The primary Finnish airline company, Finnair, has announced that it will discontinue five of its domestic routes by Spring 2021. Finnair's decision was heavily influenced by the COVID-19 crisis and related travel restrictions, although the cancelled routes had already been challenging in terms of profitability before the pandemic. This article examines these changes to the domestic aviation market and other initiatives established due to the ongoing pandemic.
To reduce losses following the COVID-19 crisis, primary Finnish airline company Finnair has suspended many of its loss-making domestic flights to eastern and western Finland. One possible way to save the suspended domestic flight routes would be for the government to provide direct state aid to airlines that wish to operate them. However, such state aid would require EU Commission notification and approval.
The Finnish state (which is Finnair's majority shareholder) has provided a guarantee of up to €600 million to assist Finnair in strengthening its financial position and mitigate the impact of the COVID-19 pandemic. This did not go unnoticed by Finnair's competitors – Ryanair challenged the guarantee given by the Finnish state, alleging that the guarantee constitutes unlawful and discriminatory state aid in accordance with EU state aid rules.
Finnair recently announced that it is cutting 90% of its normal flight capacity due to the COVID-19 outbreak and consequently cancelling the majority of its flights temporarily as of 1 April 2020 until the situation regarding the coronavirus pandemic improves. The cancellation will affect between 1,500 and 2,000 flights from 16 March 2010 until 31 March 2020, with only critical air connections for Finland maintained.