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Finnair: Finnair's strategy review: Finnair to accelerate its growth

Finnair Plc Stock Exchange Release 12 May 2016 at 9:05 am EET

As a part of its annual strategy review, Finnair's Board of Directors
has defined the focus areas for 2016-2018 in order to achieve the
company's strategic objectives. These are:

· Profitable growth - Finnair seeks to grow slightly faster than its
previous targets and gain market share.

· Customer experience - the Company is developing its customer
service, aligned with its vision of a Nordic customer experience.

· People experience - Finnair is focusing on human resources
development as part of its growth and productivity strategy by
developing leadership, workplace community and occupational health
initiatives, competence and cooperation.

· Digital transformation - in developing its activities, Finnair
will utilise opportunities provided by digital innovations and best
practices in business transformation.

Opportunity in accelerated growth

Growth will support Finnair's profitability, as unit costs will
decrease with the delivery of larger and more efficient aircraft as
well as declining average staff costs due to new recruitment. Because
of its geographical advantage, Finnair is able to expand its Asian
traffic in particular more efficiently than its competitors.

The core of Finnair's growth strategy consists of the renewal of the
widebody fleet, for which Finnair is in the process of acquiring 19
state-of-the-art Airbus A350-900 XWB aircraft in 2015-2023. The new
aircraft will entirely replace Finnair's A340 fleet, which numbered
seven aircraft last year, and supplement the current A330 fleet.

According to the strategy update approved by the Board of Directors,
growth can be accelerated if market circumstances remain favourable.
Finnair would expect to deploy this additional capacity on new routes
or new frequencies in its current long-haul traffic areas, Asia and
North America.

Customer experience, people experience and digital transformation to
support growth

Finnair's vision is to offer its customers a unique Nordic experience.
An outstanding customer experience improves customer satisfaction and
loyalty, which promotes positive revenue development. Finnair is
developing both its business and economy class products, as well as
its customer service, focused on a high quality of customer service
in all customer interactions.

The availability and retention of skilled personnel is key to the
implementation of Finnair's growth strategy. Last year, Finnair
announced it would recruit approximately one thousand new employees
between 2015-2020 to accommodate growth and to replace retiring
personnel. New recruitment is mostly focused on pilots and cabin
crew, while in support functions, the objective is to improve
productivity. Since the announcement, the company has already hired
over 500 employees and now estimates it will recruit a further 900 in
2016-2018. At the same time, the reduction in the average tenure of
the flight crew will reduce average wage costs, as the wage level of
the new staff will be significantly more moderate than presently. In
addition, Finnair is taking new measures to improve leadership and
wellbeing at work to secure the motivation and working capacity of
its entire workforce.

The importance of digitalisation in the airline business is
increasing, since customers increasingly engage with airlines through
electronic and mobile channels. The connectivity of aircraft to
information networks also provides significant opportunities for
retail trade and the sale of services in-flight. In accordance with
its previous plan, Finnair will install wi-fi throughout its whole
widebody fleet and its Airbus narrowbody fleet in 2016-2017. In
addition to commercial digital services, the company is undertaking
digital development of its entire operations to improve productivity.

In addition to the new focus areas described above, Finnair's
strategic and financial objectives remain unchanged, and efforts
concerning the focus areas communicated a year ago for 2015-2017
continue. These current objectives and other focus areas are
described in a stock exchange release issued on 7 May 2015:

Finnair Plc

Further information:
Finnair communications, tel. +358 9 818 4020, comms(a)finnair.com

Nasdaq Helsinki
Principal media

Finnair is a network airline specialising in passenger and cargo
traffic between Asia and Europe. Helsinki's geographical location
gives Finnair a competitive advantage, since the fastest connections
between many European destinations and Asian megacities fly over
Finland. Finnair's vision is to offer its passengers a unique Nordic
experience, and its mission is to offer the smoothest, fastest
connections in the northern hemisphere via Helsinki and the best
network to the world from its home markets. Finnair is the only
Nordic carrier with a 4-star Skytrax ranking and a member of the
oneworld alliance. In 2015, Finnair's revenues amounted to EUR 2,255
million and it had a personnel of 4,800 at the year-end. Finnair
Plc's shares are quoted on Nasdaq Helsinki.


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