Finnair Seeks Mergers, Asia Ally to Swell Emirates-Style Hub
Baku, November 14 (AZERTAC). Finnair Oyj (FIA1S), building Helsinki into a hub offering the shortest flights from Europe to northeast Asia, said it`s seeking a partner with which to operate the services while pursuing local takeovers to boost Nordic traffic.
Finnair is keen on an Asian accord with antitrust immunity that would permit joint sales and revenue sharing, similar to ventures between European and U.S. carriers across the Atlantic, Chief Executive Officer Mika Vehvilaeinen said in an interview.
“We`d welcome further cooperation,” Vehvilaeinen said in London. “One of the best markets this year has been the North Atlantic, and I don`t think that`s entirely separate from the fact that they have a bit more control on capacity and demand.”
Finnair already operates 74 Asian flights a week and aims to double the number by 2020, exploiting Helsinki`s position on the quickest “Great Circle” routes to China, Japan and Korea. Vehvilaeinen said he`s also keen to consolidate short-haul operations closer to home, squeezing Nordic rival SAS Group by building on the July takeover of Finnish Commuter Airlines Oy.
The CEO is right to focus on immunized joint ventures as providing benefits beyond those accruing from basic membership of a global alliance, said independent analyst Chris Tarry.
“In a multilateral alliance you wear the badge and sit at the table, but that costs money and you need to get the benefit out through individual bilateral relationships or ventures,” he said. “You want to provide long-haul work -- where the value is -- and look to your partner for traffic at your destinations.”
Finnair was trading 1.1 percent lower at 2.80 euros as of 10:53 a.m. in Helsinki today, taking the stock`s decline this year to 44 percent and valuing the company at 359 million euros.
Finnair has boosted sales to Asian corporate customers by 50 percent this year after doubling them in 2010, Vehvilaeinen said. Passenger numbers rose 14 percent to 1.22 million in the first 10 months, seven times the total on trans-Atlantic trips.
The carrier, which is almost 56 percent owned by the Finnish government, serves 11 cities in the Asia-Pacific region, including three in Japan and three in China, where it will add flights to Chongqing on the Yangtze River next May.
Revenue from Asian routes should double to about 2 billion euros ($2.7 billion) by the decade`s end, according to Finnair`s strategy, which parallels that of Gulf carriers Emirates, Etihad and Qatar Airways in aiming to build an airport with a tiny home market into hub where long-distance travelers change planes.
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