Given an expected lengthy period of recovery, Finnair (AY, Helsinki Vantaa) will commence talks with its staff about further job cuts but did not say how many positions it plans to eliminate.
The Finnish flag carrier said it will start a consultative process with all 6,100 of its Finland-based employees. The airline is contemplating both temporary and permanent lay-offs. Cuts will also affect employees based in other countries, although the procedures will differ based on local law.
"It is clear that as we fly significantly less, the amount of work available is lower than normally as well. The gradually growing traffic program will increase also resource needs in due course... The return to normal will take a considerable time. That is why the temporary layoffs we now start negotiations on unfortunately seem to be inevitable," Senior Vice-President (People and Culture) Johanna Karppi said.
Finnair said that variable costs constitute around 60% of its total expenditures.
The airline also said that its planned restructuring will extend beyond job cuts. Finnair hopes to permanently reduce its fixed costs by around EUR80 million euros (USD87 million) per year as of 2022, compared to 2019. The airline said that it will review its internal processes and negotiate with suppliers to cost real estate costs, aircraft leasing costs, compensation structures, sales and distribution costs, IT costs, and administration costs.
Finally, the airline said that it had secured a EUR600 million (USD655 million) pension premium loan. The Finnish government will guarantee 90% of this loan, while the remainder will be provided on commercial terms from an unnamed private bank.
