The long-term incentive plan for Finnair pilots will be discontinued, because the saving targets set as a prerequisite for implementing the share-linked plan will not be reached over the agreed time period. Finnair and the pilots have not been able to find additional savings which could have compensated for the difference. Once the incentive plan is stopped, all related hedging arrangements will be reversed. As a result of the incentive plan’s cancellation, liabilities accrued during the program, totalling approximately 11 million euros, will be reversed in the fourth quarter. This cancellation will have a positive effect on Finnair’s comparable operating profit in 2018.
Finnair’s Board of Directors approved a one-off long-term incentive plan for Finnair pilots in October 2014. The plan covered the years 2015-2018 and was a part of the savings agreement between Finnair and SLL in September 2014 that should bring Finnair 17 million euros in permanent annual savings in pilot costs. The prerequisite for rewarding pilots based on this plan was the materialization of the agreed cost savings over 2015-2018. In addition, the company share price must at least be 4 euros at the end of the incentive plan. The plan is described in more detail in Finnair’s stock exchange release issued on 13 October 2014.