Finnair’s decision to partner with Juneyao Airlines, a Shanghai-based carrier, at the peak of the coronavirus might have raised some questions. However, Finnair has made it clear that it will maintain its long-term goals as long as financially feasible. So, what is Finnair’s strategy? Let’s find out.
Long term planning vs short term finances
Much like the rest of the industry, Finnair is currently struggling financially. The airline is burning through €2 million a day and is considering deep cuts to its workforce. While it has been able to avoid the drastic measures being taken by its neighboring airlines, SAS and Norwegian, the airline remains in a tough spot.
In this current climate, Finnair’s decision to partner with Juneyao came under the spotlight. Flight traffic between Europe and Asia is down to a fraction of the previous levels, owing to border controls and lack of demand, so why is Finnair looking to expand its presence in the region? The answer is long-term sustainability.
Finnair sees routes between Europe and Asia as those with natural demand, which will continue to rise. To capitalize on this rising demand, the airline is planning for the future by partnering with airlines such as Juneyao and increasing capacity on Asian routes.
China to be a core market
Another reason Finnair has decided to Juneyao is the importance of China in the airline’s plans. According to President and CEO Topi Manner, speaking at a webinar hosted by Future Travel Experience,
“China will remain core for us and Asia will remain important for us. We’ve been building our presence in China for 30 years and we want to continue to build our presence in China for the next 30 years. Therefore, these kinds of partnerships are a way for us to seek scale beyond our size, so we have high hopes for the partnership with Juneyao”.
When looking at Finnair’s long-term ambitions for China, it makes sense why the airline has partnered with Juneyao now. By being one of the few airlines expanding its presence in China, as others pull out, Finnair could be the first to benefit when traffic from Asia returns. The airline is already planning to increase capacity on Asian routes, as demand slowly returns.
Mutually beneficial partnership
The partnership between Finnair and Juneyao will be beneficial to both airlines. Juneyao was all set to launch three new routes to Europe, including fifth freedom ones, in March but was forced to delay these plans. A deeper partnership with Finnair will allow the airline to continue expanding within Europe once demand returns. While Shanghai-based Juneyao may not be as popular as other mainland carriers, it is definitely a fast-growing airline with a fleet of 787s and A320s.
Finnair is also a member of the oneworld alliance, which does give it access to many Asian cities through partner Cathay Pacific. However, the lack of a mainland Chinese airline means access to China remains limited. The partnership with Juneyao will allow the airline to continue growing in one of its core markets, at a time when others aren’t planning to do so.
What do you think about Finnair’s plans? Let us know in the comments below.