Finnair re-thinking its China strategy as competition increases

Published: 26-04-2019 Finnair re-thinking its China strategy as competition increases

Apr 26, 2019 (newstodate): Finnair is re-thinking its strategy for the Chinese market after seeing demand waning and competition increasing.
   -CEO Topi Manner, who joined the company at the start of the year, said the company got it wrong in 2018 when it moved to target higher-yielding single passengers, writes the travel media SKIFT citing Mr Manner on an earnings call after the release of the company’s first-quarter results.
   -In China, about a year ago, we also sort of made the decision to test and focus more on individual travel out of China, especially in some cities. And that…has only partially been successful for us, Mr Manner said.
   Finnair is thus now to consider returning to focus on group bookings rather than single travellers that are still constituting only a fragment of the Chinese air travel public.
   In Q1, 2019, ASK on Finnair's Asian lanes increased by 8.1 percent, y-o-y, while RPK increased only 0.6 percent, leading to a drop by 6.2 percent in passenger load factor.
   Finnair has developed a strong offer for flights between Finland and China, celebrating in 2018 its 30th anniversary of its first China-bound flight.
   The carrier is now operating 38 weekly flights from Helsinki to six destinations in China - Beijing from June 2, 1988, Shanghai from September 2003, Chongqing from May 9, 2012, Xian from June 14, 2013, Nanjing from May 13, 2018, and Guangzhou from September 2, 2005, as well as to Hong Kong from May 19, 2007.
   Finnair is however seeing competition building up on its Chinese flights as Tibet Airlines has launched flights from April 8, 2019, with one weekly rotation on the route between Jinan, in China's Shandong Province, and Helsinki with Airbus A330, adding a second frequency from May 9, 2019.
   After Tibet Airlines, the Chinese low-cost carrier Juneyao Airlines will be next with flights between Shanghai and Helsinki starting from June 28, 2019, offering daily services.
   In addition to that, China Southern Airlines will also launch flights on its new route from July 1, 2019, connecting  Guangzhou and Helsinki in competition with Finnair, while the two airlines are however to cooperate on the route through a code-share agreement.

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