Finnair could become involved in airline consolidation activities, the management announces in reporting a 2010 loss and projecting a profit for 2011.
The guidance comes as the airline once again has had to declare an operating loss for the full year just passed, although the loss at €13.3 million (on turnover of €2 billion) was sharply down from the €114.9 million loss of 2009. For 2011, Finnair sees a 10% increase in capacity over 2010 levels with turnover growing commensurately to deliver a full-year profit. That is despite an outlook for a loss in the first quarter.
Finnair, which has been in a major restructuring mode and is planning now announcing further steps in its technical services operation, also may have bigger plans to change the makeup of the airline. Finnair president and CEO Mika Vehvilainen says that “the consolidation trend in the sector is expected to continue in Europe. Finnair is assessing its own role in developments and is seeking to take advantage of the best options from a shareholder perspective. Developing the cooperation network will strengthen Finnair’s market position.”
Finnair has had a heavy focus in recent years on growing its network to Asia, and is looking to do more on that front as well in 2011, with capcity growing 20%.
Despite the generally positive outlook, Vehvilainen notes that the full-year fuel bill will be higher in 2011, because of increased capacity and higher costs. Unit revenue is projected to be flat.
Meanwhile, the Finnair Technical Services and Finnair Engine Services operations are undergoing a shakeup. In a statement, company senior vice president for technical services Kimmo Soini notes that “international competition in aircraft maintenance activity is continually intensifying. Our own competitiveness has weakened as costs have grown and we have had to consider a complete restructuring.”
Coupled with fleet changes at the airline, Finnair has decided that in the case of its technical services “to discontinue mainly external, unprofitable aircraft base maintenance work,” Soini says, adding that “our objective is to focus on quality, cost-effective technical support of Finnair’s own fleet.” The move could see 450 jobs shed.
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