabs headlines. Let’s try and avoid RT style comments please.
        The article has created unnecessary worry too. Those worried need to know that Finnair has a large Finnish state shareholder, that also means this won’t become a crisis.
        Finnair continue to operate Bangkok, Singapore, Delhi, etc.
        For more about their move away from Asia look at this:

        • Rob says:

          Mike – the article is based ENTIRELY on a press release put out by Finnair yesterday.

        • pauldb says:

          1.2b of that 1.5b net debt is lease liabilities, backed by the aircraft. Given that very little of the value that’s been destroyed relates to those third-party owned aircraft, the reaction in the value of the operating business is much greater (and the bonds have dropped about 3% also). The market cap has dropped from about 1.2 to 0.8b so the operating business’ value from about 1.5b to 1.1b.

    • BJ says:

      The fallout could drag on for years but money talks so hopefully loud enough for Russia to come round sooner than later.

    • Lady London says:

      Might depend on freight though. I would take a guess there was a lot of freight business airlines were relying on through that corridor.

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