Finnair hard hit by Russian airspace closure bounces back

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Finnair, which will celebrate its 100th anniversary at the end of 2023, has been hit hard by the closure of Russian airspace – its rapid access to Asia – but it is fighting back.

The airline with a fleet of 80 planes and nearly 15 million passengers a year carried pre-pandemic looks back on a proud history, but this year lost its unique market niche almost overnight, having built it up to perfection for nearly four decades.

The airline launched the first nonstop flight from Western Europe to East Asia in 1983. At the time, it was not allowed to use Soviet airspace, but due to the Helsinki location in far northeast Europe, a modified DC-10 -30ER with extra fuel tanks was able to do the trick and reach Tokyo in 13 hours via the North Pole.

A big plus at a time when almost all passenger flights from Europe and North America to Japan had to make a refueling stop in Anchorage, Alaska. This stretched the elapsed travel time to 16 hours.

In 1994, Finnair was able to enter Russian airspace after a few minutes flight east of Helsinki and reached Tokyo on this shortened route in just around nine hours.

Finnair and Helsinki Airport have evolved their business model to perfection, adapting everything to the speed of transfers and the needs of Asian passengers. No other airport in Europe displays signage in terminal transfer areas in more Mandarin, Korean, Japanese and Russian English. The airport has just completed an ambitious expansion program spanning a decade and costing around one billion euros.

Airport signs in five languages

The whole concept fell apart in February 2022 when Russia invaded Ukraine and the country closed its airspace to all airlines based in the European Union a few days later, while Chinese carriers , Indians, Arabs or Turks continue to take advantage of these precious shortcuts over Russia.

“Finland is the most affected country in the world by the closure of Russian airspace due to its geography, it is certainly a big problem, you cannot deny it. No other airport has been hit harder affected than Helsinki,” admits airport manager Ulla Lettijeff in an interview with Airlineratings.com.

“We have to fight and generate as much revenue as possible and somehow fill the void created by war and the pandemic.”

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On February 26, 2022, the good times for Finnair seemingly came to an abrupt end. It was the last time flight AY073 from Helsinki to Tokyo could take its usual route over Russia. Now it flies on a new route to Tokyo, which is actually the old one from the 1980s via the North Pole. Instead of 7,900 km, the distance the Airbus A350 must fly is now almost 13,000 km, requiring more than 13 hours of flight and consuming more than 40% or 20 tonnes more fuel.

As a small consolation for passengers, Finnair has once again rolled out its famous North Pole certificate, commemorating the flight over the northernmost point in the world. The route to Tokyo is the only connection through the pole, while return flights bypass Russian territory to the south via Korea, China, Kazakhstan and Uzbekistan to Europe.

North Pole Certificate

“Our geographical advantage is gone, we are preparing for the situation where Russian airspace will be closed for a long, long time, so in our new strategy we are adapting to this reality,” Finnair CEO Topi said. Manner, to Airlineratings.com in an exclusive interview.

A major problem for Finnair is that China is still closed to normal air traffic, which was once the carrier’s second largest Asian market after Japan, the two countries alone supplied Finnair with nearly a million passengers a year before the pandemic.

Between 2010 and 2018 alone, traffic to Asia had doubled, more than 20 destinations were served from Helsinki, including six cities in China and four in Japan, and nearly a hundred flights per week to the Far East, then generating half of Finnair’s revenues. .

But its CEO does not want to give up this most lucrative market: “Do not neglect Asia, Asia will always be very important for Finnair”, he insists.

While secondary cities such as Nanjing, Sapporo or Osaka will no longer be served, Finnair is competing to maintain its presence in Tokyo (moving from Narita to Haneda airport, saving time for passengers on the ground), Seoul, Singapore, Bangkok and Phuket.

“Once China opens up, and we believe it will, we have a good chance of flying profitably to Shanghai and Beijing, even with Russian airspace closed,” Manner says.

In addition, Hong Kong and Guangzhou will be served again, as well as Delhi and Mumbai. “To provide connectivity from India to the United States via Helsinki, India will be one of our growth markets, and the Middle East is another example,” Manner points out. “The number of Asian destinations will decline more than their revenue share. As yields increase and once China opens up, Asia can still provide up to 30% of our income, compared to only 20-25% after the invasion.

A cornerstone of Finnair’s new strategy for adapting to a new world is close cooperation with its Oneworld alliance partner, Qatar Airways. “The geography is changing due to the Russian invasion, and as a result of this changed geography, we need to change our strategy to establish a more geographically balanced network. It also means that the importance of Doha as a hub between the ‘East and West is increasing’, emphasizes the CEO.

“We will operate daily Airbus A330 services from four cities in Europe to Doha from November and December, Helsinki, Stockholm and Copenhagen, plus a fourth to be announced. We are confident that these flights will be profitable for us, in total there will be 28 flights a week during the northern winter, roughly the same number of flights we had in China before the pandemic,” says Manner.

As a geographic counterweight, Finnair also introduced a new US hub service: “We opened Dallas/Fort Worth as a new year-round destination to connect to the American Airlines hub, it started well. Our US flights were 90% full in July and the majority of customers started their journey from the US,” reports Manner.

While other major airlines have repeatedly denounced the importance of alliances in recent years, for Finnair, its affiliation has become a savior: “We are benefiting quite a bit from the Oneworld alliance, I would say more than before. the pandemic,” he said.

And only with such capable partners at hand as its fellow Oneworld carriers giving Finnair a fresh perspective can it affirm “we are and will continue to be a network airline”, while considering even to become profitable again from 2024.

The Finns are certainly not sacrificing their once lucrative business to the brutal airs of their neighboring giant, Russia.

Finnair growth Asia
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