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Finnair wishes to improve yield and fill up rate through its Economy Comfort class

Finding new growth paths towards Asia

Finnair is trying to improve its yield and fill rate through the establishment of an Economy Comfort Class located in front of its Economy Class. It also hopes to promote its flights towards Asia on the French market through special offers.

Rédigé par Laury-Anne CHOLEZ translated by Joséphine Foucher le Dimanche 21 Septembre 2014

In Business Class, Finnair offers a bed that horizontally reclines in almost all of its fleet - DR Finnair.
In Business Class, Finnair offers a bed that horizontally reclines in almost all of its fleet - DR Finnair.
Not easy being a national airline company in a market of only 5 million inhabitants…

In fact, it is impossible to rely on the dynamism of internal demand to expand its activity.

Finnair, like its European counterparts, is undergoing a grave structural crisis, forcing it to reduce spending and cut cabin crew jobs as a result.

To find new growth paths, the company is looking to the East by attempting to impose Helsinki as the hub between Europe and Asia, via Siberia.

The company is now flying to 15 Asian destinations, and keeps increasing its frequencies, especially on Bangkok.

But Javier Roig, Sales Director for Southern Europe, stays realist on the company’s market shares in France.

“The competition is rough, especially since Air France added its A380 towards Asia. However, we hope to be the first flight option with a connection.”

Keeping an eye on the yield of the Norwegian low-cost

Javier Roig, Sales Director for Southern Europe - DR
Javier Roig, Sales Director for Southern Europe - DR
Currently, 26% of French travelers use Helsinki as the hub towards Asia. Others connect through another city in Finland (22%) or towards Europe (20%) or stay in the Finnish capital.

However, the market between Paris and Helsinki remains difficult for Finnair, in competition with the low-cost airline, Norwegian, that has three weekly flights (Monday, Wednesday, Friday) from Orly.

“France is not looking good, with a 4% decrease since the start of year. But I think that the end of 2014 will be stable.”

He also keeps an eye on the yield of the low cost in order to adjust its pricing grid and attempt to match it on departure days.

But it cannot be equally competitive in terms of pricing, Finnair can however fight through the quality and services provided onboard.

To attract businessmen, the company set up bed-seats that fully recline horizontally up to 2 meters long and 58 cm wide. Almost all of the fleet is equipped with them.

A new Comfort Class

The company should also deploy its future Airbus A350-900 in the second semester of 2015.

But these services are not enough to fill up the cabin. So, Javier Roig decided this summer to establish an offer starting at 1,489 euros tax included in Business Class going to Bangkok, where competition is rough.

Other destinations were also selected.

“This offer worked very well with TOs, because direct flights from Paris are actually pretty expensive in the summer” underlines Javier Roig.

Another innovation, aiming this time to improve its yield: the establishment of an “Economy Comfort” class, also known as Premium Economy by competitors.

“We refuse to use that term because clients often expect too much from a premium class.”

To be inaugurated on November 1st, 2014, these 43 seats set up at the front of an Economy Class will provide at least 10 cm of added space between seats, a more comfortable head-rest, and headphones similar to those in Business Class.

But the menu will be identical to the one in Economy. This class will be sold on already existing fares such as the Y-H and B in GDS.

He also wants to develop an application to stimulate the purchase of ancillary products, allowing to make reservations in advance for not only an upgrade, or the seat choice, but also hotels and insurances.

Enough to try to increase the yield, the primary battleground of all airline companies.

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Tags : finnair

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