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Finnair Long Haul - Overview  
User currently offlineokAY From Finland, joined Dec 2006, 652 posts, RR: 0
Posted (2 years 2 days 5 hours ago) and read 13400 times:

Hello all,

I came across this (at least for me) interesting article discussing AY's growth in long haul operations. It also gives quite good general picture of the state of AY as well as the markets the company is targetting at the moment.

Now, what interests me most is the development of the long haul network. It is discussed in the article and AY representative comments on it, but gives no destinations which could be of interest to the airline. The idea seems to be to target secondary Asian destinations. What cities do you see on the list? As the article states, if Finnair is to continue this strategy, the announcement of new destination should not be long way down the line. Otherwise they might drop the ball in the game and that could prove to be fatal for such small player as AY is.

okAY

36 replies: All unread, showing first 25:
 
User currently offlineFlyingHollander From Netherlands, joined Jul 2011, 217 posts, RR: 0
Reply 1, posted (2 years 2 days 5 hours ago) and read 13321 times:

The thing I wonder is if AY will have the necessary amount of European feed in the future for many more secondary Chinese/Asian cities. I doubt it. I believe KL and LH have the advantage, not AY, even though flying through their hubs might require passengers to backtrack.


If it ain't Dutch, it ain't much.
User currently offlineokAY From Finland, joined Dec 2006, 652 posts, RR: 0
Reply 2, posted (2 years 2 days 5 hours ago) and read 13270 times:

Quoting FlyingHollander (Reply 1):

Can you ebalorate on your argument? Finnair has quite large European network to gather feeder traffic. If you mean capacity-wise, if the need is there, sure the capacity in European network can be increased in order to meet the demand.

okAY


User currently offlinefinnishway From Finland, joined Jul 2012, 308 posts, RR: 0
Reply 3, posted (2 years 2 days 4 hours ago) and read 13064 times:

I have been thinking why AY doesn't fly more to North America. They have been flying to several destinations in USA. Why don't they fly those routes anymore? I think HEL as an hub needs better connections to North America, but that is just my personal opinion.

User currently offlineokAY From Finland, joined Dec 2006, 652 posts, RR: 0
Reply 4, posted (2 years 2 days 4 hours ago) and read 12877 times:

Quoting finnishway (Reply 3):

Welcome to the forum finnishway  

AY could make it work as a US-India carrier. In that case the East coast cities could be considered. Otherwise it makes more sense to fly "the other way" to reach India. This idea has been discussed to the bone, now all that is left is to try it out in practice and see if the plan holds water. The floor is yours, Finnair.

okAY


User currently offlineFlyingHollander From Netherlands, joined Jul 2011, 217 posts, RR: 0
Reply 5, posted (2 years 2 days 3 hours ago) and read 12786 times:

Quoting AY" class="quote" target="_blank">okAY (Reply 2):
Can you ebalorate on your argument?
AY definitely doesn't have as large a European network as e.g. KL and LH, this alone doesn't mean anything though. However, a secondary Chinese city (e.g. XIY) can't support service to a European city on O&D alone and thus needs feeder routes. If you have many feeder routes to your hub you will have more people on the XIY flight. You see this of course in the Middle East, the more spokes you have on the one side of the hub the more you can have on the other. Additionally cities like AMS and FRA are likely have more O&D than a city like HEL. Also Skyteam and Star Alliance have more connecting opportunities in secondary Chinese cities than Oneworld does.

I think some expansion will be possible for AY but not much, especially if LH and KL are serious about increasing their service to the region. AY seems to be neglecting their European operations which are vital for their long haul ops.

[Edited 2012-08-27 06:00:55]

[Edited 2012-08-27 06:01:39]


If it ain't Dutch, it ain't much.
User currently offlineokAY From Finland, joined Dec 2006, 652 posts, RR: 0
Reply 6, posted (2 years 2 days 3 hours ago) and read 12677 times:

Quoting FlyingHollander (Reply 5):
AY seems to be neglecting their European operations which are vital for their long haul ops.

Agreed. For example, the decision to outsorce MAD to a third-party airline will definitely hurt their reputation.

Quoting FlyingHollander (Reply 5):
AY definitely doesn't have as large a European network as e.g. KL and LH, this alone doesn't mean anything though.

You have to put this in scale with the long haul operations. Just as AY does not have as big feeder network, their long haul ops are not as big as the ones of KL/LH, either. And as said, this can be increased if needed.

Quoting FlyingHollander (Reply 5):
Also Skyteam and Star Alliance have more connecting opportunities in secondary Chinese cities than Oneworld does.

Why would the Asian counterparts in these two alliances give passengers to KL/LH and not funnel them to their own long haul flights out of already establised points of departure to Europe? In this way I see AY and KL/LH on the same line.

Quoting FlyingHollander (Reply 5):
Additionally cities like AMS and FRA are likely have more O&D than a city like HEL

True, but I guess not enough as these flights do not exist.

You give good points on why AY would not succeed in its strategy. However AY is going for it, full steam, as it seems it is their only way to survive. AY has to make it in its Asia strategy, otherwise it will be an afternoon snack for one of the big boys.

okAY


User currently offlinefinnishway From Finland, joined Jul 2012, 308 posts, RR: 0
Reply 7, posted (2 years 2 days 3 hours ago) and read 12657 times:

Quoting AY" class="quote" target="_blank">okAY (Reply 4):
now all that is left is to try it out in practice and see if the plan holds water. The floor is yours, Finnair.

I really hope Finnair decides to try some new route to USA, but don't expect that happening too soon.

Quoting FlyingHollander (Reply 5):
AY seems to be neglecting their European operations which are vital for their long haul ops.

That is true, but according to Finnair European operations make most of its operating losses.


User currently offlineokAY From Finland, joined Dec 2006, 652 posts, RR: 0
Reply 8, posted (2 years 2 days 3 hours ago) and read 12592 times:

Quoting finnishway (Reply 7):

well, as I see it, any new route in the US would have to be well-linked to traffic for India/SE Asia.

The whole European traffic is problematic for AY. It bleeds money, but offers the all important feeder traffic. This is the problem with the big boys as well, though.

Best would be to find a partner like FlyBe that would fly the Euro-routes under the AY brand.

okAY


User currently offlineFlyingHollander From Netherlands, joined Jul 2011, 217 posts, RR: 0
Reply 9, posted (2 years 2 days 3 hours ago) and read 12494 times:

Quoting AY" class="quote" target="_blank">okAY (Reply 6):
Why would the Asian counterparts in these two alliances give passengers to KL/LH and not funnel them to their own long haul flights out of already establised points of departure to Europe?

When searching for flights to China I have often come across routing such as AMS-CTU-KMG or AMS-HGH-SZX. This definitely won't be of great impact on the performance of the flight but it does give it a little extra push in the back.

Quoting AY" class="quote" target="_blank">okAY (Reply 6):
AY is going for it, full steam, as it seems it is their only way to survive. AY has to make it in its Asia strategy, otherwise it will be an afternoon snack for one of the big boys.

They should try to make the best out of it in the near future, but they shouldn't expect that they will be THE airline between Europe and China. Like I said, I believe if the large carriers put a little pressure on them AY will be left with very few Chinese destinations.

AY needs a back up plan. Thinking out of the box: USA/Canada East Coast to secondary Chinese cities, India and the Middle East (backtracking is not too bad) or South America to East Asia. However, I have no idea how they would make this happen though.

Quoting AY" class="quote" target="_blank">okAY (Reply 8):
The whole European traffic is problematic for AY. It bleeds money, but offers the all important feeder traffic. This is the problem with the big boys as well, though.

That problem NEEDS to be solved, as it affects all there operations and the big boys have a large enough network to cover for this.



If it ain't Dutch, it ain't much.
User currently offlineokAY From Finland, joined Dec 2006, 652 posts, RR: 0
Reply 10, posted (2 years 2 days 2 hours ago) and read 12376 times:

Quoting FlyingHollander (Reply 9):
They should try to make the best out of it in the near future, but they shouldn't expect that they will be THE airline between Europe and China. Like I said, I believe if the large carriers put a little pressure on them AY will be left with very few Chinese destinations.

I don't think AY thinks they will be THE airline to/from Asia. Though, so far so good with the strategy. It's not like the larger carriers are without problems, either. It's not like they can just start operations tomorrow if they like. The two mentioned big boys, KL/LH are in trouble as well, KL-AF needing to make redundancies in work force and LH just announced loss in European traffic.

Quoting FlyingHollander (Reply 9):
That problem NEEDS to be solved, as it affects all there operations and the big boys have a large enough network to cover for this.

Yes, this needs to be solved. However, I fail to see how this is size-related? You mean KL/LH can afford non-profitable European routes on the expense of those that do make money? I think that needs solving just as quickly. Abd this is what is surely happening at AY as well, just in smaller scale. Size per se does not provide shelter from, for example, bankruptcy.

okAY


User currently offlinefinnishway From Finland, joined Jul 2012, 308 posts, RR: 0
Reply 11, posted (2 years 2 days 2 hours ago) and read 12320 times:

Quoting FlyingHollander (Reply 9):
AY needs a back up plan. Thinking out of the box: USA/Canada East Coast to secondary Chinese cities, India and the Middle East (backtracking is not too bad) or South America to East Asia. However, I have no idea how they would make this happen though.

They really need a back up plan, but it is not easy to make. I could see AY flying to MIA & IAD. Maybe even to SFO or LAX. China has many potential destinations. Middle East is hard to get working, because it is big competitor to HEL. South America can be ruled out. Asia will be the main strategy for AY, but I hope that they have considered other options as well.


User currently offlineokAY From Finland, joined Dec 2006, 652 posts, RR: 0
Reply 12, posted (2 years 2 days 2 hours ago) and read 12282 times:

Quoting finnishway (Reply 11):

AY management has themselves used the all-eggs-in-one-basket metaphore to describe the situation they are in. And they have also realised that as they have to have all the eggs in one basket, then "the safest basket" is the Asia strategy. It's easy to say they have to have a back up plan, but there is no point in having one if it is not viable. I am sure the N. America-India gateway idea has been considered by AY, but at least so far no actions have been taken by the airline. Is it due to the economical situation, or has the airline come to a conclusion that it would just not work. Time will tell, I guess.

okAY


User currently offlineFlyingHollander From Netherlands, joined Jul 2011, 217 posts, RR: 0
Reply 13, posted (2 years 2 days ago) and read 11691 times:

Quoting okAY (Reply 12):
It's easy to say they have to have a back up plan, but there is no point in having one if it is not viable.

I should rephrase myself concerning this: They should have a back up plan in mind. IF the Asia strategy goes wrong they have to be able to switch over to plan B.



If it ain't Dutch, it ain't much.
User currently offlineFlyingHollander From Netherlands, joined Jul 2011, 217 posts, RR: 0
Reply 14, posted (2 years 2 days ago) and read 11594 times:

Something else that is very important for AY's future is what Norwegian aspires to do in Finland. They obviously DO have a money making European network. If they expand much at HEL that could be the end of AY. I don't think that a Nordic Air Shuttle is unthinkable in the future. The 787-8's on order are the perfect aircraft for any long haul operations from HEL.


If it ain't Dutch, it ain't much.
User currently offlineAirlineCritic From Finland, joined Mar 2009, 701 posts, RR: 1
Reply 15, posted (2 years 2 days ago) and read 11537 times:

Excellent article, thanks for pointing us to it.

I do agree that the discussion about backup plans is somewhat academic. There is no sure thing in business, but it usually pays to focus where you competitive advantage is. AY's advantage is the routing to Asia. If that fails, well, the backup plan is to shelve the airline or sell it to BA. Why would you compete on North American if the market is already very competitive and AY has no natural advantage there?

But AY has a good shot at executing their strategy to Asia, basically the likes of LH and BA have a geographic disadvantage and SK management and owners have no clue, and AY has the first-mover advantage. The idea about working with a low-cost carrier such as FlyBe on European feeder routers is solid, if the business arrangements between the partners can be made in reasonable terms for AY. The only possible competition for Asia that I can see is DY. Aren't they getting long haul equipment soon?

I found the article's discussion about the 350 delays interesting. It could indeed be that AY needs to grow to north-east Asia faster than the current 350 deliveries will allow. A couple of rented 330s perhaps? (Can I dream of a fleet of A380s for the Emirates of the north?)


User currently offlineFerroviarius From Norway, joined Mar 2007, 225 posts, RR: 0
Reply 16, posted (2 years 1 day 22 hours ago) and read 10302 times:

Good evening,

according to my experience, AY is a reliable airline that provides good service.

I think, a further aspect in the discussion might be the fact that AY is a OneWorld member. I assume - though I do not know and might be totally wrong - that a lot of traffic from Western Europe to Asia and Australia / New Zealand is channeled via London and done by British Airways, JAL and Qantas. Since AY is a OneWorld member they will hardly be willing - or able - to seriously try to compete with, e.g. BA, by making an advantage out of their geographical location and the speed at which the comparatively small HEL airport operates and collecting pax from secondary airports in the UK, Ireland and the Beneluxes and offering them a faster trip towards the East by avoiding the "Go to London, first!" and by "Change in HEL in just 45 min. to your long distance plane."
Another advantage of HEL might be that it is in "not so large of a penalty" UHL range to MEL or SYD and could offer one stop trips Europe - MEL/SYD. Since they have 343s and 333s a 345 - cheaper than the 777s - might fit into their fleet although they seem to be allergic against RR engines.

Best wishes to AY.

Ferroviarius


User currently offlineSAS A340 From Sweden, joined Jul 2000, 778 posts, RR: 0
Reply 17, posted (2 years 1 day 22 hours ago) and read 10277 times:

Quoting FlyingHollander (Reply 14):
Something else that is very important for AY's future is what Norwegian aspires to do in Finland. They obviously DO have a money making European network. If they expand much at HEL that could be the end of AY. I don't think that a Nordic Air Shuttle is unthinkable in the future. The 787-8's on order are the perfect aircraft for any long haul operations from HEL.

I don't know how many swedes that use finnair to Asia,but Mr kjos (Norwegian) says that ARN is to be the big hub to Asia in the near future, and with the European network that Norwegian has....it could have a big impact on AY...?



It's not what u do,it's how u do it!
User currently onlineseansasLCY From Hong Kong, joined Mar 2007, 858 posts, RR: 0
Reply 18, posted (2 years 1 day 21 hours ago) and read 9955 times:

Doesn't Finnair own a stake in Norwegian?

I could see Norwegian maybe working closer with Finnair and Flybe to operate a European network with Finnair operating connections to secondary cities in Asia.


User currently offlineHELyes From Finland, joined Oct 2010, 917 posts, RR: 1
Reply 19, posted (2 years 1 day 21 hours ago) and read 9814 times:

Quoting SAS A340 (Reply 17):
I don't know how many swedes that use finnair to Asia,but Mr kjos (Norwegian) says that ARN is to be the big hub to Asia in the near future, and with the European network that Norwegian has....it could have a big impact on AY...?

Sweden sure is an important market for AY, interesting to see how things look in the future. Are DY planning to serve business travellers as well? On the other hand, according to the article above passenger traffic between Europe and Asia is growing at a rate of 6% to 10% a year so you would think there will be room for both old and new operators.

According to the same article AY has a 10% share of the capacity from Japan to Western Europe, which is more than BA have, that was surprising. In March 2013 HEL gets even more traffic to Japan, JAL will open a 787 route NRT-HEL in a cooperation with AY.


User currently offlineAirlineCritic From Finland, joined Mar 2009, 701 posts, RR: 1
Reply 20, posted (2 years 1 day 21 hours ago) and read 9699 times:

Quoting Ferroviarius (Reply 16):
Since AY is a OneWorld member they will hardly be willing - or able - to seriously try to compete with, e.g. BA, by making an advantage out of their geographical location and the speed at which the comparatively small HEL airport operates and collecting pax from secondary airports in the UK, Ireland and the Beneluxes and offering them a faster trip towards the East by avoiding the "Go to London, first!" and by "Change in HEL in just 45 min. to your long distance plane."

But that appears to be exactly what they are doing, and how they are marketing it.

You could ask whether there is some limit where BA gets too nervous and flexes its muscles to shut the smaller carrier down. Maybe so. But disputes and competition within an alliance is not unheard of. And AY's current operation is certainly not in the scale that it would carry a lot of traffic from secondary airports in Europe. It does have a MAN route (with plenty of Japanese tourists... I was just on that flight), MXP, a few different German destinations, etc. But that's it.

To me it seems that the biggest problem with AY's intra-European route network is not that it is not profitable, but that it is limited. Go in bed with Norwegian, FlyBe, etc to make it happen?


User currently offlineB777LRF From Luxembourg, joined Nov 2008, 1332 posts, RR: 3
Reply 21, posted (2 years 1 day 21 hours ago) and read 9442 times:

Of course, what AY really want is to pay Ryanair money to crew on the short-hauls, and GSP money to everybody else apart from senior management. It's the "easiest' way of saving lots of money, but as with all things that doesn't fit neatly into a spreadsheet there's a dark side.

By doing so, AY is taking the dangerous path of outsourcing all their feeder traffic. As they themselves are so acutely aware, it's the feeder flights that keeps the Asia expansion going, and it's upon the Asian growth their future depends. But by outsourcing to a lower-cost operator, they stand a both real and perceived chance of creating a reduced quality operation. And who wants to connect via HEL if the 2-hour feeder flight is a Ryanair-esq misery? There are, as mentioned up thread, numerous alternatives available, and I belive separating short and long-haul flights in such a way is a grave mistake to make.

The travel experience start from the moment you first make physical contact with the airline, not after you've first checked-in with a "LoCo" and travelled half-way across Europe in a cramply configured schooner, manned by no-career-prospect cabin attendants and pay-to-fly First Officers.



From receips and radials over straight pipes to big fans - been there, done that, got the hearing defects to prove
User currently offlineFlyingHollander From Netherlands, joined Jul 2011, 217 posts, RR: 0
Reply 22, posted (2 years 1 day 18 hours ago) and read 8303 times:

Quoting SAS A340 (Reply 17):
with the European network that Norwegian has....it could have a big impact on AY...?

If Norwegian expands at HEL forcing AY to reduce their European services then AY won't have enough feed for most of their destinations in Asia. And if they can't make money in Asia or Europe how are they going to remain in existence?



If it ain't Dutch, it ain't much.
User currently offlineIBERIA747 From Spain, joined Aug 2003, 1831 posts, RR: 58
Reply 23, posted (2 years 1 day 18 hours ago) and read 8243 times:

Quoting okAY (Reply 6):
the decision to outsorce MAD to a third-party airline will definitely hurt their reputation.

Wow...

Didn't see this coming. What exactly happened here?

I don't have figures but, I've heard Finnair is quite popular among Spanish pax going to the Far East. Maybe Emirates and Qatar are taking away a lot of customers?. Both airlines have increased their pressence in the Spanish market heavily.



¡¡VIVA ESPAÑA!!
User currently offlinevincewy From Taiwan, joined Oct 2005, 767 posts, RR: 1
Reply 24, posted (2 years 1 day 11 hours ago) and read 6317 times:

Quoting FlyingHollander (Reply 9):
AY needs a back up plan. Thinking out of the box: USA/Canada East Coast to secondary Chinese cities

I don't think it's a good idea unless they really want to cut C/J fares further, as of now it has already infuriated many domestic and intra-European travelers when you can go from LHR to BKK for almost the same price (sometimes even cheaper) as going to other European cities. We already have TK, MEB3 (EK,EY,QR), plus a few other ME carriers offering very competitive fares, even C/J class from US to Asia. Even JFK couldn't sustain second daily service (later departure/arrival to connect DEL/BOM and they axed BOM, DEL is not safe from the chop list), the core O&D is in decline, I expect the trend to continue.

http://www.finavia.fi/files/kronodoc...iikenteen%20kv%20matk%20eng-fi.pdf

Unsurprisingly, Japan is still the biggest market (I presume NRT mostly), followed by BKK. AY needs to re-evaluate their advantage, what they may have and yet EK/EY/QR don't? Perhaps additional gateways to second, even third tiered European cities linking Asia where most EU states wouldn't grant MEB3 access, instead of fighting for market shares of major gateways like LHR, CDG, and FRA.

[Edited 2012-08-27 22:17:24]

25 Treg : B777LRF, excellent point. That is exactly what is bugging me as well. Without solid European network there is no Asian strategy. But their latest ste
26 Post contains links okAY : Finnair is popular among the Swedes: Finnair på plus från Sverige till Asien It is a very good question. I assume the costs for the route are too m
27 MAS777 : Wouldn't it be great if we saw Malaysia Airlines operate a KUL-HEL service with AY code-sharing instead.. *wink*
28 Post contains images HELyes : Malaysian Airlines used to fly to New York via Stockholm, would be great to see them back in north. Their A380 flying KUL-HEL-JFK would be a dream
29 Post contains images teme82 : And it will be dream thanks to HEL not having A380 gates. I bet AY would have few A380's on order if there would be gates for A380.
30 AirlineCritic : Gates can be built, and would IMO be built, if there were A380s coming.
31 Post contains images okAY : I personally would not even like to see the A380 in AY fleet. It just looks.. like a wale. Thinking of Finnair's all white livery, the name Great Whi
32 Lufthansa : Does anybody think Finnair could talk Qantas into dumping FRA in favour of HEL as a continental european hub? The world has changed a lot since FRA wa
33 Post contains images HELyes : They said then they needed the capasity in India where they were expanding at the same time. Interesting... deaming is free! Perhaps surprisingly HEL
34 PieterBoth : I think this is a similar problem SN has; the African routes are their money maker, and they rely at least partially on SN's European feeder traffic.
35 teme82 : Yes they can. But then there is the winter. I remember still the problems with Gate 24 that was movable gate during winter...
36 Lufthansa : Also an A330 could be sent the entire way as Finnair already send the to Hong Kong and Qantas already sends them to hong kong too! Though the current
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