Finnair negotiating possible partnership with major Indian airlines

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Thursday, May 15, 2008

A Finnair MD-11 decorated with Moomin characters. The airlines intends to phase the aircraft out in favour of more fuel-efficient airliners.

Finnish air carrier Finnair has entered talks with major Indian airlines concerning a possible partnership deal to feed Finnair's international operations with domestic connecting flights, said president and CEO Jukka Hienonen.

“We are in partnership talks with the leading airlines of India. We need this in the long run. This would simply make our connections locally better and it would also help in timetable coordination with the connecting flights... People would not fly to only where we fly. They would like to fly to other destinations as well, within India. So we would need a local partner to cooperate,” said Hienonen, who refused to name any of the airlines involved.

Finnair launched services to India in 2006 and will soon step up to thirteen flights a week there, with daily flights from New Delhi and six-days-a-week from Mumbai. There are plans to also fly from Bangalore or Chennai within two to three years.

Finnair is a member of Oneworld Alliance, which is the world's third-largest airline alliance and includes members such as British Airways, American Airlines, Qantas and Japan Airlines and other major international airlines. Hienonen explained that he wished the alliance to include an Indian airline, saying "I have also been urging the board of Oneworld that we should have an Indian partner as well. That is also in the process at the moment. So ideally, we may partner the same airline.”

The airline has seen rapid sales growth since beginning services in India. Finnair believes that there is significant potential to serve business travellers due to good commercial links between the countries. Around 70 major Finnish companies including mobile phone manufacturer Nokia and engineering giant KONE have plans for large-scale expansion in India and employ as many as 11,000 Indians, while Infosys, Sasken and Wipro and other large Indian software companies are set to begin operations in Finland.

Also discussed were related fleet modernisation plans. "By the first quarter of 2010, we would be phasing out all our Boeing MD-11s [the MD-11 is sometime considered a Boeing after the company bought out McDonnell Douglas] and they would be replaced by Airbus A340s and A330s... Airbus 330s are best for shorter routes. We will have five of them by the first half of next year and they will be primarily for the Indian traffic," stated Hienonen, explaining that the older airliners have greater fuel consumptions. High fuel costs have caused a number of airline shutdowns in recent years.

Finnair, currently in its 85th year, is one of the world's oldest airlines still conducting operations. The company flew 8.6 million passengers in 2007, 1.2 million of whom were on the airline's Asian routes. Last year saw a two billion Euro turnover, and the firm employs 9,500 people worldwide.