Finnair's New Strategy Begins in Doha
Finnair is an airline in search of a new strategic direction. Enter partner Qatar Airways.
Through a new and improved partnership, the two Oneworld alliance members will build on their existing ties with a new “long-term strategic cooperation” agreement that will funnel connecting travelers across their respective networks, they said last week. Finnair will launch new daily nonstops to Doha — a city it does not currently serve — from Copenhagen, Helsinki, and Stockholm with Airbus A330 aircraft from November and December. In addition, the airline is “exploring” the addition of a fourth European route to Doha in the future.
This pact appears to be the first piece of a larger strategy rethink for Finnair. Prior to the crisis, the airline focused on connectivity between Europe and East Asia; a market that was severely curtailed by Covid border closures, and then further disrupted by the closure of Russian airspace. To put the impact in numbers: Finnair flew nearly half of its capacity to Asia in 2019 but, in the first nine months of 2022, only 28 percent of its capacity flew to the region, according to Diio by Cirium schedule data.
“We need to renew our strategy,” Finnair CEO Topi Manner said in July, adding that this was needed in order to “come back to profitability and in order to strengthen our financial position.” More details were to come this fall.
By partnering with Qatar Airways, Finnair can put aircraft idled by the border and Russian airspace closures to work flying to and from Doha. In addition, it creates new routings to feed Nordic travelers into “Australasia, the Middle East and Africa,” as Manner put it. Many of these travelers would previously have flown through an East Asian hub on Finnair, or on another airline.
One critical market for Finnair that the new partnership keeps open is Australia. Prior to the pandemic, the country was an important one for the airline with partners Cathay Pacific and Qantas feeding travelers onto its flights in Hong Kong and Tokyo. That connecting traffic has fallen significantly with Hong Kong’s tight travel restrictions, and the significantly longer routings Finnair flights between the region and Helsinki must take to avoid Russia. The partnership with Qatar Airways over Doha bypasses East Asia altogether on routings to Australia.
“This is a smart move to use existing capacity right now,” said Shakeel Adam, a managing director at airline consultancy Aviado Partners, though he cautioned that Finnair’s partnership with Qatar Airways is likely only one piece of its new plan. “Before anyone passes judgement, we need to see what the rest of the strategy is … Just being a feeder Qatar Airways is not [in itself] a long-term strategy.”
The deal also benefits Qatar Airways. In addition to adding feed to its flights beyond Doha from Finnair, the partnership will more closely align it with the Nordic carrier to provide connectivity into Scandinavia via Copenhagen, Helsinki, and Stockholm. Qatar Airways serves all three cities nonstop from Doha, Diio shows.
“This strategic partnership demonstrates our commitment to the Nordic markets,” Qatar Airways CEO Akbar Al Baker said. “This partnership will be the foundation for the future expansion here.”
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