Finnair Set to Expand Capacity by Over 10% in 2024 with A320 Fleet Reinforcement

Finnair, the Finnish flag carrier, is gearing up for a significant capacity increase of more than 10% in 2024, primarily by enhancing service frequencies to its current destinations across Europe and Asia. This strategic expansion is facilitated by the reintroduction of four Airbus A320 aircraft previously wet-leased to British Airways, a Oneworld alliance partner. These aircraft are scheduled to rejoin Finnair’s fleet in the upcoming spring, signaling a robust step towards bolstering the airline’s operations from its Helsinki base.

Kristian Pullola, Finnair’s Chief Financial Officer, underscored the rationale behind this move in a discussion with analysts after the airline reported a notable swing to a full-year operating profit of €184 million ($197 million) in 2023 from a loss of almost €164 million the year before. Pullola emphasized the aim to utilize assets more efficiently to drive growth and acknowledged the flexibility in adjusting capacity in response to fluctuating demand.

Interim CEO Jaakko Schildt expressed confidence in the planned capacity growth, citing strong passenger demand since 2022 as a key factor underpinning this optimism. Schildt’s strategy focuses on increasing flight frequencies rather than expanding into new destinations, indicating a targeted approach to enhancing service on existing routes.

Notable increases in capacity include a projected 38% rise in flights to Stockholm Arlanda Airport during the summer 2024 season compared to the same period in 2023. Other European cities like Berlin, Copenhagen, Munich, Paris Charles de Gaulle, Prague, and Tallinn will also experience significant capacity boosts. In Asia, Finnair is set to increase its flight frequencies to Osaka Kansai and Tokyo Narita airports, with additional services complementing the daily flights to Tokyo Haneda. Moreover, Finnair plans to resume its Nagoya route on May 30 after a four-year pause, offering bi-weekly flights.

Finnair’s strategic focus remains on connecting Europe and Asia through its optimal Helsinki hub, leveraging the shorter northern route over Russia. However, the closure of Russian airspace has posed challenges, particularly impacting routes to Asia. Despite these hurdles, Finnair is witnessing a gradual recovery in its Asian network, especially with a 32% year-on-year increase in capacity to Japan for summer 2024, reaching approximately 62% of its 2019 levels. The airline’s operations to mainland China, however, remain limited compared to pre-pandemic levels.

The airline’s commitment to adjusting its strategy in response to the competitive landscape, particularly concerning the disparity in airspace access with Chinese carriers, reflects a cautious yet opportunistic outlook towards resuming more profitable routes to China.

With a reported revenue of €2.99 billion in 2023, up 26.8% from 2022, and a passenger count increase of nearly 21% to 11 million, Finnair is navigating post-pandemic recovery with strategic fleet and network enhancements. Despite anticipating slower revenue growth compared to capacity expansion in 2024, the airline’s recent financial maneuvers, including a €570 million rights issue and the strategic use of wet-leased aircraft, highlight its proactive stance in consolidating its market position and financial health.