Finnair to Streamline Support and Management Functions

Finnair plans to improve profitability by streamlining its support and management functions and increasing the efficiency of its marketing and distribution activities.

These plans are part of Finnair’s goals to reduce annual costs by 140 million euros by 2014.

Finnair has already started employee consultations in many of its functions including Finance, HR, IT and marketing. The estimated reduction in workforce is approximately 155 people. The airline also aims to reduce operational costs significantly, for example by cutting procurement, marketing and IT spending.

"Our goal is to make Finnair profitable again, since it’s only the results that justify our existence. Through these painful changes we aim to create a better future for Finnair. We’ve identified together with employees many good cost saving ideas, which don’t have any impact on personnel. The planned personnel reductions are, however, necessary to increase efficiency," said Finnair CEO Mika Vehviläinen. "Reducing costs requires changes in our structures and ways of working. We cannot avoid personnel reductions either. These plans are painful to carry out, but Finnair simply has to change to be able to meet the increasingly tougher competition and take our share of the market growth."

Finnair has already said it:

- has started negotiations to transfer baggage and apron services to Swissport

- is negotiating aircraft leasing agreements which are about to expire to bring them more in line with the current status of the leasing market

- is evaluating the optimum size of its fleet in European air traffic

- has begun analyses of different alternatives to improve cost-efficiency of maintenance services

- continues to investigate partnership opportunities for Catering’s catering production and Finncatering

- has initiated, and is initiating, numerous smaller savings measures throughout the company.

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