HELSINKI- Finnair (AY) has announced plans to furlough 36 pilots following Qantas Airways’ (QF) decision to reduce their wetlease partnership by half. The Finnish flag carrier blames ongoing industrial action by its pilots’ union for the Australian airline’s decision to scale back operations.
The dispute centers around contentious wage negotiations, with Finnair pilots refusing to accept new work rules and implementing an overtime ban that has disrupted flight schedules. Jaakko Schildt, Finnair’s chief financial officer, described the situation as “unfortunate for all parties” as the carrier faces significant operational challenges.
Photo: FinnairFinnair to Furlough 36 Pilots
Qantas and Finnair established their wetlease agreement in 2023, utilizing two Finnair Airbus A330 aircraft to operate routes from Sydney (SYD) to Singapore (SIN) and Bangkok (BKK). While Qantas provides cabin crew, Finnair supplies pilots who typically live in Helsinki and travel to Asia to begin their rotation.
The ongoing protests by Finnair’s pilot union, including a refusal to work standby duties, have created scheduling problems as pilots fail to reach Bangkok and Singapore on time.
These disruptions have directly impacted Qantas’ operations, prompting the Australian carrier to reduce the partnership to just one aircraft through the remainder of the contract, which extends to 2027.
Earlier this year, Finnair warned that failure to reach an agreement with its pilots could result in Qantas terminating the wetlease agreement completely, potentially eliminating 90 pilot positions.
While Qantas hasn’t canceled the arrangement entirely, its decision to scale back represents a significant blow to Finnair’s operational strategy.
Photo: By lasta29 – Finnair, A330-300, OH-LTO, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=42863972Understanding Wetlease Agreements in Aviation
Wetlease agreements, commonly known as ACMI (Aircraft, Crew, Maintenance, Insurance) contracts, are standard business arrangements in the aviation industry. Under these agreements, one carrier provides an aircraft with a crew to operate flights on behalf of another airline.
These partnerships typically arise when airlines need additional capacity due to seasonal demand increases or engineering issues with their own fleet. The Rolls-Royce engine problems affecting certain Boeing 787 Dreamliners have led many carriers to seek wetlease solutions in recent years.
Finnair’s arrangement with Qantas is somewhat unusual, as established passenger airlines rarely provide wet-lease services themselves. This strategic pivot came as a direct response to Russian airspace closures, which left Finnair with surplus widebody aircraft due to range limitations on its traditional Asian routes.
Photo: Photo: avgeekwithlens/ Harsh TekriwalRisks of Finnair’s Business Strategy
Finnair’s decision to enter the wetlease market represents a calculated business risk that now appears to be backfiring. While wetlease agreements can provide valuable revenue streams, they often lack long-term security, with contracts frequently containing clauses allowing for early termination, PYOK flagged.
The Russian airspace closure forced Finnair to adapt its business model quickly, but the ongoing labor disputes have undermined this strategic shift.
The airline’s inability to maintain consistent service for Qantas demonstrates the vulnerability of depending on wet-lease arrangements for financial stability.
The furlough of 36 pilots marks a significant setback for Finnair as it attempts to navigate the challenging post-pandemic aviation landscape while managing contentious labor relations. The airline must now reassess its operational strategy as it faces reduced demand for its wet-lease services.
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The post Finnair to Furlough 36 Pilots After Qantas Cuts Deal appeared first on Aviation A2Z.
