Finnair and Flybe sign agreement on transfer of Finnair's Embraer traffic
Finnair PLC STOCK EXCHANGE RELEASE 12 october 2012 at 9.00 am EET
Finnair and Flybe have signed a definitive agreement according to which Finnair's Embraer 190 aircraft will be operated by Flybe Finland Oy from October 28, 2012 onwards. The companies signed a Memorandum of Understanding on the cooperation on May 22, 2012. This cooperation is a part of Finnair’s efforts to improve the profitability of its European network, and it offers, when fully matured, potential savings in excess of 25% in cost categories impacted by this cooperation.
Under the agreement, Finnair will transfer the operation of its twelve 100-seat Embraer aircraft to Flybe in a transfer of business. From October 28, 2012 onwards, Flybe will operate these aircraft for Finnair as contract flights, which means that the commercial control and risk for these routes remains with Finnair. Finnair continues to be responsible for sales, marketing and customer support for these flights, which means that from the customer point view, the change will be virtually unnoticeable. The cooperation is not expected to have an impact on Finnair's revenues or balance sheet, but Finnair is looking for significant cost savings through Flybe's more efficient operating model.
“This contract flying agreement with Flybe covers approximately one third of our European flights,” says Mika Vehviläinen, Finnair CEO. “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.”
"We are delighted to have formally secured this contract, which we believe is testament not only to our reputation for quality and efficiency of service but also to the strong working relationship we enjoy with Finnair," says Mike Rutter, Managing Director of Flybe Europe.
Finnair and its pilot association have agreed that the Embraer pilots will remain employed by Finnair in connection with the business transfer and that they will be flying Embraer aircraft for Flybe under their current terms of employment. Following Finnair cabin personnel's decision to give up their right to transfer to Flybe's employment in connection of the business transfer, Flybe is hiring new cabin personnel for the Embraer traffic.
Finnair continues analysing opportunities to improve efficiency also in the European Airbus traffic.
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:
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has signed a partnership agreement with LSG Sky Chefs Group according to which LSG assumed full managerial and operational responsibility for the inflight and catering service provider Finnair Catering Oy from August 1, 2012 onwards,
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is sourcing Finnair's engine and component services from SR Technics from Q3 2012 onwards,
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is optimizing the size of its fleet in European air traffic, and has discontinued the leases of four Airbus 320 series aircraft in 2012, and subleased five Embraer 170 aircraft,
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has improved its route planning and aircraft utilisation,
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has chosen Swissport as its partner for baggage and apron services from December 2011 onwards,
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is streamlining its support functions as well as marketing and distribution activities, and
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has initiated numerous other savings measures throughout the company.
Further information:
Finnair Media Desk, tel. +358 9 818 4020, comms(at)finnair.com.
Distribution:
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Flybe
Flybe of UK is the largest regional airline in Europe. Finnair and Flybe established Flybe Nordic AB in 2011, and Flybe owns 60 per cent and Finnair 40 per cent of this company. Flybe Finland Oy is 100 per cent owned subsidiary of Flybe Nordic AB. Before the cooperation announced today, Flybe Finland Oy has operated 15 domestic and other short-haul routes for Finnair as contract flying. In addition, the company flies several other routes at its own commercial risk.
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