Finnair plans to take alternative measures to reach cost savings

Finnair is started employee consultations with its personnel. The consultations concern employees working in administrative and support functions as well as cabin attendants. The measures are part of the savings program started in 2011, which aims at breaking Finnair’s loss-making cycle. The company still hopes that by achieving cost reductions in ongoing negotiations the redundancies could be avoided for the most part. Finnair plans to rationalise its administration and support functions, which could lead to a reduction of approximately 140 employees at this stage. Possible need for further reduction in these functions will be estimated during the rest of the year. The reductions would concern some operative, commercial and common corporate support functions that employ altogether some 800 persons in various tasks. At the end of last year Finnair concluded new collective labour agreements in line with the Finnish Employment and Growth Pact. At the same time, the parties agreed on cost reduction negotiations that would be concluded with cabin attendants by the end of April 2014 and with pilots by mid-June. When Finnair announced its loss-making results for 2013, the company stated that it must assess other options for reaching its targets, in case the necessary agreements on cost reductions are not reached through negotiations. Although the company’s priority and preference is to reach agreement with personnel at the negotiation table, it is now obliged to draft optional plans to increase outsourcing of flight crew. Finnair now begins employee consultations with personnel representatives on the topic.