FINNAIR TO OVERHAUL ITS GROUP FINANCIAL CONTROL AND MANAGEMENT STRUCTURE

It was decided at a meeting of the Board of Directors of Finnair Oyj on November 23, 2000 that the financial control and management structure of the Group should be reformed from the beginning of the financial year beginning on January 2001.

In future the operational functions of the Group shall be carried out through Business Units and subsidiaries which are being set up and which will be organized into six Business Areas.

A Group Management Team will be formed to replace the Management Board of the current parent company, Finnair Oyj. At the same time it was decided to make a few management appointments and to set up three new subsidiary companies, which are to begin operations during 2001. The new companies will be Finnair Cargo Oy, Finnair Catering Oy and Finnair Facilities Management Oy.

Business Units to enhance efficiency

At the present time the Group's business operations consist of Flight Operations, Package Tour Operations and Travel Agency Business. From January 1, 2001 the Group's operations will be divided into the following six

Business Areas:

- Scheduled Passenger Traffic

- Leisure

- Cargo

- Aviation Services

- Travel Services

- Support Services

The purpose of the new management system is to add economic value by clearer and more independent business units, which will have their own management bodies and their own business strategies, objectives and reward principles. A further goal is to take profit responsibility deeper within the organization by making it easier to measure operations and by improving transparency. Each business area and business unit will also be responsible for the capital tied up in it as well as for the return on it.

It is Finnair's aim to make its operations more effective in order to meet the expectations of its customers, its shareholders and its staff. The new Group organization and financial control model will provide us with better capabilities for developing business operations and growth, either through out of own resources or in cooperation with strategic partners. The tougher competition within our industry means that only sufficiently flexible and efficient organizations will be able to react quickly enough to meet the new challenges.

The new Business Areas

Scheduled Passenger Traffic

Finnair's scheduled passenger operations comprise an extensive route network in Finland and elsewhere in Europe, as well as destinations in North America and Asia. The Business Area is responsible for route planning, product development, marketing and cooperation with other airlines. The Flight Operations Department, which is responsible for air traffic operations also comes entirely within this Business Area. Scheduled Passenger Traffic buys in various services from other business units within the Group as well as from outside service suppliers.

Turnover in the Scheduled Passenger Traffic Business Area is approximately EUR 1170 million, of which about 90 % is generated from outside the Group.

Total number of staff employed is about 3650 people and Henrik Arle has been appointed to lead the Business Area.

Leisure

The Leisure Business Area consists of those operations which relate to the Group's leisure travel activities. Included in the Business Area is the business unit responsible for leisure and charter flight activities. It sells flights to package tour arrangers belonging to the Group as well as to other international travel organizer chains. Finland's biggest package tour organizer, Oy Aurinkomatkat-Suntours Ltd Ab, also belongs to this Business Area.

The leisure and charter flights are generally carried by leased Boeing B757 aircraft. As with the Scheduled Passenger Traffic Business Area, the Leisure Business Area also buys various services from other business units belonging to the Group as well as from outside service suppliers.

Turnover is about EUR 310 million and it is almost entirely generated from outside the Group. The number of staff employed is about 350 and Mauri Annala is leading the Business Area.

Cargo

The activities of the Finnair Cargo Business Area are based around making use of Finnair's scheduled traffic network and the company's leisure flights. Where necessary, capacity is also leased from outside providers.

The Business Area makes use of Helsinki's gateway position as well as Finland's northerly location when it sells feeder traffic capacity for other European destinations and when it serves the markets of the Baltic region.

The operations of the Cargo Business Area will be concentrated within the Finnair Cargo Oy, which is to be set up. Turnover is about EUR 125 million and the number of staff employed is about 400. Mikko Kuntola is leading the Business Area.

Aviation Services

This Business Area primarily consists of those units and subsidiaries which support and serve flight operations and air travel. The most important business units are Finnair's Technical unit, which sells aircraft maintenance, and Finnair Ground Handling, which sells ground services. The Business Area will also include Finnair Catering Oy, which is to be set up to handle catering activities as well as the retail and wholesale trade.

Turnover for the Aviation Services Business Area is about EUR 500 million, of which about 25 % is generated from outside the Group. The number of staff employed is about 4700. The management responsibility of this Business Area will be decided later.

Travel Services

This Business Area consists of the Group's travel agencies and other distribution channels. The most important companies are Finland's two biggest travel agencies, Finland Travel Bureau Ltd. and Area Travel Agency Ltd. The Business Area also includes Amadeus Finland Oy, which provides comprehensive booking and data management services and related training and support services for travel agencies.

Turnover is about EUR 110 million, of which about 30 % is generated from outside the Group. The number of staff employed is about 1500 and Mauri Annala is leading the Business Area.

Support Services

Various functions which serve the Group companies, such as Information Technology and certain financial and personnel management services, will come under the Support Services.

A company called Finnair Facilities Management Oy is to be set up to take care of the Group's property holdings as well as property management and maintenance related to operative activities and also to handle office services.

Turnover for the Support Services is about EUR 85 million, which consists primarily of sales to other units of the Group. The number of staff employed is about 450. The Corporate Management will be responsible for the Support Services.

Corporate Management

Corporate Management is responsible for corporate strategy, financial control, Human Resources, risk management, legal affairs and communications.

Aircraft purchasing, sales and leasing are to be concentrated into a unit which itself will also be responsible centrally for the Group's financing activities.

However, in the external financial reporting these activities will be reported under the Scheduled Passenger Traffic Business Area. Eero Ahola has been appointed to lead the corporate strategic planning and development of e-business. Tero Palatsi is leading the Administration and Human Resources and Petri Pentti Economics and Finance.