Finnair has ordered 12 long-haul planes from Airbus in a deal worth over 1 billion euros ($1.2 billion), part of its drive to expand traffic to Asia, Finland's national carrier said on Wednesday.
Finnair said the order included nine A350s and three A340s as well as an option for four additional planes. "The decision reflects our confidence and commitment to our Asian growth strategy," Chief Executive Keijo Suila said in a statement.
"It will enable us to open new destinations as well as to increase flight frequencies to destinations where demand is greatest. In addition to China we are opening new routes to Japan and India."
Finnair's A340s will be delivered in 2007-2008 and the A350s from 2011 to 2013. Airbus is 80-percent owned by EADS, with the balance held by BAE Systems Plc.
The company said it could easily afford the investment, being debt-free and "financially sound". Its net cashflow doubled to 123 million euros in the January-September period from a year ago.
"Operational cashflow will by far cover the investment," Chief Financial Officer Lasse Heinonen told Reuters. "Because this is a 7-year investment programme, the annual investment will amount to, on average, 150 million euros."
Finnair has responded to tough competition in the European market by expanding its Asian network, which generated a fifth of its 1.4 billion euro turnover in January-September, on growth in the region of 18 percent compared to 10 percent in Europe.
"In future we will add one or two new (Asian) destinations each year. Investment in long-haul traffic will be the key to sustainable, profitable growth also in the years to come," said Jukka Hienonen, who will become chief executive in 2006.
The deal follows a $10 billion order for 150 Airbus planes from Chinese airlines this week, as the European aircraft maker and US-based rival Boeing Co build on a record year in combined sales.
The A350 mid-size twinjet is the latest aircraft on the Airbus drawing board, designed as a challenge to Boeing's new 787 Dreamliner, and Finnair said its planes would come into production in 2009.
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