Finnair Oyj - Company Announcement

Finnair’s pilot supplementary pension costs may increase due to Finnish employee pension reform

Finnair Plc            Stock Exchange Release                  24 September 2015
at 8:00 am EET

In autumn 2014, the Finnish labour market organisations agreed on reforms to the
public pension system, involving, among other things, a gradual increase of the
statutory retirement age from 63 to 65 years. The Finnish Parliament is expected
to adopt the Act in late 2015, and it is expected to become effective at the
beginning of 2017.

Finnair's pilot pension benefits, which exceed the existing statutory pension
benefits in Finland, form part of their collective labour agreement. Therefore,
Finnair has conducted negotiations with its pilots in an effort to adjust the
conditions of their defined-benefit supplementary pensions to mitigate the
impact on Finnair of the legislative amendment; however, no agreement has yet
been reached.

If the legislation on reforming the employee pension scheme passes, as currently
written in the Government Bill, but the pension benefits of Finnair's pilots'
cannot be aligned with the public pension reform, Finnair would be liable for
the additional costs associated with the implementation of the legislative
reform. Consequently, its pension obligations would increase by a total of
approximately EUR 30 million. This would be reflected in the balance sheet after
the adoption of the Act, potentially in the financial statements ending December
31, 2015. In addition, the change would increase annual staff costs by
approximately EUR 2 million.

The supplementary pension benefit negotiations concern approximately 700 pilots
currently employed by Finnair. On average, Finnair pilots retire with a
supplementary pension at the age of 58 years.

The supplementary pensions under the collective labour agreement for new pilots
being recruited by Finnair are defined-contribution; therefore, the legislative
reform has no impact on the related pension cost.

Finnair is actively exploring ways to mitigate the impact of implementing the
pension reform, which was agreed by the Finnish labour market organisations,
without incurring undue extra costs to the company.
Further information:
Finnair communications, tel. +358 9 818 4020, comms(a)finnair.com

Distribution:
Nasdaq Helsinki
Principal media
Finnair is a network airline specialising in passenger and cargo traffic between
Asia and Europe. Helsinki's geographical location gives Finnair a competitive
advantage, since the fastest connections between many European destinations and
Asian megacities fly over Finland. Finnair's vision is to offer its passengers a
unique Nordic experience, and its mission is to offer the smoothest, fastest
connections in the northern hemisphere via Helsinki and the best network to the
world from its home markets. Finnair is the only Nordic carrier with a 4-star
Skytrax ranking and a member of the oneworld alliance. In 2014, Finnair's
revenues amounted to EUR 2,400 million and it had a personnel of almost 4,500 at
the year-end. Finnair Plc's shares are quoted on Nasdaq Helsinki.