New routes key to Finnair Asian revenue target

PUBLISHED : Monday, 02 September, 2013, 12:00am
UPDATED : Monday, 02 September, 2013, 4:28am

Finland's flagship airline, Finnair, plans to add a destination in Asia every year to its flight schedule in an ambitious bid to double its revenue from Europe-Asia traffic by 2020, a senior executive said.

The airline's chief operations officer, Ville Iho, said the company was considering adding Chinese destinations as part of the plan but refused to disclose which.

Speaking to reporters touring Finland on a trip organised by the country's foreign ministry, Iho said the focus on Asia made sense given the maturity of the European market.

"If we compare our progress and also future plans in Europe and Asia, there are not many new destinations that we will open in Europe. We will most probably increase aircraft size so that we can have more volume," he said. "In Asia, we will go with basically opening one new destination per year.

"The key message is that 80 to 90 per cent of growth will come from Asia."

Finnair already generates about half its revenue from Asian routes, as measured by revenue passenger kilometres - a key metric for airlines that represents the number of kilometres flown multiplied by the number of passengers carried.

That compares with about 40 per cent from European routes and about 5 per cent from north Atlantic traffic, according to official data for the first seven months of the year.

"One destination per year [in Asia] is sort of an optimal base for us. It allows us enough time to develop the market and do proper planning. And with that base, we will hit the target of doubling Asian revenue by 2020," Iho said.

The airline flies to 13 Asian destinations including Hong Kong, Beijing, Singapore and Tokyo.

"Japan is our biggest market in Asia. China is number two. Of course, China is growing and Japan is more or less saturated," Iho said.

Finnair's head of network control and flight planning, Janne Tarvainen, said every day about 7,000 Chinese citizens were getting on a plane for the first time, providing huge potential for airlines.

Iho said Finnair was seeking to capitalise on Finland's geography to attract more Asian travellers and to maximise the efficiency of the company's fleet.

Helsinki, the country's capital, is closer to Asia than many competing European air hubs, allowing shorter flight time and short connecting journeys to final destinations.