Wednesday 10/28/20
BUSINESS

Finnair to cut 1,000 jobs despite € 700 million state aid

The announcement came exactly three months after the Finnish Parliament approved public aid to save the airline within its third supplementary budget for 2020.

Finnair-ground-personnel-crew-by-Finnair
A Finnair employee serving a traveler. Photo: Finnair.

The damage caused by the coronavirus pandemic to the economy and companies seems to have no end. Yesterday it was the iconic Viking Line shipping company who announced job cuts; today it is Finnair, the Finnish flag carrier, which announces negotiations to reduce its workforce.

Finnair announced in a statement Tuesday its intention to start co-operation negotiations aimed at cutting up to 1,000 jobs, implementing temporary layoffs and "other structural changes." The cause, according to the airline, is "the corona pandemic," which has sunk the demand for travel.

The announcement was made exactly three months after the government came to Finnair's rescue with a € 700 million aid package. This extraordinary financial support, announced by the Government at the end of April, was passed by the Finnish Parliament (Eduskunta) on 25 May, within the third supplementary budget package for 2020.

Co-operation negotiations

The co-operation negotiations with trade unions concern approximately 2,800 employees working in Finland, and similar processes are conducted in Finnair's units abroad.

The company currently employs approximately 6,700 people, of whom 6,200 are based in Finland. Almost all the staff in Finland have been temporarily laid off for a part of the spring and summer.

In addition to the announced personnel reductions, the company says it will continue to apply temporary layoffs "for practically all its personnel in Finland." Those furloughs can be either for fixed term or until further notice.

Save €100 million

The planned personnel reduction measures are included in Finnair's savings target, which the company today updated from 80 to 100 million euros.

”COVID-19 is the deepest crisis of aviation. The pandemic and the exceptionally tight travel restrictions in Finland have impacted flight demand and we will operate only a small part of our capacity compared to last year. A rapid turn for the better in the pandemic situation is unfortunately not in sight. Our revenue has decreased considerably, and that is why we simply must adjust our costs to our new size”, says Topi Manner, Finnair CEO.

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