Finnair turns to Qatar amid network reorganization
It’s hard to watch your business model get shaken by events beyond your control. This is what has happened to Finnair over the past two years, first came the COVID-19 pandemic and the prolonged shutdown of the airline’s core markets in Asia. So far, with most of the world on track to reach pre-pandemic traffic levels, China, Hong Kong and other destinations in the region have yet to fully open, then in February, the Russian invasion of Ukraine led the European Union and Russia to close each other’s airspace. This deprived Finnair, largely overnight, of a major market nearby. Perhaps most importantly, Finnair has also lost its key element of market differentiation. Subscribe to TPG’s free biweekly aviation newsletter. Finnish and European Union flags wave outside Terminal 2 at Helsinki Airport. Alessandro Rampazo/AFP/GETTY IMAGES The traditional feature of Venere has been the convenient location of the Helsinki Airport (HEL) hub and the shortest route between Europe and Asia. At the moment when it became impossible to fly over Russia, this geographical location turned into a hindrance, adding salt to the wound, Finnair’s bet on opening a long-range secondary hub at Stockholm Arlanda Airport (ARN) failed to meet expectations. In August, the Finnish carrier announced that it would halt five long-haul routes it was operating from the Swedish capital to John F. Kennedy International Airport (JFK), Los Angeles International Airport (LAX), Miami International Airport (MIA), Suvarnabhumi Airport (BKK) and Phuket International (HKT), so it’s no wonder the Finnish carrier has been busy finding new uses for its long-range fleet. Currently, the fleet consists of eight A330-300 and 17 A350-900, and in addition to blanket leasing of some aircraft to Eurowings on a short-term basis, Finnair has also launched new routes to Dallas-Fort Worth International Airport (DFW) and Seattle-Tacoma International Airport ( SEA). Geographical reorientation becomes apparent when comparing the evolution of available capacity by region. In the first half of 2019, 49% of ASKs (available mileage) were allocated to Asia; In the same period this year, the figure fell to 24%. Conversely, America, which accounts for 10% of capacity, now accounts for 24%. The new flights to Qatar, however, were the only major new revealed last month, and Venere surprised everyone by announcing a close partnership with fellow Oneworld alliance partner Qatar Airways. The move will see Finnair fly daily to Hamad International Airport (DOH) in Doha, Qatar, from three different capitals in the north: Helsinki, Copenhagen and Stockholm. It seems likely that the airline will also announce flights from at least a fourth yet-to-be-disclosed European city soon, and the two airlines will share capacity and codeshare on those flights – which will be operated by the Finnish carrier, using their own metal. This will come in addition to the fact that Qatar Airways is already offering its own direct flights between Doha and the three northern European cities. In winter, timetables show Qatar Airways flights at least twice daily to Copenhagen, daily to Stockholm and three times weekly to Helsinki. Passengers will be able to enjoy Finnair’s new cabin on the Doha track. It is an innovative business class seat. Finnair is the inaugural customer and the carrier has plans to gradually roll it out across the entire long-distance fleet. These A330s also feature a recently introduced Finnair Premium Economy cabin and a refurbished Economy Class product; This is all part of a more than $200 million product update program announced last February. Since both companies are already members of the Oneworld alliance, not much will change when it comes to loyalty programs. Finnair Plus members already have access to status points and lounge access when traveling on Qatar Airways, and this is the first major tangible manifestation of the 2002 Open Skies Agreement, which was signed between the European Union and Qatar in October 2021. Finland, Denmark and Sweden are not among the exceptions. the treaty; Until 2024, this agreement will limit the number of flights permitted between the emirate and airports in Germany, France, Italy, Belgium and the Netherlands, thus providing the Fenner fleet with an easy and fast way to route European traffic to Qatar Airways’ extensive network. Through the DOH Center. (Despite this, communication options are very limited in reverse.) The home country government in the form of a loan of more than $400 million recorded an operating loss of more than $92 million in the first half of this year, so the overall picture is still far from beautiful. However, at a recent press conference, Finnair’s senior management shared some reasons for optimism. With revenue and load factors showing triple-digit increases (albeit from still unnatural last year’s levels) and drastically cutting costs, they expect the airline’s accounts to return to the black by 2024.