Finnair announces shake-up

Streamlined structure to save on costs 

Finnair has today (Aug 14) announced a wide-ranging organisational shake-up in the wake of recent financial losses and the resignation of its president and ceo.

From October the group's scheduled passenger traffic and leisure flight operations will be combined under a new integrated flight traffic organisation.

The combined organisation will operate directly under Finnair's president and ceo, the airline said.

Finnair said the shake-up would result in greater cooperation between flight operations and the group's administration.

"We will purposefully continue to enhance our operational efficiency," Finnair's deputy ceo Lasse Heinonen said.

"Particularly by combining scheduled passenger and leisure traffic we will centralise our most important resources, fleet and personnel.

"The reorganisation of operations will also clarify areas of responsibility and generate cost savings."

Finnair's business activities will be divided into five "operational entities" such as commercial operations and aviation services.

The reorganisation will also extend to support functions including human resources, public affairs and Finnair's legal team.

A "detailed review of the units and departments belonging to each area" is expected in the coming weeks, Finnair said.

The airline hopes to make lasting savings after last week reporting a €56.9m operating loss in the second quarter.

Jukka Hienonen, Finnair's current president and ceo, also announced his resignation after a string of unsatisfactory financial results and will step down in six months (see ABTN News Aug 7 2009).

Last week Finnair announced it had reached an agreement with its technical services resulting in around €14m in staff savings.

The agreement is part of two cost cutting plans announced earlier this year to make savings of €200m.

The measures include the laying-off of around 6,000 staff including 700 pilots. A further 600 staff have already been made redundant.

www.finnair.com