Further job losses "not ruled out"
Finnair is to launch a cost cutting programme of "similar magnitude" to a previous €50m plan which resulted in 120 jobs losses.
In its annual report released yesterday (March 12), Finnair said half the amount saved came from staff cuts alone.
It told shareholders "weakening profitability" and continuing capacity cuts across its network required a new programme "as soon as possible."
Christer Haglund, Finnair's senior vp corporate communications, told ABTN more job losses were "certainly not ruled out" as part of the new programme.
But Mr Haglund confirmed Finnair was "actively" exploring other ways to save money.
3,000 employees will be laid-off this year as part of Finnair's first programme, with the majority out of work for two to three weeks.
In a stock exchange announcement issued today, Finnair said 700 pilots will be laid-off for at least one week as a result of changes in flight scheduling.
Finnair also plans to place its entire shop and catering staff on "temporary unpaid leave" for between two weeks and three months.
Kristina Inkiläinen, managing director of Finnair Catering Oy, said sales had fallen significantly and predicted further weakening.
In February, Finnair reported a post-tax operating loss of €52m in 2008, down from a €142m profit the year before.
It said profitability "clearly fell" from the previous year despite strong volume growth and prices increases had adversely affected passenger load.
The airline also blamed record fuel prices and a fall in business travel. It said a shift to cheaper price classes had undermined average ticket yield.
An equity value of €458.7m has prompted Finnair's board to propose that no dividend be distributed for 2008.
Finnair said the outlook for 2009 was "extremely challenging" with fuel hedging reducing any savings from falling oil prices.
The airline said it hopes to achieve long term growth of its Asian market through extra capacity and increased cooperation, despite a 3% decline in traffic in 2008.