Finnair to Incorporate its Ground Handling Operations

At a meeting held on February 23, 2004, the Board of Directors of Finnair decided to transfer the operations of the Finnair Ground Handling (FGH) business unit into a wholly owned subsidiary of Finnair Plc as of May 1, 2004. The Finnair subsidiary FinnHandling AB, which has operated under the FGH business unit at Stockholm Arlanda since June 2003, will become at the same time a subsidiary of the new company.

The Finnair Ground Handling business unit's mission is to provide, develop and market quality ground handling services for transport companies and their customers in Finland and neighbouring countries competitively and profitably.

FGH has operated since 2001 as part of the Finnair Group's Aviation Services division, which currently also includes Finnair Catering Oy, Finnair Facilities Management Oy and Finnair Technical.

During that time the business unit has enhanced the efficiency of its activities by outsourcing ground handling services at a number of domestic airports and by extending multitasking among its personnel. The improvement in competitiveness will continue as part of the Finnair's Group current cost-cutting and operational efficiency programme. At the same time new customer relationships and business opportunities will be sought.

The customers of FGH and the new company are Finnair's Scheduled Passenger Traffic and Leisure Traffic divisions as well as a number of other scheduled service and charter airlines. A more independent status for the unit will improve opportunities for expanding the customer base for ground handling services and for providing services more flexibly to different customer segments.

The companies' budgeted turnover for 2004 is approximately 70 million euros. The companies currently employ around 1,030 people. In addition, Finnair Ground Handling and FinnHandling AB have a network of 12 partner companies for the provision of ground handling services.

Finnair stated that the name of the new company will be announced when the necessary official authorizations have been obtained.