by Josh Lew
Last updated: 8:00 PM ET, Tue December 22, 2015
Photo courtesy of Finnair
Sometimes long-haul success is a matter of economics, or a matter of service. Sometimes you just get lucky by being in the right place.
Finnair has found success in the long-haul marketplace by taking advantage of its unique geographic location to connect Scandinavia with East Asia. By flying over the Arctic, its planes can get between Finland and Japan, Korea or China more quickly than their competitors.
Building towards long-haul success
This focus on long-haul flights has given Finnair a business model that is not unlike the one that made Emirates so successful. If travelers in Europe see Finnair as the best and fastest way to get to the Far East, they will opt for it instead of choosing a more roundabout service.
It is true that Helsinki is growing as a tourist destination and people are interested in traveling to other parts of Finland as well. However, many fliers could just travel to the country to catch a connecting Finnair flight to their final destination in Asia without passing through immigration at all. This is the same type of scenario that occurs with Emirates in Dubai.
Comparisons with Emirates
Finnair's CEO even made a joke about the comparison with Emirates during an interview: "We're a Gulf carrier -- but from the Gulf of Finland."
Finnair's strategy is interesting. It means that it will not have to compete with the low-cost carriers that dominate the European marketplace. Indeed, these low-cost carriers may even make FInnair's long-haul routes more accessible by making it cheaper and easier to get to Helsinki from Europe's other capitals.
The short-term results of this Emirates-like strategy are good. Finnair posted its highest-ever profits during the third quarter of 2015. Of course, low fuel prices played a big part in this. Things look promising in the long run as well. By the middle of next year, Finnair will fly to 16 cities in the Asia Pacific region.
Its biggest competitor, SAS, only has four destinations in Asia (and only nine long-haul routes total). Finnair execs have also pointed to the projections that suggest that the number of fliers in Asia will have doubled between 2010 and 2020.
Finnair's success draws investor interest
Another sign of Finnair's future success is that it has perked the interest of investors. The airline could end up being bought by a "parent company." It would be able to operate under the same brand and strategy that it now has, but there would be a safety net - more funding to keep operating in bad times. Finnair slumped in 2011 following the earthquake and nuclear leak scare in Japan. China's economic woes could also affect the demand on Asia-Europe routes.
Some have speculated that IAG, the parent company of Aer Lingus and British Airways, could be interested in buying a majority stake in Finnair.
For now, Finnair can build on its "Gulf carrier" business model and provide service between Europe and Asia that other airlines on both continents will have a hard time competing with.
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