HELSINKI, Finland--(BUSINESS WIRE)--Regulatory News:
Finnair Plc (HEX:FIA):
Klaus Heinemann, Chairman of the Board, Finnair:
Finnair's Annual General Meeting began today, 27 March 2014, at 3:00 p.m. Finnish time in Helsinki, Finland. Klaus Heinemann, Chairman of the Finnair Board of Directors says in his opening statement that the Finnair Board had during the past year considered how Finnair should be taken forward and how the future of Finnish aviation and the hub status of Helsinki Airport could be secured also in the coming years. Heinemann also expresses strong support for the transformation and cost saving plans Finnair announced today.
- The Board's duty is to consider the strategic options Finnair has and to prepare for possible changes in the market and competitive environment. Our profitability must in future be so robust that it is not immediately shattered if our operating environment changes. It must also be so good that it gives us a say in any potential partnership arrangements, Klaus Heinemann stresses. - We want to ensure that the Helsinki Airport continues to grow in any scenario. It is important that Finns have good air connections. These are the starting points for the Finnair Board as we consider consolidation as well as future investments.
Heinemann says he believes that Finnair will in the coming years need closer partnerships with the largest players of the industry. - We want to ensure that such changes are implemented so that Finnair has a strong role in them. The Board does not want Finnair to become market driftwood. We want to find a structure that protects Finland's vital interests in the Helsinki-Vantaa hub and its global non-stop connections.
- We must also ensure that Finnair can find sensible financing for its future investments. Finnair must be able to invest in a next-generation, energy-efficient fleet in a cost-effective way. To get such financing it is imperative that we are in a credible shape financially, and our shareholders support Finnair in its investment efforts.
Heinemann calls for an open dialogue on different ownership and financing solutions that are in line with shareholder interests, as the airline prepares for future investments. - In my opinion it would be good to have open discussion about different alternatives prior to any more severe pressures arising from crisis situations in the marketplace. To finance the necessary aircraft investments and to forge possible equity partnerships, we need to also openly consider flexibility from the equity point of view. I fully understand that such discussion will not be easy, because any Finnair dialogue always involves so much emotions and mixed views.
- I am asking you to keep an open mind and consider shareholder issues that Finnair’s development might require, so that Finnair would have the opportunity to favourably develop its operations, Heinemann says.
CEO Pekka Vauramo: Finnair is at a watershed - crucial to return profitability, even if the change is painful
In his own speech, Finnair CEO Pekka Vauramo emphasizes the results of Finnair’s Asian strategy and the importance of continuing with the strategy. - It is thanks to our Asian strategy that we can offer Finns global air connections that are far better than the size of the country would merit, and maintain domestic air connections.
- These strong connections support the global expansion of Finnish export industry, and also support foreign investments in Finland. The connection between Finnair's success and the GNP of Finland is clear. Our Helsinki Airport home hub is the second largest cluster of jobs in Finland, Vauramo says. - However, we are now at a watershed, as Finnair cannot survive its future challenges with the current cost structure. This is why Finnair is undergoing probably the largest and the most painful change in the company's history.
-Year 2013 showed clearly that our finances cannot take even the smallest of surprises, due to the problems with our cost structure. We faced more headwind than we expected, says Pekka Vauramo. - We have now set profitability as our number one objective. Without profitability, we have no prerequisites for growth. Only once we have solved our problems can we grow and employ. This is why it is crucial to implement our savings program.
- The transformation and savings plans announced today target personnel related costs, as many of the salary and work time structures date from the era of a closed market. Negotiating these to the level that corresponds with the current market practise is, understandably, a challenging task. We a strongly committed to achieving the savings for Finnair's future.
-I want to believe that we can find a solution that is the best possible one for Finnair and our personnel. At the same time I must say that if we do not find a solution in the negotiations, we must unfortunately take alternative actions to fix our cost structure. We have today announced what those actions would be, Vauramo says. - Nevertheless, I hope we will find the future way for Finnair in agreement together.
Full videos of the AGM speeches of the Chairman of the Finnair Board and the Finnair CEO will be available on Finnair internet pages later this week.
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