Finnair Plus - Finnair's President & CEO Resigns

Source: http://www.finnairgroup.com/group/group_11_1_1.html?&Id=hex_200908070000404593.html

Finnair Plc Company Announcement FINNAIR'S PRESIDENT & CEO RESIGNS

FINNAIR PLC STOCK EXCHANGE RELEASE 7 AUGUST 2009 AT 0901

Finnair's President & CEO Jukka Hienonen has resigned from his post.

My four years in Finnair's service has included both periods of success
as well as the increasingly adverse development of the entire sector, and now a clear change of course is required. I am not satisfied with the results achieved; the rate of change has been insufficient, says President & CEO Hienonen.

Many structures as well as the company's culture have been formed in totally different conditions. With these we cannot do well in the present competitive environment, but changing them has proved to be extremely difficult. Some personnel organisations have shown no willingness to adapt.

Finnair has a good and effective strategy, on which it would be possible to build future success. It will require a lot of work and also a completely different way of thinking in terms of working conditions. Finnair has many expert personnel and an excellent management team, with whom I have been able to work. I wish to extend to them my warm thanks.

Finnair's Board of Directors regrets Jukka Hienonen's resignation. The decision is entirely President & CEO Hienonen's own. I am sorry at his decision, because cooperation between Jukka and the board has always been excellent, says Christoffer Taxell, Chairman of Finnair's Board of Directors.

Jukka Hienonen continues as President & CEO for the time being. The period of notice in Hienonen contract is six months. Because Hienonen's resignation is at his own request, no severance pay will be paid.

Finnair Plc

Communications
7 August 2009

So what does it mean in clear wording? He resigned because....? Couldn't push through all changes he wanted?

Interesting to see who will follow him and what course AY will take!

Haven't appreciated Hienonen's cutbacks to the Finnair product, but I have to raise my hat (if I had one) that he resigned for a good reason and without expecting any compensation. Kind of started to like this guy.

Quite heavy stuff in the Helsingin Sanomat today from the ex-CEO to become about Finnair...

"The prevailing structures here (in Finnair) have born in entirely different circumstances and for entirely different needs. They simply have to be changed."

"Having been employed as an executive in the private sector it has been very difficult for me to understand, why the collectives have to be as thick as the Bible and why one has to be almost a professor of labour justice to interpret the content of those. Or why the wage conditions of some groups of employees can include up to 200 different special increases."

"In listed companies, there are three groups of interest whose benefits must be taken into account: the clients, the staff, and the shareholders. In Finnair the emphasis has - in distorted manner - shifted to benefit mainly the staff."

CEO Hienonen quipped to the pilots by telling about "the test sleeping committee" which inspects beforehand the hotels that might be suitable for the Finnair staff. "I find it very difficult to believe that a similar arrangement would exist in Nokia".

"Once upon a time, the ticket prices were decided in the annual meetings of IATA, but these times are history. Some however wish to think, that nothing has changed."

Hienonen will not receive a special severance pay, because he chose to resign voluntarily. "Of course I could have turned difficult, when the board would have had to sack me. That would have resulted in some nice personal earnings", Hienonen joked.

I got to know about Mr.Hienonen's inglorious exit while at the HEL Silver Wings lounge coming in from a longhaul.

On the following European hop the cabin staff seemed not to be too affected to see him go. Neither am I, he failed his task. He can explain all he wants but it was a failure. Had the unions been approached differently than his typical Finnish bulldozer style, they might have gone along.

Btw, a bus gate both when arriving from the longhaul at HEL and on European departure and arrival. One of Mr.Hienonen's legacies?

Hienonen has his point. A small airline of a small country can not have an outdated infrastructure and small labour unions here should not be sawing the thin branch they are sitting on. Those being paid less would have been willing to sacrifice at difficult times and those being paid much most definitely not. Evidently, the first cuts will affect the domestic network. Lucky to have Blue1 as an alternative.

As the Finnish government still holds majority of the shares, major changes are to be expected in the near future. I expect the customers to benefit from that.

Bussing has more to do with Finnavia running the HEL airport and shortage of jetways than Finnair. Hopefully the new terminal arrangements (split by the airline nowadays) and opening of the new non-Shengen part will help in that.

Haven't appreciated Hienonen's cutbacks to the Finnair product, but I have to raise my hat (if I had one) that he resigned for a good reason and without expecting any compensation. Kind of started to like this guy.
+1

Whatever we all think about his management style, at least he had the integrity to resign for nothing.
Dont find much of that in the UK :rolleyes:
Here, it is do a huge compo deal to avoid being sacked.
(Boss of one bank in particular springs to mind, but there are plenty of lesser cases as well).

Unless, of course, he has been "poached", and all that about failing to "drive through change" is a smokescreen :D

One of the newspapers mentioned him saying that there are some pilots who fly a few times a month and still make over 200,000 euros a year in salary.

It would be useful for the Finnair staff to look what's been happening to the paper industry in Finland. We still have companies doing world-class paper technology but all the customers and business is elsewhere. The finnish paper giants are closing factories here as they get old and all the new business is built elsewhere.

It would be useful for the Finnair staff to look what's been happening to the paper industry in Finland. We still have companies doing world-class paper technology but all the customers and business is elsewhere. The finnish paper giants are closing factories here as they get old and all the new business is built elsewhere.

Not comparable, IMHO. The investments that AY has made seem sensible and the key global markets are well covered. Daily flights to Beijing, Hongkong, Shanghai and Tokyo from the major European business hubs should be a winning strategy.

Maybe the next CEO could be from one of the key markets, say a Brit or a German? Or maybe someone with experience from airline management in China?

In yesterday's Iltasanomat (?) he is quoted to wonder among others how on earth AY can have a special committee that goes around the world test-sleeping the hotels AY crews are using. Telling the truth, it makes me wonder as well. I guess Hilton/Marriott/IC has a hotel in all/most destination AY crew overnight, so why not make a global deal with on or two of these? Ah, the unions, sorry.

Also he is quoted as saying that there are employees who think Finnair exists for them.

Finnair is flying on some potentially highly profitable routes on the Europe - Asia axis:

MAN - HEL - DEL/HKG

DUS - HEL - ICN/HKG/PVG/NRT

HAM - HEL - DEL/ICN/PEK/PVG/NRT

OSL - HEL - ICN/HKG/KIX

etc.

If an airline cannot make enough profit out of those given facts, then the management cannot be seen as having succeeded.

Not comparable, IMHO. The investments that AY has made seem sensible and the key global markets are well covered. Daily flights to Beijing, Hongkong, Shanghai and Tokyo from the major European business hubs should be a winning strategy.

Emphasis on the word "staff" in my OP. The paper industry could do just fine in Finland but the employees and the unions are killing the industry.

Finnair's strategy isn't killing the airline, the employees and the unions are.