(Bloomberg) -- Finnish carrier Finnair Oyj canceled a planned leadership transition after the closing of Russian airspace upended its long-haul strategy.
Jouko Karvinen, chairman since 2017, will remain in the post rather than handing over as planned to Kari Stadigh, the former chief executive officer of Sampo Oyj, the airline said in a statement on Friday.
The men jointly concluded that the planned succession “is not considered appropriate in these circumstances,” Finnair said. “It is important to ensure continuity in the board's work.”
Russia's invasion of Ukraine has triggered a series of reciprocal air-space closures that have barred Finnair's access to Siberian pathways between Helsinki and destinations such as Tokyo, Seoul and Beijing. The flights underpin Finnair's strategy to fly passengers between Europe and Asia using the shortest possible routes, with the associated fuel efficiency benefits.
The company now has to reroute key flights around Russia, adding hours to flight times and eroding profitability.
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Finnair Faces Wipeout of Asia Business on Russia Flight Bans Flight Routes Get Thrown Into Chaos With Russian Airspace Closed |
Asian traffic accounted for just under 40% of Finnair's revenue last year, down from about 43% in the last full year before the Covid-19 pandemic that began in early 2020.
Travel restrictions and spreading infections had grounded much of its fleet, and the carrier had worked to mitigate the impact by shifting increasingly to transporting cargo.
Finnair postponed its annual general meeting to April 7 from March 24 as a result of the amended proposal. The shares were down 4.3% as of 11:05 a.m. in Helsinki.
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