On 20 May 2020, Finnair announced that it was targeting nearly 80 million euros in permanent cost base reductions by 2022, compared to 2019 levels. The company updated the same target in its announcement on 25 August 2020 by increasing it to c. 100 million euros, updated it again on 28 October 2020 to c. 140 million euros and on 27 April 2021 to c. 170 million euros. Finnair has made good progress in the cost savings programme and will reach this target ahead of the schedule. At the same time, it has identified new savings opportunities. As a result, Finnair targets permanent reductions of c. 200 million euros in its cost base by 2022, based on 2019 operational volumes, of which c. 125 million euros are volume-driven and c. 75 million euros are fixed costs.
The permanent cost savings programme will end in 2021 and, therefore, the company will not report on its progress after this release. The company will, however, continue to seek further reductions in all cost categories. As previously stated, they include savings in such areas as real estate, aircraft leasing, IT, sales and distribution and administration costs, as well as compensation structures. The company will further continue streamlining its organisation and operations and the digitalisation and automation of its customer processes. Additionally, it will remain focused on renegotiating its supplier and partner agreements.
The indefinite as well as temporary layoffs resulting in temporary cost savings, which are not included in the cost savings programme, will be continued.