Finnair Oyj (FIA1S), Finland’s biggest airline, said it plans to cut 280 jobs and outsource engineering operations to trim costs.
SR Technics, based in Zurich, will provide engine and component services as the carrier plans to close its own engineering works, Vantaa, Finland-based Finnair said in a statement today. Cost savings will be “significant,” Finnair said, without giving details.
Finnair is targeting 140 million euros ($183 million) of cost cuts by 2014 as pressure from low-cost airlines squeezes profit. The carrier has established more routes to Asia to tap the growing business travel from the emerging markets.
Line maintenance, which “forms the core of aircrafts’ airworthiness” and employs 550 people, remains an “integral” part of the company’s operations, Finnair said. The stock (FIA1S:US) was unchanged as 2.27 euros at 11:09 a.m. in Helsinki, giving the airline a valuation of 291 million euros.
Finnish trade union Pro, which represents managerial employees in the engineering unit, will hold a press conference at 2 p.m. in Helsinki on the cuts.
To contact the reporter on this story: Kati Pohjanpalo in Helsinki at firstname.lastname@example.org
To contact the editor responsible for this story: Tasneem Brogger at email@example.com