Finnair and Flybe to expand cooperation for cost efficient European connections
Companies have signed MoU transferring 12 Finnair Embraer aircraft to Flybe
Finnair and the largest European regional airline Flybe of UK today announced that the companies plan to extend their cooperation to offer cost efficient European connections for Finnair’s passengers.
Last year Finnair and Flybe formed Flybe Nordic AB, of which Flybe owns 60 % and Finnair 40 %. The companies have now signed a Memorandum of Understanding (MoU) according to which Finnair will transfer twelve 100 seat Embraer aircraft, to Flybe. Starting October 2012 Flybe will operate these aircraft on Finnair routes for Finnair. The move is a part of Finnair’s efforts to improve the profitability of its European network, and it offers a platform for growth for Flybe Nordic.
“This move is a part of our strategy to restore Finnair’s profitability”, says Mika Vehviläinen, Finnair CEO. “The MoU covers approximately one third of our European flights. Flybe offers a cost efficient platform for operating this traffic, and enables us to continue to offer a wide network and multiple frequencies to both our Finnish customers and our customers flying between Europe and Finnair’s Asian destinations.”
“Today’s announcement marks another step in our journey of growth, as we extend further our contract flying operations for Finnair. The extension of the contract flying business is a key part of Flybe Finland’s strategy, providing the business with a good balance of risk”, Mike Rutter, Managing Director of Flybe Europe,
From the customer point view, the change will be virtually unnoticed. Finnair continues to be responsible for sales, marketing and customer support, but the flights are operated by Flybe.
Once the agreement is completed, 12 Embraer aircraft and the traffic operated with them transfers from Finnair to Flybe. In connection with this business transfer, cabin attendants and pilots for this traffic will transfer with the business, unless otherwise agreed in negotiations with personnel. Negotiations on cost savings between Finnair and the Finnish Airline Pilots' Association have proceeded in a constructive manner during the spring. If the savings agreement under preparation is completed, pilots transferring to operate Flybe flights would return to Finnair in stages to be trained as Airbus pilots for Finnair’s growing Asian traffic.
Finnair is proceeding on track with its transformation program that targets 140 million euro annual savings to restore profitability and improve competitiveness. Finnair continues to seek to improve the profitability of the rest of its European traffic. Alternatives include, as has been previously communicated, decreasing the costs together with own personnel or forming additional partnerships.
Finnair announced on August 5, 2011 that it targeted decreases in its annual costs of 140 million euros by 2014. Finnair has already announced that it:
• has chosen Swissport as its partner for baggage and apron services
• is optimizing the size of its fleet in European air traffic, has discontinued the leases of four Airbus 320 series aircraft, and subleased five Embraer 170 aircraft
• has signed an Memorandum of Understanding on the sales of its catering business to LSG Services
• has signed a Memorandum of Understanding with SR Technics on engine and component services
• seeks solutions to improve the profitability of its European traffic
• has improved its route planning and aircraft utilisation
• is streamlining its support functions as well as marketing and distribution activities
• has initiated numerous other savings measures throughout the company.
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