Finnair drops hope of joining airline consolidation, looks to Asia

Finnair has dropped hopes of taking part in industry consolidation because politicians oppose relinquishing state control and will instead look to Asia to expand alone, its CE said. Finland's flag carrier, 55.8% government owned, has for years urged lawmakers to scrap a clause obliging the state to hold a majority stake. Former minister for state-owned firms, Heidi Hautala, failed to win support in her push for change. The current centre-right government considered the idea but dropped it and has no plans to discuss it again, two government sources said. Finnair CEO Pekka Vauramo said any plan for a tie-up was "off our table at the moment" and said the airline, with annual sales of around E2.6b, aimed to expand on its own with a focus on Asian routes. "We will go for our growth opportunities and define our future by ourselves," he said. Europe's airline industry has faced turbulence with the collapse of Monarch and Air Berlin, while Alitalia filed for insolvency protection, although airlines also saw a rise in global passenger traffic in 2017, up 7.6%. Vauramo had said in September that Finnair was too small and had suggested tying up with a larger player would help, echoing comments he had also made in 2016. Relations with the state have been strained. The board member for management compensation said he would quit this month, after the government criticised the board's approval of a supplementary pension arrangement for Vauramo. A government source said Finnair's ownership was "just too sensitive a thing, politically" given the desire to have a state airline. <br/>