The Impact of the Russia-Ukraine War on Finnair
Russia and Ukraine have been at war since February and the effects of this conflict have been felt internationally. Within the aviation industry, the rise in fuel prices and the closure of Russian airspace have had tangible effects especially for Finnair.
The effects of the war on Finnair routes
Russia’s airspace has been closed to EU members since February. This closure is a direct result of the ongoing Russia-Ukraine conflict which saw the UK, USA, Canada, and the EU close their own airspaces to Russian aircrafts in solidarity with Ukraine.
Finnair, flag carrier of Finland, has been particularly impacted by the closure of Russia’s airspace. The airline’s strategy has for a long time been centred around a short route connecting Europe and Asia.
Developments in the political situation forced the airline to suspend some services and re-route others. The Finnair COO explained that the effects were “most prominent on flights to Japan and South Korea, where the flight time was up to 40 per cent longer when avoiding Russian airspace.” Consequently, over the summer the suspended services were the ones to Osaka, Nagoya, Tokyo Haneda, Sapporo, and Fukuoka.
The airline’s response
The elongated routes “weaken[ed] the profitability of the company” and Finnair has been forced to pivot westward. The airline has opted for “a geographically more balanced network,” increasing their routes to Southeast Asia, India, the Middle East, and North America.
This shift comes around the same time that Finnair announced their “long-term strategic cooperation” with Qatar Airways. From November the airlines, both part of the Oneworld airline alliance, will cooperate with flights between Doha, Helsinki, Stockholm, and Copenhagen. The flights to Doha will be sold and marketed by both Finnair and Qatar Airways.
Finnair is at the beginning of a period of “significant structural renewal” in response to the struggles of the past few years. On top of rerouting and strengthening their strategic partnerships, the airline has also announced a dramatic cost-reduction plan.
A CEO panel will be discussing how the re-writing of route maps will affect the overall competitive landscape of the industry at this year’s World Aviation Festival. This discussion will occur between Willie Walsh – IATA CEO, Alan Joyce – Qantas CEO, Marjan Rintel – KLM CEO, Annette Mann – Austrian Airlines CEO, and Sir Tim Clark – Emirates President.
Article by Jess Brownlow
