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Competitive position in intercontinental travel from Scandinavia. Christer Haglund, SVP, Public Affairs and Corporate Communications 10.6.2008. On blue and white wings since 1923. Nine million passengers per year Turnover two billion euros 9,500 employees 64 aircraft Listed in 1989

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competitive position in intercontinental travel from scandinavia

Competitive position in intercontinental travel from Scandinavia

Christer Haglund,

SVP, Public Affairs and Corporate Communications

10.6.2008

on blue and white wings since 1923
On blue and white wings since 1923
  • Nine million passengers per year
  • Turnover two billion euros
  • 9,500 employees
  • 64 aircraft
  • Listed in 1989
  • 7,000 shareholders
    • Government ownership 55.8 per cent
    • Foreign ownership20 per cent
    • Dividend paid every year
slide3

The modern silk road

Seoul

Finland is on the

shortest route to Asia

Europe-Asia: close to 30 mill.

passengers per year

Annual market growth 6-10%

(market doubles by 2015)

europe a natural catchment area for finnair
Europe a natural catchment area for Finnair

Asia

A natural choice if you have to change aircraft, for example from:

HEL

CPH

Stockholm

Gothenburg

Oslo

Hamburg

Düsseldorf

Berlin

Stuttgart

Manchester

Tallinn

Krakow

Riga

Vilnius

Budapest

Warsaw

Prague

BarcelonaMadrid

Milan

Zurich

Venice

LON

PAR

FRA

finnair long haul traffic in 2001
Finnair long-haul traffic in 2001

Tokyo 2

7 New York

Beijing 3

Bangkok 4

Singapore 4

long haul network in 2008
Long-haul network in 2008

Tokyo 4

Nagoya 4

Osaka 7

Seoul 5

7 New York

Beijing 7

Shanghai 7

Hong Kong 7

Guangzhou 4

Bangkok 7

Delhi 7

Mumbai 6

asian capacity has grown rapidly
Asian capacity has grown rapidly

Thailand

China

Japan

India

Korea

slide8

Finnair has most of the fastest connections between Europe and Asia

Airline # of fastest connections

Finnair 278

Lufthansa 126

KLM 40

Aeroflot 35

Air France 35

Austrian 30

Swiss 23

SAS 19

Thai Airways 18

Air China 16

Aerosvit Airlines 11

Alitalia 11

Turkish Airlines 10

British Airways 9

JAL 8

Cathay Pacific 5

China Southern 5

Hainan Airlines 5

Jet Airways 5

LTU Airways 5

Korean Air 4

Others 22

Total oneway flights 720

Routings ranked in reservation systems by total travel times

Source: Amadeus Reservation System, December 2007 flights

slide9

More revenues from Asia than EuropeDistribution of passenger and cargo revenues in scheduled traffic

Domestic

Europe

Asia

US

Aasia-EurooppaVia Helsinki >50 %

Asia-Europegateway >50%

vision 2017
Vision 2017
  • The airline of choice in intercontinental traffic in the Northern Hemisphere
  • Choice of quality and environmentally conscious air travelers
  • Europe-Asia traffic main growth area
  • Next axis between North America and South East Asia further strengthens Finnair’s strategy
  • Via Helsinki concept means the shortest and most environmentally friendly route and a smooth and uncongested connection
modern eco efficient european fleet
Modern, eco-efficient European fleet
  • The best thing an airline can do for the environment is to fly a modern fleet
  • Increased flexibility, improved load factors, lower costs and less emissions
  • Average age of Finnair’s European fleet is four years.
  • European fleet consists of Airbus A320 and Embraer 170/190 family aircraft
slide13

New wide-bodied aircraft enable future growth in intercontinental traffic

  • In 2007-14 a fleet of maximum 15 Airbus A330/A340 aircraft
    • Boeing MD-11 fleet will be phased out by March 2010
  • In 2014-16 a fleet of maximum 15 new technology Airbus A350XWB aircraft
airlines going bust
Airlines going bust
  • Growth of demand declining
  • Passenger load factors down
  • Soaring fuel prices
  • More airlines facing uphill struggle to survive
  • Big airlines in a rush to go small – ”less is more”
  • Old inefficient aircraft grounded
  • Bankruptcies and mergers, more to come
  • Subsidies once again distort competition
ugly outlook for the industry
Ugly outlook for the industry

With fuel prices almost double what they were a year ago, airlines have switched strategies from expansion to downsizing.

The New York Times 6.6.2008

Already suffering, U.S. airlines have raised fares, added fees and surcharges, cut jobs and reduced services to cope with oil prices and the slowdown.Reuters 2.6.2008

Ryanair warned on Tuesday that its operating profits would be wiped out this year, if the crude oil price remained at around $130 a barrel.Financial Times 3.6.2008

United Airlines plans to ground more than a fifth of its fleet, slash its domestic capacity by as much as 18 per cent by the end of next year and cut as many as 1,600 jobs in the latest sign of the crisis gripping the US airline industry amid record oil prices and a slowing economy.Financial Times 4.6.2008

size does not matter only the fittest will survive
Size does not matter –Only the fittest will survive

Survivers are airlines with

- New fuel efficient fleet

- Fuel hedging

- Healthy financial position

- Good strategy

- Patient ownership

- Happy customers

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