Topi Manner, CEO, Finnair tells Graham Newton that solving the climate challenge cannot be a separate item on the agenda.
What more can governments do to speed up the industry recovery?
We need more predictability in our operating environment, and it all boils down to travel restrictions. We have seen that the pent-up demand is there, but travel restrictions continue to impact travel demand—even at a very short notice like we saw at year-end 2021. The omicron variant led to many countries re-introducing travel restrictions, which caused challenges for both air travelers and airlines.
As the pandemic is turning endemic, the travel restrictions have served their purpose and governments must now restore the freedom of travel.
Has the crisis fundamentally changed your airline and strategy or has it merely been a pause in your operations and plans?
The fundamentals of our strategy are unchanged. The short northern route we operate allows fast and efficient connections between Europe and Asia, and it also provides a sustainable basis for our future.
Sustainability is as important as ever, and we saw during the pandemic how tightly linked the social, economic, and environmental aspects of sustainability are.
In the past two years, we have become a smaller, faster, and more focused airline. We are committed to our Europe–Asia strategy, even if the pandemic has led us to put more focus on North Atlantic routes, while many of our Asian markets are yet to open. We are also committed to offering a modern premium experience, and this means investing in our customer experience, including digital services.
Going forward, do you think traffic patterns and passenger segments will change, such as less business travel or less long-haul travel?
Some parts of business travel—like short-haul travel to internal meetings with familiar colleagues—may not fully return, as we all have learned to work with virtual tools. But you still need to see customers, your own teams, and your partners face to face. This is not to mention visiting your target markets to see and feel what’s going on. So much of business travel is resilient and will start to grow from that new baseline.
An important trend we see in leisure travel is premium leisure. People want to invest a little more in their journey, be that the destination, hotel or the actual travel experience on board.
To what extent do your ambitious environmental goals depend on third parties, such as improved engines, airframes, and more sustainable fuels production?
Solving the climate challenge of aviation requires collaboration across industries. Take, for example, the development of sustainable fuels, or electric aviation.
Decarbonizing aviation is much harder than decarbonizing road transport, as the laws of physics are against us. No one solves these challenges alone.
We are involved in a Nordic collaboration for electric aviation, and we are also supporting Lappeenranta University of Technology in their synthetic fuel pilot. In 2020, we amended our articles of association to enable investing into initiatives that support the long-term viability of our business, so sustainability is now included in our DNA.
Is there a danger that airlines are prioritizing environmental targets over other business decisions?
The cost of compliance is definitely increasing, with new regulation increasing environmental costs for all airlines in Europe and taking this money away from other initiatives.
But sustainability really has to be integrated into all decision making, it cannot be a separate agenda item. In many cases, what makes sense for the environment, makes sense for the business—like in the case of fuel efficiency improvements.
Another example is food waste. We have a target for reducing food waste, and meeting that target not only supported our environmental performance but also decreased cost.
Why is diversity important and why is it different than simply getting the best person for the job?
Diverse teams have proven to be more productive. With different backgrounds in the team you will get more variety in ideas and innovation—and more understanding of the diverse needs of our customers.
I don´t really see that there is a contradiction between diversity and “getting the best person for the job”. Diversity is a principle and value that we are committed to, it is not a quota-based recruitment criterion, or anything like that. We have to make sure that all our staff understand what diversity is all about. It is about respect towards each other, and dignity in everything we do.
What new technologies particularly excite you?
Synthetic fuels and power to X [taking surplus renewable electricity and converting it into other energy forms] are super interesting, and there are many exiting initiatives around those.
We are supporting a feasibility study run by LUT university in Finland, where a pilot plant would use CO2 from a nearby cement facility and excess hydrogen from another factory’s production as the main raw materials. These are brought together in a synthesis process, giving synthetic methanol as a result, which can be further processed into, for example, synthetic, emission free transportation fuels.
How difficult is it for an airline to be innovative in a safety-first industry that is also weighed down by processes and regulations?
There is room for innovation in aviation, definitely. During the pandemic, we had to find new ways of working in many areas. We have simplified many processes, tightened collaboration within the company and with our partners.
For example, we started sharing information on fuel burn in different phases of a flight with the Finnish Air Navigation Services provider, so that we can work better together to reduce the CO2 emissions of our flights.
A strong safety culture is actually a strong basis for innovation, as safety is always done together, it involves the sharing of data, and there is always the mindset of continuous improvement. These are qualities needed for innovation as well.
In general, what do you see as the biggest challenge or opportunity for aviation in the years ahead?
Solving the climate challenge of aviation, so that the social and economic good created by air connections can continue to benefit the societies we serve.
We cannot afford to lose the great benefits of connecting cultures, meeting face to face, learning to understand each other better, building trust, and sharing experiences together. All airlines are financially burdened by the pandemic, and we must find ways to continue to invest into decarbonizing aviation. We are committed to reducing our CO2 emissions, but we also need customers and governments to work with us.
As an aviation leader, what are the biggest lessons you think should be learned from this crisis?
There are many. How the open sharing of data can lead to breakthroughs in innovation, for example, like it did when the genetic code of the virus was shared with the researchers early in the pandemic, leading to the successful development of the vaccines in record-time. Or how private-public collaboration can be used to deploy innovation at scale, like we have seen with the global vaccination drive. Both of these examples can be of significant use when decarbonizing aviation.
But also, regrettably, we have learned how fragile freedom is in the face of fear and how quick we are to build walls and divides. And how they take much longer to dismantle.