Strategy

Finnair aims to be a modern Nordic airline, providing customers with the ability to tailor their journey at each step of the process as well as to remain relevant outside of the air travel experience. The first step has been to significantly increase the share of direct distribution, improve digital sales capability, and develop revenue optimisation and partner utilisation. The next step is to smooth the process from the customer’s perspective by shifting to customer-centric and data-driven sales, strengthening customer relationships by providing the right product at the right time and increasing customer engagement with more targeted sales communications. Safety as well as excellent on-time performance and regularity remain at the core of Finnair’s operational quality, and the company invests in the use of analytics and data to provide a smooth and timely travel experience.

The strategy emphasises the utilisation of joint businesses with airline partnerships (Atlantic Joint Business or AJB and Siberian Joint Business or SJB). This highlights the role of oneworld partners such as American Airlines and Alaska Airlines in North America, Qatar Airways in the Middle East, Japan Airlines on routes to Japan and Qantas on routes connecting Australia and Asia. Finnair's partnerships provide Finnair customers with an extensive global network and, on the other hand, significantly strengthen Finnair's distribution power.

Product and service quality are still differentiating factors for Finnair, in which operative quality plays an important role. Finnair's long-haul traffic emphasises a high-quality, differentiating travel experience, while smoothness, simplicity and efficiency are key to intra-European traffic.

Due to the closure of Russian airspace, Finnair lost its hub’s unique geographic advantage, as flying around Russia lengthens the routings between Finnair's hub and the mega cities in Japan, South Korea and China by 15–40%, depending on the destination. Finnair has therefore geographically balanced its network with an emphasis on the West and optimised its European network and traffic structure to increase efficiency.

Through the Qantas wet and dry lease agreements and the cooperation with Qatar Airways, Finnair is able to productively deploy its A330 fleet despite the closure of Russian airspace, while maintaining flexibility in the near term to restore connectivity between Asia and Europe.

Faster, standardised turnarounds at airports, improved aircraft utilisation and aircraft returned from British Airways wet lease outs in March 2024 as well as the A350 delivery in December 2024 enable Finnair to grow in line with the market and increase capacity at a competitive cost level despite the capacity constraints prevailing in the aircraft market.

Maintaining profitable and competitive operations require Finnair to continuously review its cost levels with a view to containing cost increases. However, the company has moved from programme-based cost reductions towards continuous cost efficiency improvement to ensure its competitiveness and to protect the opportunity to maintain investments in the customer experience also in the future.

Finnair is committed to continuously and systematically developing its operations in every relevant aspect of sustainability. The company aims to be among the most sustainable airlines in the world. To achieve this, the company must perform visible and effective acts of social and environmental sustainability, as well as cooperate closely with its partners and its supply chain. In order to invest more sustainably, the company must also ensure that the economic development of its business supports such investments.

In 2024, Finnair redefined its climate commitments and set a new science-based target to reduce its carbon emissions intensity (CO2e/RTK) by 34.5% by 2033 from a 2023 baseline. The Science Based Targets initiative (SBTi) has validated the company’s target. Translated to absolute CO2e emissions, the target equates to a reduction of approximately 13% in CO2e emissions using the parameters that have been established for the period.

SBTi requires airlines to decarbonise within their own operations, and Finnair’s toolkit to reaching the target is comprised of investing in sustainable aviation fuels (SAF) beyond regulatory requirements, further improving operational efficiency, optimising its network, and eventually updating its fleet renewal plan. Increasing the use of SAF accounts for over half of the targeted CO2e reduction for Finnair.

In connection with setting the new SBTi target, Finnair reviewed its long-term climate target of achieving carbon neutrality by 2045. After careful consideration, the company decided to align its long-term climate ambition with the industry's united objective of achieving net-zero carbon emissions by 2050.

Social responsibility is a key component of the company's sustainability work. This means taking care of the safety and health of its employees and customers in all circumstances, promoting human rights, equality, nondiscrimination, and diversity in workplace and in its value chain, and offering accessible services.

In building a sustainable balance sheet, it is essential to maintain the achieved business profitability. This strengthens equity and improves cash flows, which enables debt repayment and – together with continuous cost efficiency – builds a sustainable balance sheet. This strategy theme is also incorporated into other strategy themes.

In 2024, S&P Global Ratings assigned a long-term issuer credit rating of BB+ to Finnair Plc, with a stable outlook. It is the first credit rating for Finnair. A public rating enables deeper funding sources from the debt capital markets and increases the execution certainty of financing transactions.

Throughout Finnair’s 100-year history, the company and its employees have demonstrated a remarkable ability to adapt to changing circumstances and find new, previously untapped opportunities. This has been particularly highlighted during and after the twin crises caused by the pandemic and Russia’s attack on Ukraine followed by the closure of Russian airspace. Going forward, the company will focus even more on nurturing and developing this cultural strength and will invest in its people to further improve employee competence, employee and customer experience, and business results.

The aim of Finnair’s shareholder return policy is to pay, on average, one-third of the earnings per share as dividend or capital distribution during an economic cycle. When deciding on such distribution, Finnair intends to take into account its earnings trend and outlook, financial situation as well as capital and investment need for any given period. Any future distributions may be made in two annual payments.