Finnair has reached an agreement with its Finland-based cabin crew unions about pay reductions until late 2025. A collective agreement has been extended by one year until January 31, 2025. As a result, the airline cancels its previous plan to increase subcontracted inflight services on routes to Thailand and North America. Finnair and cabin crew agree on cost reduction plan.
Together with agreements for pilots, white-collar employees, engineers, and cabin crew based in Japan and Korea, Finnair says that it has now savings agreements in place for 87 percent of all staff. Agreements to improve productivity and efficiency gains at Finnair Technical Services and other ground operation units have also been secured.
The cost reductions and efficiency gains are part of the airline’s strategy review that was announced last September. Finnair wants to restore profitability and return to an EBIT of at least five percent to pre-pandemic in 2024 by optimizing the network and fleet, deleveraging the balance sheet, and reviewing partnerships. Some 150 employees have been made redundant. CEO Topi Manner said earlier that measures had to be taken as Finnair’s results were impacted by the effects of the Covid-crisis and the unavailability of Russian airspace to Asia following the sanctions on Russia.
The latest agreement with 1.750 cabin crew in Finland includes higher productivity, changes to long-day compensation, and layover hotel rules. “With the agreement, cabin crew is included in Finnair’s staff incentive plan 2023-2025, along with all other employee groups who have made savings agreements. The staff incentive plan will produce a payout in the first quarter of 2026 if Finnair achieves the EBIT margin target set in the plan,” the airline says in a media release.
However, the agreement includes a salary settlement for this year and 2024 in line with that of other sectors that partly compensate employees for inflation. Finnair ended 2022 with a €-476,2 million loss.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News and until July 1 2023 in a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.