Finnair (AY, Helsinki Vantaa) majority shareholder, the Finnish government, will dispose of a 2.3% stake in the carrier to help finance a new incentive plan for the company's 700 pilots. The state currently owns a 55.8% shareholding in the airline.

"The State undertakes to sell to the market, three million of its Finnair shares for the price of at least EUR4, in the spring of 2019," Helsinki said in a statement.

Agreed to by the airline board and the Finnish Air Line Pilots' Association (SLL), the savings plan will run from 2015 to 2018 and will see the airline make EUR17million (USD21.45million) in annual savings through cutbacks in return for pilots agreeing to a share price-linked incentive scheme.

"In addition, the company share price must at least be EUR4 (USD5.08) at the end of the incentive plan. If these conditions are met, the pilots are entitled to a cash payment," the carrier said. "The amount of the payment is based on the Finnair share price. The total reward to pilots amounts to EUR12million if the share price is EUR4 or a maximum of EUR24million, if the share price reaches at least EUR8. Divided over the four year period, the annual earnings potential for an individual pilot is equivalent to 5-10% of annual base salary."

Finnair says the cash reward will be paid to pilots in spring 2019, provided that the aforementioned performance criteria are met.

At the time of the plan's announcement, Finnair's stock was trading at EUR2.45.