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

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.

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 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.

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.