Finnair cuts capacity 12 pct due to falling demand

Finnish airline Finnair reduces capacity 12 pct due to falling demand, warns of more cuts

• On 6:02 am EST, Monday November 9, 2009

HELSINKI (AP) -- Finland's national carrier Finnair Plc said Monday it slashed capacity by 12 percent last month to adjust to weaker demand and warned it will make more cuts this winter as the economic downturn continues to hit air travel.

The company said its overall traffic fell by 11 percent in October from the same month last year, while passenger numbers declined by more than 11.5 percent.

Even the Finnish airline's traditional growth area, Asia, saw dwindling numbers, with passenger traffic falling 12 percent.

"Capacity was optimally cut to match falling demand. Winter is expected to continue to be difficult, so further adjustments to traffic will be made," Finnair spokesman Christer Haglund said. "For leisure traffic in particular, the coming winter season will be tough."

Last month, Finnair PLC reported that third-quarter net loss wideneded 15 percent to euro21 million ($31 million) and warned it would take a long time before it became competitive again. Sales fell 22 percent.

The airline has announced 200 layoffs and said it will begin statutory talks with all its 9,000 personnel to initiate more cost-cutting measures. In June it said it would double a savings program to euro200 million -- with most of the new cuts aimed at personnel costs.

Finnair has also said it might introduce new charges for passengers, including for snacks on domestic flights or extra luggage.

The airline flies to 50 destinations with a fleet of 63 aircraft. Last year, 8.3 million passengers flew Finnair, down 4 percent from 2007.

http://www.finnair.com

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