Aviation stakeholders must work together in order to build a sustainable future
What are your plans and targets for 2017?
Two years ago (2015) was the turnaround year for us. Our profits turned to black, we received our first Airbus A350 aircraft, and we started the biggest recruitment in Finnair history.
In 2016, we continued on that growth track, opening two new long-haul routes to Guangzhou, China, and Fukuoka, Japan, and several new European routes. We have also put a new and stronger focus on customer experience and digital transformation, and continued the successful introduction of A350 aircraft into our fleet.
We continue to build on our Nordic heritage to offer a unique experience to our customers
Growth, digitalization, and the customer experience are the key themes for 2017–2018. In 2017, we will receive four more Airbus A350 aircraft, and open new routes to San Francisco in the United States, Havana in Cuba, Puerto Vallarta in Mexico and Puerto Plata in the Dominican Republic. And, we will start year-round operations to Reykjavik.
We will roll out Wi-Fi connection to our entire long-haul fleet and start the Wi-Fi installations in our narrowbody fleet, and put mobile apps into use in our aircraft maintenance work. These are just some examples of our digitalization efforts.
Customer experience continues to be key in attracting and retaining customers, and we continue to build on our Nordic heritage to offer a unique experience to our customers.
Will the business strategy continue to be based on providing quick connections between Europe and Asia?
Europe-Asia traffic continues to grow, and we intend to take our share of that growth. In fact, Finnair intends to double its Asian traffic by 2020 from a 2010 baseline, taking advantage of the geographical location of our Helsinki Hub, which enables fast connections between Asian megacities and Europe.
You have to have a brand that stands for something. We are proud of our Nordic roots
We aim to maintain the current mix of roughly 80–20 between Asian and North American destinations, and naturally we also grow our European feeder traffic in line with our long-haul growth.
Do you aspire to be a global brand or is it more a case of becoming the top provider in your particular markets?
Our focus is on Europe-Asia connections, and, of course, we want to increase the recognition of our brand in the key markets we operate in. You have to have a brand that stands for something. We are proud of our Nordic roots, and our Nordic heritage shows in our branding and marketing activities across all markets in which we operate.
What will the Airbus A350 mean for your cost base and network development? And is the extra pilot training proving more challenging than expected?
The A350 has performed in line with our expectations, and the impact on our fuel economy is already showing in our figures.And the feedback from customers has been excellent. We are the first European airline to operate the A350, and the investment in customer comfort has resulted in clear improvements in our already good customer satisfaction figures.
We are undertaking a massive training effort, ensuring our A330 pilots are prepared for A350 operations
The A350 also brings some new destinations within the 24-hour fleet rotation, improving the attractiveness and economics of some exciting route possibilities.
As for pilot training, we are undertaking a massive training effort, ensuring our A330 pilots are prepared for A350 operations. We recently made some more space in our winter traffic program to accommodate pilot training so that we are ready for our growing operations in summer 2017 and beyond.
Finnair is very involved in sustainable development. What does the industry need to do now that we have the ICAO agreement in place?
Finnair has been advocating the creation of a global emission reduction scheme for many years, and we are very pleased that this historic milestone has finally been reached.
After the agreement, it is time to work on the details of the scheme, for example monitoring metrics and defining the types of emissions units that are accepted.
It is vital that more countries volunteer to participate from the beginning and that the Carbon Offset and Reduction Scheme for International Aviation (CORSIA) will become a single, global, mechanism to help avoid a costly patchwork of regional and local measures that still seem to be emerging. A global sector needs a cost-effective, environmentally-sound system to reduce emissions and have the license to grow.
Finnair has been one of the forerunners in sustainability reporting
We need to continue to work on the other environmental fronts to improve the sustainability of aviation.
Finnair, for instance, has been one of the forerunners in sustainability reporting and we are also looking at social responsibility metrics more carefully, such as human rights, supply chain sustainability, accessibility and non-discrimination, and the wellbeing of employees and customers.
Is there a danger that other environmental work, such as biofuels or operational efficiency, will be lost in the drive to implement carbon offsetting?
Work naturally must continue on all fronts, and there are also economic drivers that support sustainability—the use of modern technology, the adoption of sustainable alternative fuels, efficient operational practices, and improvements in infrastructure will also help us to achieve carbon neutrality and emission reductions.
For Finnair, the modernization of our long-haul fleet with the Airbus A350 is one of the most important factors contributing to our environmental targets, and it also supports our cost competitiveness. Additionally, we are heavily involved in the Helsinki Green Hub project that aims at facilitating the future use of biofuels at our Helsinki Airport Hub.
What do you see as the industry’s biggest challenges to growth? In particular, is consolidation essential to sustained profitability?
Consolidation will continue. And it will take many forms, as airlines seek scale benefits to improve their competitiveness. Also, in Europe, we are still struggling with structures and business models from the past—in terms of labor agreements and air traffic control, for example.
By working together across the industry in addressing challenges, we can get better results
I am also worried about the growing aviation taxes and fees in Europe that are starting to appear country by country. These put the European aviation industry at a competitive disadvantage globally.
Trust is the key to building the future of aviation. By working together with our employees to build the future, and by working together across the industry in addressing challenges that are common to all of us, we can get better results.
Can aviation move fast enough to meet the needs of a modern, dynamic market or is there too much compliance-based regulation that slows the speed of innovation and progress in the industry?
I do see some out-dated and protectionist regulation hampering innovation in the sphere of digitalization and in developing intermodal travel chains. A good example here is EU consumer legislation.
But despite the heavy regulation, we do have opportunities for innovation. Finnair is looking at using IATA’s New Distribution Capability standard, for example, to improve distribution and enable collaboration with new partners. The airline is also deploying mobile applications in the work process in its technical services to improve productivity.
Are you an optimist that believes the industry has finally beaten the boom and bust cycle or will it remain vulnerable to external shocks?
Aviation as an industry continues to be vulnerable to external developments. Security concerns, changes in the world economy, and natural disasters will always be reflected in our business with immediate effect.
On the other hand, as we have seen during the past year, travel also recovers fairly quickly now. But ticket prices are under continuous pressure, and an airline must always be very disciplined about cost to remain both agile and competitive.
What is Finnair doing to increase diversity and why is diversity a good thing for an airline?
We want to attract the best talent to support our business strategy and build the future Finnair. That is not possible if we do not foster diversity. Diverse teams produce better results, and can better anticipate and meet the needs of our diverse markets. •