Finnair to adjust production, weakened outlook for result

The Finnair Oyj Board of Directors discussed the international air travel industry crisis in a meeting today. The company's Board of Directors approved the acting management's plans and decisions on adjusting operations.

The profitability of the industry had already begun to decline before the terrorist attack. Due to the crisis, the result outlook in the field has rapidly weakened.

Finnair's revenues for the last part of the year are also expected to decrease. Negative changes in the field, should they stretch out and deepen, may lead to a negative operational result for the whole year. As a result, Finnair has decided on changes to its traffic programme at the start of the winter traffic season, in addition to the savings measures already announced.

Scheduled passenger traffic between Helsinki and London Gatwick will be terminated. Traffic between Helsinki and London Heathrow will continue normally. Flights between Helsinki and New York will be cut down by one weekly flight. Some smaller cutbacks will also be made to the winter traffic programme. Leisure flight production will also be downsized. The aforementioned changes will result in an approximately 7% cutback to the traffic plan previously in effect. Capacity will be partly moved to compensatory use. The released capacity from the New York route will be used to advantage by adding one weekly flight to Bangkok.

As a result of the crisis, insurance companies world wide have terminated all the airlines' old third party liability insurance. Insurance premiums have skyrocketed while the maximum level of compensation has fallen to a fraction of what it used to be. Like other European governments, the Finnish Government has decided to secure the operation of Finnish airlines by securing part of the liability. In the case of damage or injury, the Finnish Government would compensate third party property and personal damages for the part exceeding 50 million dollars up to one billion dollars.