Finnair commits to growth with long-haul fleet modernisation

Finnair is to acquire 12 new Airbus wide-bodied aircraft, as it modernises its long-haul fleet. Of the aircraft, nine are A350s and three are A340s. Owing to strong growth in Asian traffic, the A340 aircraft will be acquired earlier, in 2007-08.

The Airbus A350 is a new type of aircraft and the first of them will join the Finnair fleet in 2011. The value of the order will amount to over one billion euros.

"This is the biggest fleet modernisation in Finnair's history. By 2009, our long-haul traffic fleet will consist of at least ten aircraft. The decision reflects our confidence and commitment to our Asian growth strategy. It will enable us to open new destinations as well as to increase flight frequencies to destinations where demand is greatest. In addition to China we are opening new routes to Japan and India," said Finnair President and CEO Keijo Suila.

Next year the airline's aim is to increase by one aircraft the present seven-strong Boeing MD-11 long-haul fleet, to satisfy increasing demand in Asian traffic. The MD-11 aircraft, however, will be withdrawn from the Finnair fleet by 2012.

The Airbus A350-900 is a new-generation wide-bodied long-haul traffic aircraft, the production of which will start in 2009. The choice of this aircraft type was influenced by the affordability of its capital and operating costs compared with the other options. Thanks to its new technology, the Airbus 350's fuel consumption per passenger is one third lower than that of the current Boeing MD-11 aircraft.

The nine 314-seat aircraft ordered by Finnair will be delivered to the company in the years 2011-13. Finnair also has options for four additional aircraft.

The Airbus A340 aircraft is a widely used long-haul traffic aircraft all over the world. The A340-300E aircraft ordered by Finnair will have 303 seats. Finnair also has the option of ordering additional aircraft.

"The aircraft acquisitions are flexible, so we can adapt to the development of long-haul traffic capacity and the route network. We can exploit our additional order rights, take some of the aircraft on fixed-term agreements, delay some orders, if necessary, or change orders to smaller 250-seat aircraft," explained Jukka Hienonen, who takes over as Finnair's President and CEO at the beginning of next year.

The choice of the Airbus aircraft will streamline Finnair's long-haul and European fleets, generating benefits both in crew utilisation and aircraft maintenance.

"Fleet harmonisation has naturally been an important factor in our choice. After the transition stage, our scheduled passenger traffic fleet will have two aircraft families, the wide- and narrow-bodied Airbuses and the smaller Embraer aircraft," says Hienonen.

A modern fleet brings many advantages

Finnair has been modernising its fleet since 1999. Over a five-year period, 29 Airbus A320 series aircraft, in three different sizes, were acquired for European traffic and long domestic routes. After the Airbus programme ended, Finnair initiated this autumn an acquisition programme for a smaller type of aircraft, the Embraer, in which sixteen 76-100 seat aircraft will be obtained for European and domestic traffic.

"The new fleet structure will give us flexibility in managing capacity. During the last five years, half of the Finnair Group's fleet of 70 aircraft has been modernised. We implemented a one billion euro fleet modernisation during the most difficult years in the airline industry's history. This year the company is debt-free and financially sound. We can embark with confidence on the investments ahead," said President and CEO Suila.

As part of the fleet modernisation, Finnair will withdraw the remaining Boeing MD-80 aircraft by summer 2006.

"By next summer, our fleet will be one of the most modern in Europe. A modern fleet will significantly enhance our eco-efficiency. The new aircraft have lower emissions and consume less fuel than the older aircraft," added Hienonen.

Eastward expansion the key to profitable growth

Finnair has purposefully increased the number of its Asian flights since 1999 and now has more than 40 flights a week to Asian destinations. One quarter of the company's scheduled passenger traffic revenue already comes from Asian traffic. Most recently, at the beginning of September, Finnair opened a route to Guangzhou in China, to which it flies three times a week. Finnair flies twice a day to China and to Bangkok in Thailand and daily to Japan. Earlier this year, the company announced that next summer it will start flying to two new Asian destinations, Nagoya in Japan and Delhi in India.

"The Asian economies are the fastest growing in the world. This is always positively reflected in passenger demand. The population base provides a foundation for nearly limitless growth. We intend, however, to grow eastward in a considered way, while continually exploiting new opportunities as they arise," concluded Hienonen.

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