Airline to save €70m in staff costs
Finnair has today (June 5) announced plans to save a further €100m, mostly in staff costs, as its turnover continues to suffer this year.
Of the €100m target, €70m will be "aimed at staff costs" to begin next year. Finnair said its turnover had fallen 15%, blaming a drop in scheduled traffic and lower ticket prices.
"We have to adjust our costs in line with the fall in turnover. Unit costs must adapt in line with the decrease in unit revenues," Finnair's deputy ceo Lasse Heinonen said.
"Our biggest cost item is staff costs, which represent about a quarter of all our expenditures and that is why savings targets must concentrate in that direction.
"Previously completed savings measures are not sufficient."
The new measures are in addition to an earlier €100m plan announced in March, which will result in around 6,000 temporary, unpaid lay-offs, including 700 pilots (see ABTN news March 13).
It is unclear whether the latest announcement will result in redundancies. Mr Heinonen said it was working with labour unions to "adapt workforce expenditure in these difficult times."
Finnair reported a sharp decline in business class traffic in April, resulting in a 5.7% drop in overall volume. The struggling airline said it had cut capacity on European routes by 11.8% in response to falling demand (see ABTN news May 7).
Finnair recently predicted it would suffer a full-year loss after witnessing a 10% decline in turnover to €515.7m in the first quarter of the year (see ABTN news April 28).