Finnair Soars Again After Adapting

by Andreas Spaeth
May 29, 2023

Finnair is soaring again after adapting to the dramatic change in its business model when Russia invaded Ukraine closing airspace.

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Topi Manner was an outsider when he took over the CEO post at Finnair headquarters near Helsinki airport in January 2019, having worked in the banking sector before.

After just one year of honeymoon with the aviation industry, the thriving Finnish airline lost its established business model overnight, just as it started to get out of the Covid-19 aftermath.

“In the last few years with the double crisis of the pandemic and the Russian war on Ukraine we have been adapting like never before in our history of one hundred years,” says Topi Manner (below), a youthful and energetic, yet softly spoken 49-year-old, in talking to in Helsinki.

“This experience has really gone under the skin of everyone in the company. We are very proud of that and the fact that we have survived the double crisis. In the darkest hours of those three years, it was not self-evident for us or any other airline to make it through.”

Just in time for a very special occasion, Finnair is back on track.

“It has taught us that it is not self-evident that an airline turns one hundred years, and that magnifies the historic proportions of the celebration for us,” he points out. Finnair will join peers such as KLM and Qantas in entering the exclusive club of centennials among still-existing airlines. Being the sixth-oldest carrier in the world, Finnair’s predecessor Aero O/Y started operations on November 1st, 1923. “This is very special year for us, we are very proud of our history,” stresses the CEO.

While there understandably won’t be any big birthday bash, Finnair celebrates with its passengers through many smaller gestures – such as special “Moomins” decals on two A350s or special anniversary catering served on long-haul flights from September. The most important birthday present is the result of a common effort of staff and management, showing remarkable resilience: “We are on schedule for our recovery, we are at least on time with our plan, if not ahead of it, and we are moving towards a full year of profits with a busy summer coming, so we are optimistic for the future,” announces Manner.

Quite a remarkable achievement, only one year after the Russian war basically nullified the existing business model of the airline as being the fastest and best-connected European carrier to Asia.

“This ability to change and adapt is the sort of secret sauce of Finnair. And that is the source of our optimism,” says the CEO. “The reason we built back during the crisis is simply our people, we are now a culturally stronger company, we are fast and agile, more resilient, and we are an airline that does things differently.”

Recently, Finnair’s radical approach has shocked some frequent fliers, with the airline offering new Economy Light fares within Europe that include neither checked bags nor any bigger cabin case, but instead, only one small bag fitting under the seat, not taking up any overhead space. The bag allowance in Business Class within Europe is shrunk in June as well. “We want to offer customers choices,” explains the CEO. “On long-haul, we offer a premium product. On short-haul flights, a product that is very convenient, sort of stunningly simple in a very Nordic way. In Business Class people can do short trips within Europe with their carry-on, so we have adapted the bag allowance there.” Finnair mostly cites punctuality reasons as being behind the cutbacks on cabin bag allowances.

One major achievement since the Ukraine war is rebalancing the route network. Most secondary Asian destinations are gone, and the Chinese market currently only gets some very basic services, while Finnair has embraced its Oneworld alliance membership and massively intensified cooperation with its alliance partners. Finnair now flies more to the US in serving the hubs of American Airlines in Dallas/Fort Worth and of Alaska Airlines in Seattle, offering multiple transfer options within North America.

On the other side of the globe, it has inked a wet-lease agreement providing two A330s to Qantas and operates them from both Bangkok and Singapore to Sydney. Finnair is able to put two of its eight A330s to use elsewhere as it doesn’t have the range to serve the carrier’s Asian routes from Helsinki since the distances avoiding Russia have on average lengthened by 40%.

Qantas passengers on the routes from Sydney to Singapore and Bangkok will get to enjoy Finnair’s brand new, game-changing Business Class product, offering the first seat with fixed seatback, providing a kind of cocoon to get comfortable in instead. “The cabin crews for the Qantas flights will come from our outsourced Singapore and Bangkok bases, the pilots are Finnair pilots both rated on A350s and A330s. They will start from Helsinki flying A350s to Singapore, then switching onto A330s flying over to Sydney and staying on this gig for a few weeks,” explains Manner. The first two and a half years will be a wet-lease arrangement with passengers being served by Finnair crews and flights being Finnair-branded. “After that, for another two years, it will be a dry lease of only the aircraft, not the crew. That was a wish of Qantas and also important to their unions,” the Finnair CEO points out.

Finnair now also serves Doha from three Nordic cities, providing ample connections to South Asia, Africa and Australia. The results already show: “Our well-functioning hub in Helsinki is clearly a competitive advantage. This is why we now see new customer flows, like US passengers flying to Italy or Spain via Helsinki, or Indian customers connecting in Helsinki to the US and vice versa,” Manner points out.

“Helsinki airport is one of the best functioning, if not the best airport in Europe. In the chaotic summer of 2022, the longest queuing time we ever had was 45 minutes, which made headlines in Finland, but was nothing compared to other European hubs, and our on-time performance was the best in Europe together with Norwegian.” In other good news, passengers going through security in Helsinki can take liquids on board again without the usual limitations, a bonus of the newest scanning devices being in place.

“Courage is one of our core values, and many of these examples show that, we have been doing courageous moves and it has been paying off,” says Topi Manner, looking back at some of the toughest times in his professional life. “We needed to change the airline in a very short time frame, more than we changed it in previous decades. This is kind of what you need to do to adapt to this kind of external shocks, these external black swans that we encountered.” And apparently, under extreme circumstances, Finnair has found the right formula, again.