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Finnair says it will have to axe 500 staff as it revealed ”horrible” May figures showing a precipitous drop in load factor.
The Helsinki carrier reported a disastrous May load factor of 62.4% down a massive eight points and has entered into urgent negotiations with its unions to find a way to stem the losses.
Much of the fall is attributed to a significant drop in traffic to China, which has been dealt a triple hammer blow this year of the devastating recent earthquake, extreme winter weather and severe political unrest in Tibet.
A Finnair spokesman in Helsinki told ABTN: ”This was unexpected of course and we estimated a lot better load factor but this was down to Chinese demand ” the earthquake has made our situation more challenging.”
Asia and China in particular, have formed the bedrock of Finnair”s strategy for the past couple of years, but despite the undoubted fillip of the upcoming Olympics, Chinese demand has come under enormous pressure especially with oil hovering around the $130 per barrel mark.
The airline says that its fuel bill will grow between ”160m and ”180m in 2008 compared to last year, leading to the 500 job losses that will start with temporary staff.
”To ensure the company”s growth strategy, we need additional cuts of at least ”50m per year and we have begun discussions with our personnel to map out savings targets,” said Finnair senior vice president human resources Anssi Komulainen.
Finnair insists that its organised labour is on side noting that ”the unions understand the whole industry is in an oil crisis,” but that it will not change its Asian strategy that now sees the carrier operate 11 services from Helsinki.