Finnair looks eastward to escape losses

Finnair Oyj is pinning its hopes on the Asian market after four years of losses.

The airline aims to double its flights to Asia by 2020 from the current frequency of 74 per week, said Mika Vehvilainen, CEO of Finnair.

The route linking Chongqing in Southwest China and Helsinki will be the next flight to be launched, with the service starting in May.

Disruptions caused by volcanic ash from Iceland, as well as the impact of European economic problems, kept Finnair in the red from 2008 to 2011.

According to the airline's financial report, it lost 87.5 million euros ($115.2 million) in 2011. However, the Asian market has assumed a more important role for the carrier, as the market supplied 50 percent of its total passenger volume in 2011.

Finnair, which holds the fifth-largest market share on Asia-Europe routes, aims to become one of the top three carriers linking the two continents, Vehvilainen said.

One of Finnair's advantages is that the carrier offers the shortest route between Europe and Asia via Helsinki, he added.

"We will seek more opportunities in Asia, since overall aviation traffic between Europe and Asia grows by 6 to 10 percent per year," Vehvilainen said.

The company believes that Asian economic growth, particularly in China, will drive more traffic between the two continents, he added.

However, compared with other areas in Asia, Finnair is more interested in China. Vehvilainen also said he is not "very excited" about the Indian market, in comparison with China.

"China will continue to increase in importance for Finnair, and we continue to invest in our operations and customers in China," he said.

Many international airlines, not just Finnair, are turning their attention to China's second- or third-tier cities, because airports in big cities, including Beijing and Shanghai, are too busy to accommodate more planes.

Chongqing is becoming popular among international carriers because of a policy that took effect there this year, under which airlines can obtain jet fuel at prices of as much as 23 percent below usual levels.

The city's fast-growing economy and huge population of 31 million have also made it a new destination for several international carriers.

As many as 13 international routes from Chongqing were opened in 2011, according to xinhuanet.com.

However, international flights serving the city are still far from profitable.

"At the beginning, for at least three years, Finnair doesn't expect to make profits from the scheduled route from Chongqing to Helsinki," said Mikko Rautio, Finnair's chief representative in China.

However, to benefit from opportunities, airlines must be present even before a market becomes profitable, Rautio said.

"After the market is mature, too many players will rush there and it will get difficult to enter, like (it currently is in) Beijing and Shanghai," Rautio said

The scheduled Chongqing flight is one step of Finnair's development strategy in China and the carrier is considering other cities in China's central and western regions.

"Xi'an and Wuhan are both candidate destinations in China," Rautio said.

He said Finnair is focusing on China's western areas because of the government's plan to develop the region.

Including local cabin crew members on the Asian routes is another way Finnair is adopting to please its Asian passengers.

Chinese attendants for the Chongqing route are being trained at the Finnair Flight Academy in Helsinki.

Chen Niao from Chongqing is one of them and she said she was extensively exposed to flight safety information, emergency management, customer service and the standard rules of Finnair during the training.

"I feel excited and proud to be one of the attendants. The new route will greatly boost tourism and cooperation."

Contact the writers at wangwen@chinadaily.com.cn and sunyq@chinadaily.com.cn