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Finnair Overhauling Strategy as it Comes to Terms With Protracted Russian Airspace Closure

Finnair Overhauling Strategy as it Comes to Terms With Protracted Russian Airspace Closure

The national flag carrier of Finland is preparing a broad overhaul of its entire business strategy as it prepares for a protracted closure of Russian airspace and continuing pandemic restrictions in its core Asian long-haul markets.

For years, Finnair positioned itself as the European airline with the fastest flight times to Asia. That strategy was upended by strict pandemic travel restrictions across Asia and the closure of Russian airspace to Finnish jets threatens a final death blow.

Finnair Transferring Dehli-Based Crew to OSM Aviation - Now Accepting Applications
Photo Credit: Airbus

“Finnair is facing the impacts of the Ukrainian war as a company weakened by the pandemic,” warned chief executive Topi Manner. “Due to these two crises, our operating result will be heavily negative for the third consecutive year”.

“We are preparing for the Russian airspace to remain closed for a long time. In addition, the fuel price is historically high, and our competitive environment has changed,” Manner continued.

The embattled CEO said the airline was now actively working on a “thorough strategy renewal” which should be complete by the autumn.

In the meantime, Finnair is leasing out spare aircraft and crew to other airlines including British Airways for the summer season. The airline appears to be shifting its focus on the United States and short-haul routes across Europe where pandemic restrictions have been lifted and demand has bounced back.

From its base high up north in Helsinki, Finnair was previously able to link Europe with Asia with the shortest flight length but to do so, the airline flew a large chunk of these flights through Russian airspace.

The Ukraine war saw Russia close its airspace to Finnish aircraft and as a result, flight times have been extended by several hours. Not only has Finnair lost its competitive advantage but the rising price of aviation fuel has added even more pressure on the airline’s finances.

The result is that Finnair expects to make a third year of huge losses just as many of its competitors across Europe predict a return to profitability in 2022.

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