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Finnair's business objective is sustainable and profitable growth
Finnair's competition strategy is based on high quality of service, a status as one of the most punctual airlines in the industry and a comprehensive, continually expanding route network via alliance partnerships. Finnair is strengthening its competitive position by making effective use of various distribution channels and by developing new services.
For business success, the company's main competitive assets are a modern and efficient fleet, reliable and cost-effective operational support services, cost discipline and an environmentally positive outlook. Finnair aim's to create the most interesting products and services in its field of business.
Departure of AY087
As part of its growth and expansion in Asian traffic, Finnair opened a route to Guangzhou in China on 4 September 2005. Finnair flies from Helsinki to Guangzhou on Tuesdays, Fridays and Sundays, and from Guangzhou to Helsinki on Mondays, Wednesday and Saturdays. Our example flight AY087 departed from Helsinki on 22 November at 5 p.m. and arrived in Guangzhou the following morning after a flight of 9 hours and 20 minutes.
a. Fleet
As a financial sound company, Finnair has been able during the last few years to modernise its fleet at a rapid rate. Its modern fleet is cost efficient and environmentally positive. In terms of its modernity, Finnair's fleet is first rate on both a European and world scale and it will ensure the company's future competitiveness.
In September Finnair was among the first airlines to accept delivery of the Brazilian-made 76-seat Embraer 170 aircraft. During the next two years, a total of 16 Embraer will be delivered to Finnair.
In 2004 Finnair brought to a conclusion its Airbus fleet modernisation. The Airbus A320 series and the Embraer aircraft have replaced the Boeing MD-80 aircraft, which will be decommissioned by summer 2006.
In December 2005 Finnair announced that it will update its long-haul fleet by 2012. The Boeing MD-11 series aircraft, which has served the company well, will gradually be replaced by new Airbus A340 and A350 series wide-bodied aircraft, the first of which will join the fleet in 2006.
AY087
AY087 was flown with the latest Boeing MD-11 to be acquired, registration number OH-LGG. The MD-11 is well suited to Asian traffic, because it can carry 300 passengers and up to 25,000 kilos of cargo. Cargo is an important part of Finnair's Asian strategy.
OH-LGG carried 243 passengers and their baggage, plus 23,600 kilos of cargo. The passenger load factor was 86 per cent. The average passenger load factor in Asian traffic is 80 per cent.
b. Product superiority
Finnair must be able in every situation to offer its customers competitive products and services. The product and service package is made up of numerous inter-dependent factors. For the customer, the travel experience generally begins when the journey is booked and ends with a punctual arrival after a comfortable flight. In between the customer may, for example, use Finnair's e-services and lounge facilities, and will enjoy, of course, the in-flight meals, drinks and entertainment services.
AY087
The outcome of product superiority is a satisfied and loyal customer. The services and routes offered by Finnair have proved their effectiveness. This is indicated by continually growing passenger numbers and market shares. Helsinki is an efficient gateway between Europe and Asia. Finnair is naturally the best choice for an increasing number of customers.
c. Route planning
Finnair has purposefully increased the number of its Asian flights since 1999 and now the company has more than 80 flights a week between Asia and Europe. Due to the Helsinki gateway, the number of route pairs is many times this amount. In future, too, Finnair will be among the first companies to open new competitive routes to the strongly growing Asian market.
AY087
Finnair flies to Guangzhou three times a week. Guangzhou is situated on the Pearl River Delta, which is one of China's biggest industrial areas. Around 40 million people live in the region, and one third of China's exports pass through it. Finnair was one of the first airlines to open links between Europe and Guangzhou.
d. Fuel
Fuel costs, which have grown due to the higher price of jet fuel, have a significant impact on Finnair's profitability. During 2005 Finnair's fuel costs rose to nearly 300 million euros, which is 15 per cent of the company's turnover. Fuel costs will also grow in the near future despite Finnair's policy of price hedging.
AY087
On its flight from Helsinki to Guangzhou, the Boeing MD-11 consumes 87 tonnes fuel, which cost the company 47,850 euros. The Airbus A350 aircraft, which Finnair ordered in December 2005 and will join the fleet in 2011, consume a third less fuel than the MD-11s.
e. The Finnair brand
Finnair is one of the world's oldest airlines. Since its founding, customers have come to know Finnair as a quality, blue and white airline. Safety, Finnishness, Freshness and Development are unique strengths which customers value and which are present in every customer contact. They are the cornerstones of the Finnair brand and they contribute to generating sales and achieving growth targets.
AY087
As they step into the aircraft for their Guangzhou flight, the passengers sense the brightness and freshness of the cabin. Friendly, expert staff wish them welcome. The refurbished business class with its lie-flat seats make travelling an enjoyable experience. In-flight services and meals match the strong Finnair brand image that the customers have encountered in Finnair's advertising and service promises.
f. Efficient support services
Efficient, quality support services are key factors in the service chain of a successful company. Quality, satisfying catering is part of the Finnair brand, while expert maintenance and technical services keep the aircraft in peak condition and efficient use. Flexible ground handling services ensure that flights remain on schedule and that passengers are looked after well even at the busiest times.
AY087
On the Helsinki-Guangzhou route 486 meals, 750 cups of coffee and 1,500 drinks are served. Over the years, international surveys have rated Finnair's catering among the elite of the airline industry. Finnair is widely known, among other things, for its excellent selection of wines. Every meal and drink served contributes to creating the Finnair brand.
Owing to efficient, expert maintenance, the OH-LGG flies on average 15 hours per day. Ten man hours are used to maintain the OH-LGG for every hour of flying time. The aircraft is checked before every flight. More fundamental maintenance measures of differing scales are performed at monthly, six-monthly and five-yearly intervals. In the most fundamental servicing measure, every single component of the aircraft is inspected.
g. Personnel
A professionally skilled, motivated and committed work force is an asset that Finnair values highly. The company has more than 9,000 employees, of whom 2,150 are flight personnel: 650 pilots and 1,500 cabin staff.
Every employee plays a key role in producing customer satisfaction, building the Finnair brand and ensuring safety. Finnair actively works to promote the job satisfaction and competence of staff in a rapidly changing operating environment.
AY087
Hundreds of people participate in the planning of the Helsinki-Guangzhou flight as well as in sales, customer service and other practical duties. Expertise and conscientious work are decisive factors in the efficiency of the service chain. For the customer, the most visible role is played by the cabin crew, which consist of 12 staff on the Guangzhou flight. Two of the staff are native-born Chinese, to ensure that the largest customer group can be served in its own mother tongue. |
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