Finnair’s hard hit on the closure of Russian airspace bounces back
Finnair, which celebrates its centenary at the end of 2023, has suffered greatly from the closure of Russian airspace – its rapid access to Asia – but it is fighting.
With a fleet of 80 aircraft and carrying nearly 15 million passengers annually before the pandemic, the airline proudly looks back on its history, but this year lost its unique niche almost overnight, having been built to perfection over nearly four decades.
The airline started the first non-stop flight from Western Europe to East Asia in 1983. The use of Soviet airspace was not allowed at the time, but due to Helsinki’s location in the far northeast corner of Europe, a modified DC-10 -30ER with additional fuel tanks was able to do the trick and reach Tokyo in 13 hours via the North Pole.
A big advantage at a time when almost all travelers from Europe and North America to Japan had to stop in Anchorage, Alaska. This increased the elapsed travel time to 16 hours.
In 1994, Finnair entered Russian airspace after a few minutes’ flight east of Helsinki and reached Tokyo on this express route in only about nine hours.
Finnair and Helsinki-Vantaa Airport developed their business model to perfection, adapting everything to fast transfers and the needs of Asian passengers. No other airport in Europe has sports signage in the terminal transfer areas in English, Mandarin, Korean, Japanese and Russian. The airport has just completed an ambitious expansion program spanning more than a decade and worth around one billion euros.
The whole concept collapsed in February 2022 when Russia invaded Ukraine and the country closed its airspace to all EU-based airlines days later, while Chinese, Indian, Arab or Turkish airlines still use these cherished shortcuts over Russia.
“Finland is geographically the country most affected by the closure of Russian airspace, it is certainly a big problem, there is no denying that. No other airport has suffered worse than Helsinki”, admits airport manager Ulla Lettijeff when speaking to Airlineratings.com.
“We have to fight and generate as much revenue as possible and somehow fill the gap created by the war and the pandemic.”
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26/02/2022 Finnair’s good times seemed to come to an abrupt end. This was the last time flight AY073 from Helsinki to Tokyo was able to follow its usual route over Russia. Now it flies a new route to Tokyo, which is actually an old route from the 1980s via the North Pole. Instead of 7,900 kilometers, the distance of the Airbus A350 is now almost 13,000 kilometers, which lasts more than 13 hours in the air and consumes more than 40 percent, or 20 tons more fuel.
As a small consolation for passengers, Finnair has once again published its famous North Pole certificate, which commemorates the flight over the northernmost point in the world. The route to Tokyo is the only connection across the Pole, while the return flights go around Russian territory via South Korea, China, Kazakhstan and Uzbekistan to Europe.
“Our geographical advantage is gone, we are preparing for a situation where Russian airspace is closed for a long, long time, so in our new strategy we adapt to that reality,” Finnair CEO Topi Manner tells Airlineratings.com. exclusive interview.
One big problem for Finnair is that China is still closed to normal air traffic, which used to be the airline’s second largest Asian market after Japan, both countries alone provided Finnair with almost a million passengers a year before the pandemic.
Between 2010 and 2018 alone, traffic in Asia had doubled, more than 20 destinations flew from Helsinki, including six cities in China and four in Japan, and there were almost a hundred flights a week to the Far East, which generated half of Finnair’s turnover. .
However, the CEO does not want to give up this most profitable market area: “Don’t discount Asia, Asia is still very important to Finnair”, he stresses.
Although secondary cities such as Nanjing, Sapporo or Osaka will no longer be served, Finnair plans to maintain a presence in Tokyo (moving from Narita to Haneda Airport, saving passengers time on the ground), Seoul, Singapore, Bangkok and Phuket.
“When China opens up, and we believe it will open up, we have a good chance of flying profitably to Shanghai and Beijing, even if Russian airspace is closed,” says Manner.
Hong Kong and Guangzhou are also served again, as well as Delhi and Mumbai. “In order to provide a connection from India to the United States via Helsinki, India is one of our growth markets and the Middle East is another example,” Manner emphasizes. “The number of destinations in Asia is decreasing more than their share of turnover. As crop yields rise and China opens up, Asia can still generate up to 30 percent of our revenue, from just 20 percent initially to 25 percent after the attack.
An important cornerstone of Finnair’s new strategy for adapting to the new world is close cooperation with its Oneworld alliance partner, Qatar Airways. “The geography is changing with the Russian invasion, and with this changed geography, we need to change our strategy to create a more geographically balanced network. This also means that Doha’s importance as a hub between East and West is growing,” the CEO emphasizes.
“We fly daily Airbus A330 flights from four European cities to Doha starting in November and December, to Helsinki, Stockholm and Copenhagen, and four to be announced. We believe that these flights are profitable for us, in total there are 28 flights per week during the northern winter, approximately the same number as we had to China before the pandemic”, explains Manner.
As a geographical counterweight, Finnair has also implemented a new hub service in the United States: “We have opened Dallas/Fort Worth as a new year-round destination to connect with the American Airlines hub, it started well. Our US flights were 90% full in July and most of the customers started their journey from the US, says Manner.
When other major airlines have been constantly condemning the importance of alliances in recent years, being part of it is a savior for Finnair: “We benefit from the Oneworld alliance quite a lot, I would say more than before the pandemic,” he estimates.
And only with competent partners like the Oneworld airlines at hand will give Finnair a new perspective, he can claim that “we are and will continue to be a network airline”, although he even plans to turn profitable from 2024.
The Finns certainly do not sacrifice their once profitable business to the brutal tunes of their giant neighbor Russia.