Finnair benefits from SAS retreat and Middle East disruption

Finnair FIA1S.HE is seeing rising transit traffic on its Asian routes as rival SAS pulls back on some services and other airlines also grapple with disruption from the Middle East crisis, the Finnish flag carrier told Reuters.

Scandinavian Airlines (SAS), the Nordic region's largest carrier, made Copenhagen its main hub in 2024 following a post-pandemic restructuring in which the Swedish state exited its ownership. Air France-KLM AIRF.PA is now considering a controlling stake.

The overhaul has reduced direct long-haul services from Stockholm's Arlanda airport, despite Sweden being the region's biggest economy, and has pushed more passengers from Sweden and Norway to transit via Finnair's Helsinki hub instead of Copenhagen.

"As they (SAS) have rearranged their flights to focus more on Copenhagen, we have (...) seen a shift onto our own networks from some of the destinations that they have stopped serving," Finnair's Chief Revenue Officer Christine Rovelli said.

Finnair has 19 long-haul destinations from Helsinki this year, compared with 11 SAS flies from Stockholm, Rovelli said.

HIGH HEDGING

The Iran war has sent fuel prices soaring and disrupted travel to the Gulf as well as long-haul routes stopping off there. SAS has raised ticket prices and cancelled 1,000 flights in April alone.

Finnair, which hedged more than 80% of its fuel in the first and second quarters and 69% for the rest of the year, saw a 40 million euro ($47 million) improvement in its first-quarter operating result.

"That's done with some help from the Middle East situation, controversially, because it increased demand on our flights," Rovelli said.

Revenue from Finnair's Asian routes rose nearly 15% from 2024 to 2025. The carrier is also renewing its European fleet after struggling through the pandemic and the closure of Russian airspace, supported by a large-scale state recapitalisation.

SAS' decision to abandon its three-hub model spanning Copenhagen, Oslo and Stockholm has also opened growth opportunities for Finnair in Norway, Rovelli said.

Traffic at Oslo's Gardermoen airport is dominated by budget airline Norwegian NAS.OL, which has no intercontinental routes.

Sweden's and Norway's decisions to give up national holdings in airlines have only reinforced Finnair's case for staying independent, Rovelli said.

"We're very happy to remain independent and we fully expect to be successful doing so," she said.

Finland holds a 55.7% stake in Finnair, part of the Oneworld airline alliance.

($1 = 0.8519 euros)

-Reporting by Anne Kauranen in Helsinki. Editing by Mark Potter/Reuters