Finnair Oyj - Company Announcement

LSG Sky Chefs to acquire Finnair’s catering business

FINNAIR PLC        STOCK EXCHANGE RELEASE         MARCH, 12 2012 at 09:45 EET

LSG Sky Chefs, the world's largest provider of in-flight services, and Finnair
have signed a Memorandum of Understanding  on LSG Sky Chefs acquiring Finnair's
catering operations. The acquisition would comprise the entire share capital of
Finnair Catering Ltd. and Finncatering Ltd. Finnair would continue to buy its
flight catering services from Finnair Catering Ltd., which transfers under LSG
Sky Chefs ownership. The acquisition is subject to the approval of Lufthansa
Board and the competition authority of Finland and it is expected to be closed
by the end of first half of 2012. "LSG Sky Chefs is one of the leading players in the in-flight service industry.
Its international product development, global operations and profound know-how
of in-flight services are an excellent basis for producing high-quality
in-flight service for Finnair customers. We have positive experiences with LSG
Sky Chefs from other airports outside Finland and this is a natural
continuation of our partnership", says Anssi Komulainen, Senior Vice President
of Customer Service at Finnair. 

“Together with other measures taken to improve efficiency in catering
operations of our airline business, we expect this transaction to result in
substantial permanent annual cost savings contributing to our overall savings
targets.” "LSG Sky Chefs is extremely pleased to be able to widen its operations to the
strategically important Finnish market. Finnair's catering operations are well
run, the personnel is very professional and the production facilities are
state-of-the art. Finnair is an important client for us and we are convinced
that we can further develop the operations, thus producing additional value for
Finnair and its passengers", states Jochen Müller, Executive Board Member
Operations of LSG Sky Chefs. 

In 2010, the catering business included in the Memorandum of Understanding had
net sales of 80 million euro. Subject to the final agreement, approximately 650
employees of Finnair Catering Ltd and Finncatering Ltd will be employed by LSG
Sky Chefs. The transaction does not include Finnair Travel Retail, which as of
January 1, 2012 has been a part of Finnair's other operations. 

Developing its partnership network is a part of Finnair's strategy and the
planned structural changes of the company, which aim at cost savings and
facilitating growth through quality improvements. Finnair had announced earlier
that it was looking for a cooperation partner for its catering services. 

LSG Sky Chefs is the world's largest provider of in-flight services. These
include catering, in-flight equipment and logistics, in-flight retail as well
as the management of onboard service and related airport services. LSG Sky
Chefs partners with more than 300 airlines worldwide and operates some 200
customer service centers in 50 countries, producing around 460 million airline
meals a year. In 2010, the companies belonging to LSG Sky Chefs Group achieved
consolidated revenues of € 2.2 billion. For further information also visit
www.lsgskychefs.com 

Finnair announced on August 5, 2011 that it targeted decreases in its annual
costs of 140 million euros by 2014. Finnair has already announced that it: 

• has chosen Swissport as its partner for  baggage and apron services
• is optimizing the size of its fleet in European air traffic, has discontinued
the leases of four Airbus 320 series aircraft, and subleased four Embraer 170
aircraft 
• is exploring  different alternatives to improve cost-efficiency of its engine
and component maintenance services 
• is streamlining its support functions as well as  marketing and distribution
activities 
• seeks a partner to accelerate its Nordic Champion strategy and aims to
significantly lower costs in European traffic 
• has initiated  numerous other savings measures throughout the company.

Further information: Finnair Communications, tel +358 9 818 4020,
comms(at)finnair.com