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Are you feeling Lucky? Budget airline to start flying Helsinki-China

Finnair's eastern strategy has paid off in recent years, allowing the company to cash in on more direct and cost-effective routes between Europe and the Far east — but now a budget airline has joined the market. The Finnish flag-carrier says it's unconcerned by the competition.

Suomeen saapuvien kiinalaisten lentomatkustajien neuvontapiste Helsinki-Vantaan lentokentällä.
Helsinki Airport has made great efforts to improve service to customers from Asia. Image: Kalevi Rytkölä / Yle

Helsinki Airport has added a new airline to its mix with the arrival of Chinese operator Lucky Air. The budget operator will fly a triangular route between Helsinki, Kunming and Chengdu, beginning in January 2018.

Finavia and the majority state-owned Finnair have both invested heavily in making Helsinki an attractive destination for travellers from China and Japan, with Finnair in particular reaping the rewards of the strategy.

The firm broke passenger records in June, has announced a major hiring spree, and says it expects to make some 150 million euros in profits in 2017.

Finnair relaxed over budget competitors

Now other operators are looking to emulate the firm's strategy, but CEO Pekka Vauramo said on Tuesday that he did not see a particular threat from budget operators in China.

"I've understood that Lucky Air flies from Kunming to Helsinki via Chengdu, twice a week," said Vauramo on Yle's morning television programme. "I'm sure they will quickly increase the number of flights. The flights are in any case catering to a different market within China to Finnair's. There is a lot of space in the sky for all these flights."

Vauramo said that he sees potential for growth in the Chinese market, but that there are other limits on that potential.

"It's a completely different thing, whether they will find accommodation in Finland," said Vauramo. "There will soon be a shortage of capacity during high season."

Siberian shortcut

One of Finnair's trump cards has been permission from the Russian authorities to fly over Siberia. Now Norway is trying to get similar permits for the budget airline Norwegian, but Vauramo says he's not concerned about that possibility.

"I don't think the routes will all open at once," said Vauramo. "Finnair has at this moment nearly a hundred flights a week on these routes. We are not in a special position compared to other airlines, but on these routes we have long traditions."

Vauramo also noted the differences in long and short haul aviation, which make it tough for budget airlines to succeed on the longer routes. Budget operators' reluctance to pay for overnight stays by crews can cause difficulties and extra costs on long-haul routes, resulting in a "more even playing field" according to Vauramo.

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