The President and CEO of Finnair Pekka Vauramo has ruled out joining International Airline Group (IAG) “in the near future”.
Speaking just before the carrier unveiled losses of €19.6 million in the three months between April and June, compared to a profit of €7.5 million for the same quarter in 2013.
Vauramo said that although the debate about whether to join IAG is “ongoing”, the ownership structure of Finnair needed to be considered.
“Finnair is a 56 per cent government-owned business. According to Finnish law the majority ownership needs to remain with the Finnish government unless the Finnish Parliament decides differently,” Vauramo said. “The debate is ongoing, but it needs to lead to a decision before anything can move on, so it’s a little too early to start thinking about that.”
A spokesperson for Finnair said: “The two steps are that Parliament would have to change the legislation and then the government owner would need to make decisions about whether they wanted to decrease their ownership.”
The debate has stepped up in the past few years, firstly because of the recent losses, but also because of the success of Finnair in its join business across the Atlantic with British Airways, American Airlines and US Airways and with Japan Airlines on the route down to Tokyo.
Vauramo said: “We don’t yet have the final set of numbers out of that contribution and it’s too early to comment on how it’s going. But when we look at passenger numbers we’ve done very well and operationally things are proceeding smoothly.”
Vauramo would not comment on the likelihood of the joint business expanding to take in other Asia routes beyond Tokyo. “I think we’ll take a little bit of time to see what the experience is before we expand. Already a big part of our business is in these two bits. So far it’s been a good strong start with the Atlantic and soon we will know how the Asia ones perform.”
Vauramo also confirmed that it was hoped that the new A350 which Finnair will bring into its fleet in 2015 will help make the focus on Asia profitable.
“Half of the fuel we use is burnt on Asian flights and the A350 cuts the cost by 25-30% off that fuel bill,” he said. “Nevertheless, for travellers, the A350 flights will be priced at a premium to existing services.
“We will price our product according to market. And if we have a superior product and superior offering we will price it accordingly.”