Korea emerges as strategic hub for Finnair’s growth in Asia

Finnair's A350 passenger jet / Courtesy of Finnair

Finnair hopes to expand capacity here

By Lee Min-hyung

Ole Orver, chief commercial officer at Finnair / Courtesy of Finnair

Finnair has identified Korea as one of Asia’s most strategic markets, with demand for the country on the gradual rise due to its growing cultural and economic influences abroad, top executives from the flag carrier of Finland said during a recent interview.

They displayed strong affection for Korea, as the country comes with bigger potential for further growth, compared to other Asian markets, such as China and Japan.

Finnair offers seven direct flights connecting Incheon and Helsinki each week, and it started flying to Korea 15 years ago.

“During the pandemic, all the demand for passenger flights disappeared, but demand for cargo was strong, and the very first cargo-only flight we flew was to Seoul, which was Mar. 28, 2020,” Ole Orver, chief commercial officer at Finnair, told The Korea Times during the interview.

“We carried important goods from Seoul to Europe, and this is a sign of the importance of Korea to Finland, and Finland to Korea,” he said.

Finnair Korea General Manager Kim Dong-hwan also spoke highly of the growth potential of the Korean market, citing the country’s growing cultural profile across the globe.

“We believe there is more growth potential in Korea, compared with the two other Asian markets,” he said. “This is because of Korea’s increasing cultural influence, as K-pop, K-culture and K-movies spread across the world and those are getting stronger day by day. Demand from Europe to Korea has been highly increasing.”

Ole Orver, chief commercial officer at Finnair, introduces its growth strategy in Korea during a press conference in Seoul, Nov. 9. Courtesy of Finnair

Finnair is also seeking to attract more Korean customers to the Northern European nation by enhancing its in-flight services. According to the airline, it hired a total of 26 Korean flight attendants this year alone. Two Korean flight attendants are typically on board the airplane while operating routes from Korea to other countries, but Finnair decided to double the number for the Incheon-Helsinki route in November, in a move to increase its market share here.

The company also recently clinched an agreement with Hana Tour, the largest travel agency in Korea, to develop new travel products sustainably.

Finnair generated almost half of its sales in Asia during the COVID-19 pandemic, but the figure fell to around 30 percent for the time being. Finnair aims to normalize sales in Asia by strengthening marketing and clinching partnerships with companies here. As part of that effort, the airline recently invested 270 billion won ($207 million) to renew cabins for the A350 and A330 passenger jets, which it said will help serve Korean customers better.

The airline is leaving open the possibility of launching another route to Korea connecting Helsinki and Korea’s southern port city of Busan. The plan was introduced in 2020, but the outbreak of the pandemic forced the airline to delay it.

Finnair Korea General Manager Kim Dong-hwan speaks during a press conference in Seoul, Nov. 9. Courtesy of Finnair

Regulatory hurdles

The Finnair executives went on to express their hopes for more deregulation while operating their business here.

“We wish to expand capacity here,” Kim said. “Of course, every country has its own regulations and policies. We fully understand that the Korean government protects Korean entities and Korean companies.”

But Finnair is facing a tough time in increasing its capacity, as Korea has yet to clinch the Open Skies Agreement with the European Union (EU), which is not the case for Japan.

“We do not have the agreement yet, so there are a lot of restrictions in terms of capacity increase not only for us, but other foreign airlines,” Kim said.

Under the EU-Japan Open Skies Agreement, all EU carriers can access routes between the two regions without any regulatory hurdles, enabling them to engage in more open and fair competition while operating flights to Japan.

Korean Air, Asiana deal

The commercial chief at Finnair also conveyed his hopes of Korean Air reaching a middle ground with the European Commission (EC) over the flag carrier's acquisition of Asiana Airlines.

The issue is one of the hot potatoes in the global aviation industry and has hit a snag for around three years after Korean Air unveiled the plan to take over the cash-strapped airline.

The EC is reviewing a remedied proposal from Korean Air after the regulator urged the airline to rectify its earlier plan and guarantee fair competition. The remedied plan included the sale of Asiana’s cargo business.

“It is vital for both Korea and the European authority to find ways to strengthen connectivity between the two territories,” the commercial head at Finnair said.

“On our side from Finnair, we fully trust that both sides will work together on the issue and reach the best possible solution for the benefit of customers, whether it is Korean customers or European customers.”