Key Points:

  • Finnair's CEO, Topi Manner, expressed contentment with the airline's current fleet, considering the airline’s proactive fleet management during the pandemic.

  • Due to long delivery lead times for new aircraft and recent issues with new engine technology, Finnair leans towards older engine options for updating its narrowbodies.

  • While acknowledging future narrowbody renewal needs, the airline highlights that this would be a long-term project and not result in immediate investments.

Finnair aircraft on the tarmac


Assessing Fleet Dynamics Amidst Industry Challenges

While Finnair’s chief executive, Topi Manner, conveyed satisfaction with the airline's existing fleet structure during a 6 October briefing, he hinted at a potential inclination towards older engine technology when updating narrowbody aircraft. This preference stems from the extended delivery timelines for new aircraft and recent technical challenges linked to newer powerplants. Manner highlighted the exceptional quality of Finnair’s technical operations and reiterated that their narrowbody fleet still has significant operational life.


Concerns Surrounding New Technology

Manner spotlighted several challenges in ordering directly from major manufacturers like Airbus or Boeing. The prolonged delivery windows, potentially stretching to 2030, present a clear impediment. Further complicating matters is the recent powder-metal manufacturing issue that impacted the Pratt & Whitney PW1100G engines. Manner noted, “In the short term, new technology has encountered certain issues. Maintenance costs for these newer aircraft sometimes nullify fuel-saving benefits derived from the new engine technology.”


Looking to Leasing and Evaluating Renewal Needs

Should Finnair opt for the latest aircraft and desire expedited delivery, the aircraft leasing market remains a viable avenue, which the airline continues to monitor. Chief Financial Officer Kristian Pullola emphasized their satisfaction with the airline's current fleet composition. However, he acknowledged the eventual need for renewing the narrowbody fleet, describing it as a long-term initiative without immediate investment implications. The age range within the narrowbody sector is quite diverse, spanning 20 years between the oldest and newest aircraft.


Adapting and Maintaining Flexibility

Given the ramifications of the pandemic and the Russian airspace closure, Finnair has made significant adjustments to its operations. They’ve engaged in wet-leasing Airbus A320s to British Airways and A330s to Qantas and initiated strategic collaboration with Qatar Airways. Despite these challenges, Manner underlined Finnair's adaptability to restore its Europe-Asia connections – foundational to its pre-closure business model. He highlighted the flexibility in their agreement with Qantas, stating the potential for Finnair to reclaim leased aircraft for Asia-bound flights, emphasizing the profitability of the wet-lease deal.

Manner concluded by emphasizing that Finnair's current fleet provides ample capacity to grow in sync with market demands. The potential reopening of Russian airspace could further enhance operations, reducing flight durations to major destinations like Japan, China, and Korea. He also underscored the abundant revenue growth opportunities through ancillaries and loyalty programs.