Finnair SWOT & PESTLE Analysis
COMPANY PROFILE -Finnair
Business Sector :Aviation
Operating Geography :Finland, Europe, Global
About Finnair :
Finnair is a network airline that specialises in passenger and cargo traffic between Asia and Europe. It was founded on 1 November 1923 by Bruno Lucander. It is headquartered in Vantaa, Finland on the grounds of Helsinki Airport. It offers package tours under its Aurinkomatkat-Suntours and Finnair Holidays brands. Helsinki’s geographical location gives Finnair a competitive advantage, since the fastest connections between many European destinations and Asian megacities fly over Finland. The Finnair fleet consists of over 80 aircraft, most of which are Airbuses. Its fleet is one of the most modern in Europe which produces less emissions and offers better travel comfort on its flights. As of 2020, Finnair flies to over 100 destinations in Finland, Europe, Asia and North America via its transfer-friendly Helsinki hub. The company has been awarded a 2019 Five Star Global Airline rating by the Airline Passenger Experience Association.Finnair is a network airline that specialises in passenger and cargo traffic between Asia and Europe. It was founded on 1 November 1923 by Bruno Lucander. It is headquartered in Vantaa, Finland on the grounds of Helsinki Airport. It offers package tours under its Aurinkomatkat-Suntours and Finnair Holidays brands. Helsinki’s geographical location gives Finnair a competitive advantage, since the fastest connections between many European destinations and Asian megacities fly over Finland. The Finnair fleet consists of over 80 aircraft, most of which are Airbuses. Its fleet is one of the most modern in Europe which produces less emissions and offers better travel comfort on its flights. As of 2020, Finnair flies to over 100 destinations in Finland, Europe, Asia and North America via its transfer-friendly Helsinki hub. The company has been awarded a 2019 Five Star Global Airline rating by the Airline Passenger Experience Association.
Finnair Revenue :
EUR 3,097.7 million – FY ended 31st December 2019 (y-o-y increase of 9.2%)
EUR 2,836.1 million – FY ended 31st December 2018
Competitive Analysis of Finnair
| 1. Cooperation with Oneworld partners in joint businesses 2. Implementation of artificial intelligence to come up with a pioneering forecasting solution 3. Unrivalled local network and attractive market for incoming tourism 4. Continuous focus on fuel efficiency of Finnair fleet 5. Comprehensive product portfolio allowing customers with range of choices 6. Strong operational performance and safety record | 1. Alcoholism cases among Finnair's cabin crew members impacting brand |
| 1. Investments in the expansion of different business classes foproviding customer experience 2. Expansion of the network of airline routes and destinations (capacity) 3. Growth of tourism in the Nordics region | 1. Aggressive competition in the tour industry leading to bankruptcy 2. Major impact of Covid-19 on the aviation industry and Finnair 3. Susceptibility to macroeconomic fluctuations such as foreign currency exchange rates and fuel costs |
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Detailed SWOT Analysis of Finnair
Strength
1. Cooperation with Oneworld partners in joint businesses: Finnair adopts several initiatives in order to increase the resilience against external market-related factors. One of them being joint businesses, strengthens Finnair’s position in the market by reducing the growth-related risks, thereby contributing significantly to its revenues. This position is leveraged by the company’s engagement and closer cooperation with certain Oneworld partners. By participating in joint businesses, namely the Europe-Japan flight, Siberian Joint Business (SJB), and the Europe-North America flight, Atlantic Joint Businesses (AJB), the company strives to make more route and pricing options available for the customers. For the airlines, entering into joint businesses is considered as one of the ways to gain the advantages typically associated with consolidation. In 2019, Finnair’s revenue growth was close to capacity growth in both the joint businesses, thereby leading to better development within the joint business traffic.
2. Implementation of artificial intelligence to come up with a pioneering forecasting solution: Finnair has leveraged the use of advanced technologies like artificial intelligence to deal with the risks associated with unpredictable situations and thereby has developed more agile competencies. Even though the physical risks arising from climate change effects cannot be controlled by the company, Finnair has the core capabilities for accurate and reliable forecasting and crisis response as well as for improvement of events and trends monitoring. This can be seen from the flagship weather forecast solution development by Finnair along with its partner, based on artificial intelligence. The company has been pilot testing this solution since 2018. In addition to this, the geographic location of the home base of Finnair, Helsinki Hub, is less exposed to weather risks and natural incidents.
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Weakness
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Opportunity
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Threats
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Major Competitors :
- Virgin Atlantic Airways
- Aegean Airlines
- Alitalia
- LOT
- S7 Airlines
- Jet2
- Ryanair
- Pegasus Airlines
- Volotea
- SAS
- Mexicana Airlines
- TAM Airlines
- Air Moldova
- Air Malta plc
Major Brands :
- Finnair
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References used in Finnair Analysis Report
1. FINNAIR CAPITAL MARKETS DAY -
https://investors.finnair.com/~/media/Files/F/Finnair-IR/documents
/en/reports-and-presentation/2019/finnair-cmd-2019-handout.pdf
2. Growing Drinking Problems' Revealed at Finland's Top Airline -
https://sputniknews.com/europe/201808311067624051-finland-finnair-drinking-problem/
3. Finnair reveals the completion of its flagship non-Schengen lounges -
https://company.finnair.com/en/media/all-releases/news?id=3523201
4. Impacts of COVID-19 on aviation and the airport business -
https://www.internationalairportreview.com/article/117249/covid-19-airport-business-aci-world-recovery/
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Finnair SWOT and PESTLE analysis has been conducted by Anindya Anindita and reviewed by senior analysts from Barakaat Consulting.
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