How Finnair got it wrong in China?
04/25/2019|9:51:15 AM|Skift

Finnair’s plans to take a greater slice out of the growing Chinese travel market have suffered a setback after the airline group’s plan to focus on individual travelers failed to pay off.

CEO Topi Manner, who joined the company at the start of the year, said the company got it wrong in 2018 when it moved to target higher-yielding single passengers.

“[In] China, about a year ago, we also sort of made the decision to test and focus more on individual travel out of China, especially in some cities. And that…has only partially been successful for us,” Manner said Wednesday on an earnings call after the release of the company’s first-quarter results.

Finnair failed to fully consider the restrictions on individuals getting visas and passports in the European Union. While it might not be as cost effective using travel agents, until Europe fully liberalizes its visa policy, it might be a safer distribution strategy.

Thanks to Finland’s advantageous position in northern Europe, the airline is able to offer good connections to China and other parts of Asia, and these routes supply the majority of the company’s passenger revenue.

Finnair made a pre-tax loss of $54.3 million (€48.5 million) in the three months to the end of March 2019, compared with a profit of $18.8 million (€16.8 million) in 2018.

Revenue grew 5% to $752.8 million (€672.9 million) but increased operation costs and higher fuel prices counteracted this.

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