It is really sad that we lost competition on many routes as Flying Finn failed, but only strongest will survive in this industry. I think there were these few key factors why Flying Finn failed:
- Insufficient capital when the airline was launched
- Poor management
- Too big aircrafts and poor rotation
- Poor timing for many of their routes
Any new airline should be able survive 2-3 years even they make loss and obviously FFW wasn't. It is really surprise that airline is filed in bankruptcy even they have operated less than a year. It is a total fact in airline business that even a new airline has a good start and entry to market their 1st and probably 2nd year will be loss making periods. Only after that you can expect profits!
What comes to their management I know they had many disagreements with their biggest shareholders of the company future. Four different CEOs during a year is quite a strong evidence of that. All of them were also more and less unfamiliar with airline business. A clear sign of poor strategy was immediately after their start a decision to keep their aircrafts and crews overnight at different destinations rather than fly in the evening back to their hub, Helsinki. This increased costs a lot as LCCs does usually always keep their aircrafts at homebase overnight.
I have also always wondered why they had very long turnaround times for their MD
-83s at HEL
. 2 hours between flights is absolutely too much as it is very important for LCCs to keep their planes flying all the time. So their operations weren't efficient enough. MD
-83s are also too big aircraft for some of their routes and maybe same turboprop should have suited better for some routes with lower operating costs. On the other hand, some flights had very good loads too, but smaller aircraft could offer more frequencies.
Poor timing for some routes was the decision to start domestic flights to different Lapland destinations immediately after their start which was late spring 2003. Summer is off-season for those destinations so all flights had very small load factors during the summer. Also business destinations such as Oulu (OUL
) was making heavy losses as many people were on holiday. For Finnair this route has always been important cashcow... During the end of last year load factors improved a lot and in January they recorded highest passengers numbers. When finally it looked that they are going to success as all flights were very full they announced that STN
route will end which was a surprise as it was only route which was immediately after start making profit.
It will be interesting to see how other Finnish company Soder Air will succeed as they currently fly with single S2000 from Tampere (TMP
) to many domestic destinations and Tallinn. Anyway, Soder isn't low-cost carrier as they offer premium service with higher prices. What I have heard their start has been successful and good loads reported. Helsinki will also see some kind of LCC boom as Germanwings will start fly here as well as FlyMe and V-Bird will 2nd daily flight. We just need a better finnish company with stronger shareholders and professional management because there is strong demand for domestic LCC operations. Currently Finnair just started to fly by MD
-11 to many Lapland destinations... a good evidence of strong demand!