Reuters has reported Finnair (Finland’s national carrier) is actively seeking a suitor to help it improve it fiscal performance. Over the last 4 years, the oneworld alliance member has lost approximately 250 million Euro.
According to Finnair’s Chief Mika Vehvilainen Finnair has several potential partners that they may lead to some sort of deal. Finnair would like to see a deal announced this summer, and implemented in the first half of 2013. The article suggests that Air Berlin may be one of the potential candidates.
It appears that European aviation is going to have a considerably different look within the next few years. With prices of fuel skyrocketing, and competition from low cost carriers only increasing European based major carriers may become a rare breed. We’ve already seen BMI acquired by IAG (British Airways and Iberia parent), Austrian is being drastically reorganized and Turkish has made it no secret that it wants Poland’s LOT. Who’s going to be left?!?
Here Is Reuters’ Article With Additional Information:
Finland’s troubled flag carrier Finnair wants to find a European partner by summer to help stem its losses on short-haul routes and is not ruling out a pact with Air Berlin, its chief executive said.
Finnair is seeking a cheaper way to feed passengers to its Helsinki hub from where it operates profitable routes to Asian destinations such as Japan, China, and Singapore.
Mika Vehvilainen does not see a conflict in a possible partnership with Air Berlin, although Abu Dhabi-based Etihad Airways owns nearly 30 percent of the company. Air Berlin flies passengers from Europe to connect with Etihad’s Asian flights from Abu Dhabi.
“The products are very different. Helsinki offers much better connectivity and faster connections,” Vehvilainen said.
He also said there were “more than a few, but less than ten” other possible partners, but declined to specify.
“We are talking to a number of companies and we are aiming to have something potentially in place by summer in terms of a letter of intent or something along those lines and aiming to start the operations in the first half of 2013.”
In the past four years Finnair has reported net losses of around EUR€250 million (USD$327 million) in total. The economic downturn, low-cost competitors and high fuel prices have eroded profits of many national carriers around the world.
Vehvilainen, who stepped in just over two years ago, was unwilling to predict when investors could expect profits.
“We haven’t set any particular target on that one. We are working very hard on our costs and also driving the top line.”
Finnair’s first quarter results are due on April 27.
Vehvilainen is currently being investigated by police over the sale of his Helsinki apartment to pension insurance firm Ilmarinen, which rented it back to Finnair while he remained living there.
Ilmarinen is a Finnair shareholder. The Finnish government owns 55.8 percent of the company.
(Reuters)
