Hienonen leaves as airline posts €56.9m loss
Jukka Hienonen has resigned as president and ceo of struggling airline Finnair.
The announcement today (August 7) comes as Finnair reported a €56.9m operating loss in a "clearly loss-making" second quarter.
Finnair has struggled with falling demand across its network with little respite in the three months to June 30.
Mr Hienonen said in his resignation statement: "My four years in Finnair's service has included both periods of success as well as the increasingly adverse development of the entire sector, and now a clear change of course is required.
"I am not satisfied with the results achieved; the rate of change has been insufficient.
"Many structures as well as the company's culture have been formed in totally different conditions.
"With these we cannot do well in the present competitive environment, but changing them has proved to be extremely difficult."
He will stand down in six months.
Finnair's directors said they regretted Mr Hienonen's decision which was entirely his own.
Finnair's turnover fell by 10% year-on-year in the first quarter and by 21.6% in the second to €427.4m, compared with €545.2m in 2008.
Passenger traffic fell 8.5% year-on-year but with an 11.5% cut in capacity, there was a 2.5% growth in load factor.
Commenting on the results, Mr Hienonen said the airline had suffered from a collapse in fares caused by the decline in air travel.
He said turnover had been hit by "reduced demand and weaker price levels."
Yesterday Finnair announced it had reached an agreement with its technical services resulting in around €14m in staff savings.
The agreement is part of two cost cutting plans announced earlier this year to make savings of €200m.
The measures include the laying-off of around 6,000 staff including 700 pilots. A further 600 staff have already been made redundant.
Finnair has been in talks over further cuts with unions representing cabin crew, ground staff and employees in other non-flight operations.
Mr Hienonen said some "personnel organisations" had shown "no willingness to adapt."
But yesterday's "stabilisation agreement" involved five different staff organisations representing 1,600 employees.
The agreement includes various "flexibilities relating to working practices and working hours" including a performance-related bonus model.