Finnair & Flybe Announce Termination of All Joint Operations

Finnair and Flybe plan to terminate all joint operations by the end of 2014, transitioning all operations back to Finnair in 2015.

After nearly 3 years of working together to restructure the regional and domestic operations, Finnair and Flybe have announced plans to terminate all joint operations by the end of 2014 and transition all operations back to Finnair in 2015.

This marks a full reversal of the changes Finnair initiated to turnaround their feeder operations in the quest to run a profitable network airline. While Finnair is highly profitable on their long-haul operations, which provide a unique service to North Asia, the regional operations are under extreme pressure from low-cost competitors like Norwegian Airlines, which cherry picks prices to compete on high-volume destinations.

To mitigate the costs, Finnair took the dramatic step of handing over its domestic destinations, operated previously by its Finncom partner with ATR turboprop aircraft, as part of a joint venture with Flybe. The regional destinations served by the Embraer 195 fleet were spun off entirely into the same joint venture in order to provide the same service under the Finnair brand.

“The commercial flights were heavily loss-making and Flybe wanted to turn those into contract flights or make heavy cuts,” Finnair CEO Pekka Vauramo told Bloomberg. “We couldn’t accept that.”

[Photo: Flybe]