Finnair Cargo flying high on ambition
Finnair Cargo is coming in from the cold. The Finnish carrier will open a new central European hub this month at Brussels as a supplement to its main Helsinki base.
The migration south will also provide the opportunity for the airline to enhance its U.S. freighter service, with the start of a new weekly rotation to Chicago, in addition to an existing New York service.
Paradoxically, explains Juha Järvinen, managing director of Finnair Cargo, the westbound route development and the move to Brussels is all about strengthening the carrier’s credentials in the Asian market.
“We already have a very strong position in Asia, given that we can offer the shortest flying times of any European carriers from our Helsinki hub,” Järvinen says. “But we felt it was essential to make our presence more strongly felt in the European market and made the decision to establish a secondary cargo hub at Brussels.”
Finland is a fully paid-up member of the European Union, but as such sits at its very northern periphery. Although Järvinen does not admit as much, there is perhaps a sense that the Nordic carrier was finding it difficult to maintain a strong marketing profile from the European sidelines.
Also, the carrier’s home Nordic market has been weakening.
“We have been seeing a big switch by major Nordic manufacturers from air to ocean freight, and this business will not return,” Järvinen says. “This is not just about cost differentials, but also reflects better inventory control and more efficient logistics processes.”
Even so, he says the Finnish airfreight market survived last year relatively intact with just a 4 percent drop in volumes.
“It was the Swedish market which saw the biggest fall-off, down by nearly 20 percent,” Järvinen says. “But this disguises the fact that a lot of traffic is being consolidated outside of Sweden, particularly via Denmark and Germany.”
The choice of Brussels for the new European hub operation, he says, was no idle stab of the pin in the map.
“Brussels offers an ideal location close to key manufacturing regions in Benelux, the North of France and Western Germany, as well as an excellent road feeder network to a large catchment area,“ Järvinen says. “It is also Europe’s largest pharmaceutical hub, a sector which we are targeting as our largest growth segment. We already have dialogue ongoing with a number of pharmaceutical industry players, and our target is to become their preferred airline out of Brussels.”
Finnair Cargo, he says, aims to double its turnover on Asian routes by 2020 and, along the way, become a top five cargo carrier between Europe and Northeast Asia. “By adding Brussels to our freighter network, we can offer excellent, fast and reliable cargo service from Continental Europe to 14 Asian destinations and vice versa,” Järvinen says.
He quickly adds a caveat to that last ambition, saying the aim is to become a top five carrier “of choice” among forwarders, rather than by measure of market share.
Indeed, Finnair Cargo’s ambitions would in some respects appear to be greater than its reality mass.
As of April, with the new Brussels cargo hub up and running, Finnair Cargo will be operating weekly MD-11 freighter flights connecting Brussels with Helsinki, New York JFK and the new destination of Chicago O’Hare. In the opposite direction, it will maintain existing twice-a-week freighter service to Hong Kong and Mumbai in India.
It will be a very extended freighter operation for the Finnish carrier given that, remarkably, it will be maintained by just a single MD-11F aircraft. That is reflected by the fact that Brussels will, in the near term, only see an outbound flight to Chicago, which will return by way of Helsinki. Similarly, the New York service will only operate inbound to Brussels, with the outbound sector originating in Helsinki.
Järvinen is insistent that the airline has got its strategy right.
“The whole focus of the operation, including our U.S. service, is about building our presence and market share in Asia,” he says. “Because of the shorter flying times from Helsinki to Asia, we can achieve with one freighter what other European carriers require two aircraft to maintain.”
He provides the example of Mumbai, which he says can be reached in just six hours from Helsinki.