Airline Weekly

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Finnair Sees Opportunity in Norwegian’s Woes

Madhu Unnikrishnan
February 22nd, 2021 at 2:21 PM EST

Photo credit:  Finnair

Finnair may be one of the few airlines in the world that could see its home market expand when the pandemic recedes. The carrier’s Nordic competition is receding, leaving it in a good place to swoop in and grab market share when travel resumes.

Its main competition in the region, Norwegian Air, is drastically scaling back its operations. As part of the restructuring plan it hammered out with its home government, Norwegian will go from a 140-aircraft fleet to about 50 aircraft, all narrowbodies. It’s giving up its intercontinental ambitions and will operate a shorthaul network.

Norwegian will focus its operations from its bases in Oslo and Copenhagen and will scale back its Helsinki base. “We know they have been closing it,” Finnair CEO Topi Manner said. This will leave a hole in the market that Finnair thinks it can fill.

Rival SAS, based in Copenhagen, also is retrenching and has dramatically scaled back its operations. “We think there are 3 million passengers up for grabs in the Finnish market,” Manner said.

All this is in the future, though. Finnair flew only 8 percent of its 2019 traffic in the fourth quarter of last year. Its international network has ground to a halt. Domestic routes in Finland, particularly to Lapland, are showing some signs of life, he said.

Before the pandemic struck, Finnair, thanks to Finland’s geographic position, ran a tidy business connecting Europe with Asia. That business has more or less vanished now, at least for passengers. Finnair continues to operate flights to Tokyo, Shanghai, Hong Kong, Singapore, Seoul, and Bangkok. These flights are virtually empty, though, and are essentially cargo flights that carry some passenger, Manner said.

As with many airlines now, cargo is a rare bright spot. Although most cargo flows are Asia-Europe, Finnair has seen demand from Asia rise for fish from the Nordics. The carrier also has been carrying more machinery and spare parts than it would normally. Shipping has become congested, forcing companies to turn to air cargo for goods that normally would go by sea, despite the cost, Manner said.

The bankruptcy of the HNA group and its airlines’ downsizing could create more opportunities for Finnair in the China market, but Manner believes Chinese carriers will more quickly step in to fill any absence left by HNA.

Most of Finnair’s staff has been furloughed, and the carrier is negotiating another €400 million ($487 million) in loans from the Finnish government. Fourth-quarter 2020 revenues fell by 87 percent to €102 million.


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