Finnair wants to make itself more attractive to potential buyers

Finnair Oyj CEO Pekka Vauramo’s expansion strategy and push upmarket are helping to position the Nordic carrier for further merger activity within the European aviation industry. “Consolidation moves on,” Vauramo said Monday. “We are a small carrier and there are not too many national carriers in Europe left. It will, in one way or another, affect us at one point.” Vauramo is meanwhile seeking to shape Finnair into a stronger potential partner. The carrier, an ally of acquisitive BA parent IAG in the Oneworld group, has five Airbus Group SE A350s after becoming the jet’s first European operator, with two more due this year. It will also keep eight A330s instead of selling them in order to boost frequencies and add new destinations. Finnair’s strategy has established it as an important niche player, the executive said, with Helsinki acting as a hub for flights to and from the rest of Europe and Japan, South Korea and northwest China. The plan exploits the city’s position on the shortest great-circle routes between the regions. Keeping more A330s will allowing the carrier to double capacity on Asian routes two years earlier than planned, it told analysts and investors at a capital markets day Wednesday. While Finnair is growing, it must also improve its financial performance, Vauramo said. The carrier had an operating margin of only 1% in 2015, and is expanding just as European rivals lift capacity to tap lower fuel costs. That’s led to a slump in fares across the region. Vauramo is also working to improve standards with a business-class overhaul featuring menus from Finnish chefs and what he calls a Nordic experience. “Every airline has had a very tight focus on costs,” he said “But we feel that there is room for good service. Service that really stands out.”<br/>