Routes revival

posted on 24th August 2020
Routes revival

As Finnair’s long-haul aircraft return to the skies, the airline is keen to continue focusing on its Asian strategy

There was a time, just a few months ago, when the reintroduction of a well-established but suspended airline route would garner little press attention.

But as the world still struggles to come to terms with the Covid-19 pandemic, each return to service feels like a small step back to a version of normality that everyone in the industry should applaud.

This is certainly the case with Finnair which, at the time of writing at the beginning of August, had just announced the reintroduction of its Helsinki-Shanghai service on July 23, albeit on a weekly basis compared to daily pre-Covid-19.

The resumed route joins a thrice-weekly Hong Kong service, relaunched in July, while connections to Seoul and Tokyo have both been operating three times a week, having previously operated on a daily basis and 14 times a week respectively.

Finnair vice president global sales Mikko Turtiainen tells ARGS in an interview at the beginning of July that the resumed routes reflect the start of a return to its pre-Covid-19 strategy of connecting Asia to much of Europe via its Helsinki hub.

He adds: “The strategy is still there but we have said very openly it will take two or three years to get back to those 2019 levels. Right now it goes hand in hand with how countries open up their borders.

“China is still very much a key market for Finnair … and we’re very hopeful that Finnair will be able to open up mainland China.”

Even if the strategy remains the same, Turtiainen adds the rules of reintroducing a long-haul route have changed considerably. Whereas previously he would have eight to nine months minimum to market and sell a new route, this has been cut to less than a month while a mothballed aircraft can be returned to service in as little as a day.

Service resumption
Turtiainen says while the reintroduction of the long-haul routes is important, it is part of a wider strategy to resume as much as 70 per cent of the airline’s originally planned services by the end of the winter.

This would be a considerable achievement after the airline was left flying less than 5 per cent of its originally planned services in the second quarter of 2020 with just a couple of domestic and European city connections still live, while long-haul flights were completely wiped out, barring some limited repatriation services.

Turtiainen believes much of this was driven by the airline’s decision to get on with the required work as soon as possible.

He says: “It was pretty early that we started thinking about when the ramp-up starts and what kind of network Finnair has as the ramp-up doesn’t happen in a day. A lot of work went into thinking about which cities, which destinations and which origins and destinations (O&Ds) were important.”
Turtiainen says by mid-May the airline published its schedule covering July, featuring about 25 per cent of the budgeted network, until the end of March 2021, when as many as 70 per cent of previously planned flights should have returned.

He is also determined that Finnair will now stick to its committed flights, a measure he believes is vital to help drive consumer trust and so help reinvigorate the market.

“Finnair took a very transparent and open approach in regards to how we wanted to bring our network back,” Turtiainen says. “We really wanted to publish what we intended to fly and not do any late cancelling (of flights).”

Surprise packages
He also believes that there is enough pent-up demand in the market to fill the aircraft, particularly having seen firsthand the response to trips sold via the airline’s tour operator subsidiary Suntours.

Having launched in May package holidays for Greece with departures from August, he says within two to three weeks the holidays were 80 per cent sold for not only August, but September and October as well.

Turtiainen adds: “Now in the past few weeks we’ve added capacity especially to Greece where we doubled the number of seats and capacity to Rhodes. We’ve also started sales to Crete earlier by a couple of weeks.

“The Finnish consumer is buying package holidays for August, September and October from mid-July onward; it does bring confidence that there is a segment that still desires to travel.”
Importantly, Turtiainen argues that the demand has been driven not by slashing prices but by a simple desire in the market to jet away overseas following a spring where the world was largely locked down as Covid-19 spread globally.

He says: “We need to have demand for the airline to survive and we need to have the right price points to make that demand financially sustainable.

“During Q2 we made €2 million losses a day and going forward we need to find the equation that will put us in a flight-positive mode financially.

“Craziness in the long run will not work. There is a huge cost element in regards to flying an aircraft from point A to point B. In these times everyone really has the microscope (focused) on the cost element.

“If you’re not making those flights cash positive then there will be a lesson around the corner.”

Nor is Finnair’s focus purely on resuming established routes. Turtiainen says two new routes originally planned for launch this year remain under consideration at head office.

A flight to South Korea’s Busan was planned for a summer launch but has been delayed, and a decision on its new start will be made in September. Meanwhile, the postponement of a new route to Tokyo’s Haneda airport should only be until Q4 of this year.

Of course, each new route, and the reinstated old ones, are but small steps in a resumption of the global industry that has been utterly decimated by Covid-19 and which still faces severe repercussions as a result.

But if even the longest journey starts with a few small steps, it is good to see Finnair beginning to take them.