Finnair signs agreement on outsourcing of cabin service

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Finnair signs an agreement with OSM Aviation on outsourcing of cabin service

Finnair and the Norwegian crew management company OSM Aviation have signed an agreement on outsourcing of cabin services. In the first phase, OSM Aviation will provide cabin service for Finnair's routes to Hong Kong and Singapore. The cabin crew for these routes will be recruited to OSM Aviation's bases in Asia. The parties intend to expand their cooperation in the future in both long-haul and short-haul traffic.

Finnair has tried to negotiate cost savings with its cabin personnel since 2011. The savings negotiations ended in spring 2014 with no result, and Finnair said in June that the company will go ahead with cabin service outsourcing according to the plans discussed in employee codetermination proceedings. The aim is to build a healthy cost structure for Finnair and enable profitable growth, which would also create new jobs.

"We have done our utmost to find cost savings together with our personnel, but the long path of negotiations ended with no result," explains Ville Iho, Chief Operating Officer of Finnair. "The costs of the terms and conditions of our cabin crew far exceed the level of the general collective labor agreement of Finnish Cabin Crew Union. As a loss-making company, we cannot continue to pay a Finnair premium. We must get our costs to a competitive level. Unfortunately we were not able to do this through negotiations with the union, and that is why we must now on certain routes change our role from providing a service to buying a service."

"OSM Aviation has aviation experience and they are able to offer us a reliable and high quality service at a competitive price," Iho says. "We will continue discussions with other partner candidates as well. We seek also solutions that would enable jobs to be maintained in Finland."

Finnair aims to start using outsourced cabin service on its Singapore and Hong Kong routes in the first quarter of 2015. The personnel impact of this outsourcing to Finnair's operations in Finland is approximately 100 personnel years. Outsourcing of the routes effects also to our approximately 80 regional cabin crew members working for Adecco, as their work on Finnair routes will end.

Finnair has said it plans to outsource cabin services on a total of approximately 20 long-haul and short-haul routes in the next two years. These actions are a part of Finnair's 200 million euro savings program, which was launched in 2011. Finnair's goal was to achieve permanent annual savings of 18 million euros through negotiations with cabin personnel, but the negotiations ended without a result.