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Finnair sweetens services in bid to win larger market share

Finnair boasted record-breaking profits in its half-year report this year, marking close to three years of result improvement. More passengers are also flying in business class for leisure travel. Finland's flag carrier is looking to enhance its added services to cater to the increasing number of discriminating travellers who are willing to pay more for a better flight experience.

Lentokonetta tankataan Helsinki-Vantaan lentoasemalla.
Image: Mikko Koski / Yle
Yle News

Better service on a flight is one way an airline can stand out among the crowd, and Finland's majority state-owned carrier Finnair is betting that improving its selection of added paid services will attract more customers.

The renewed focus on better service is a U-turn from the trend of recent years, when traditional airlines eliminated or charged for services in order to compete with budget airline pricing. For example, British Airways was heavily criticized earlier this year for reducing its services and cutting leg space to fit in more seats.

Business at Finnair has been good of late and the airline has decided to go the other route – adding cabin crew and expanded service options so customers can enjoy a better experience.

"We have examined what is most important to passengers on a flight, and it is the personal service that they receive while they are on the plane," says Finnair's CEO Pekka Vauramo.

Spending money on more than just the ticket

The airline's assessment also found that ticket holders appreciate an unhurried approach as much as friendliness. Being available to suggest added services or provide time-saving advice is seen as a valuable service.

"People tend to buy the tickets for their flight months in advance, but they wait until shortly before the flight to decide on their meals and other services. That way it feels like it comes from a different budget," says Vauramo.

Ancillary revenue is an increasingly large share of airline profits. For Finnair, it already represents a quarter of all sales. Digitalization will likely only hasten its growth, as it becomes increasingly easier to tailor-make travels.

Business class food for economy travellers

One added service Finnair will start to offer is the option of pre-ordering a business class meal for an economy class seat.

"We can personalise the food service, so the old rule that says your seat number determines your food will be history," the carrier's CEO says.

Choosing food before the plane departs will also cut down on waste, and Vauramo predicts that the airline could stand to save over ten million euros a year with the new pre-order service.

Travelling to collect exotic and unique experiences is on the rise, and many tourists from Asia in particular chose to travel in business class when they embark on leisure trips.

"We've seen clear growth in the passenger segment that chooses business class for their holiday travels. I understand the logic well. If you are heading out for a short getaway, it makes a difference what kind of shape you are in when you arrive," says Vauramo. 

Demand for business class seats in package holiday flights is also up. For example, Finnair's Aurinkomatkat tour operator has already sold over half of the available business seats to its winter destinations.

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