Finnair restructures to stem losses

Finnair is to undergo an organisational restructure in a bid to stem its growing losses.

The overhaul, starting in October, will include scheduled passenger traffic and leisure flight operations being combined under a new integrated flight traffic organisation.

It would also result in greater cooperation between flight operations and the group’s administration.

The airline hopes to shore up its finances after last week reporting a €56.9m operating loss in the second quarter.

Jukka Hienonen, Finnair’s current President and CEO, announced his resignation after a series of poor results and will step down in six months.

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The airline also announced last week that it had reached an agreement with its technical services resulting in around €14m in staff savings, and comes as part of an overall cost-cutting programme 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.

“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 divisions - commercial operations, production, customer service, travel services 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.