Finnair Oyj - Decisions of general meeting

DECISIONS OF FINNAIR PLC'S ANNUAL GENERAL MEETING 2007

FINNAIR OYJ	STOCK EXCHANGE RELEASE	22 MARCH 2007 

DECISIONS OF FINNAIR PLC'S ANNUAL GENERAL MEETING 2007

- The income statement and balance sheet of Finnair Plc and Finnair Group was
adopted 
President & CEO's review
- The Board of Directors and the President & CEO were discharged from
liability
- It was decided that a dividend of 0.10 euros per share be paid
- Amendment of Articles of Association 
- The number of members in the Board of Directors and the number of auditors as
well as their compensations and benefits were adopted 
- A Board of Directors and auditors were elected
- The Board of Directors was authorized to purchase and dispose of the
company's own shares
	
Chairman of the Board of Directors Christoffer Taxell Opening speech:

Dear Shareholders, 

In my capacity as Chairman of Finnair's Board of Directors, I open this 2007
Annual General Meeting. I bid you all a warm welcome. 

The past operating year has been a varied one. The market developed positively
and traffic volumes grew. High fuel costs ate into profitability, however, and
we could not avoid internal problems either. The President & CEO will return to
all of this in his review. 
 
On examining the past year, our key message is that Finnair's strategic
position has strengthened. We made decisions on big investments in Asian
traffic, while our European capacity also grew at the same time. 

I cannot emphasise enough our dependence on traffic between Asia and Europe, an
issue which in Finnish discussions often seems to be forgotten. The high
passenger volumes of Finnair's Asian traffic enable direct, often daily,
connections to a larger number of cities from Helsinki than from Stockholm or
Oslo, for example. 

Air traffic between Asia and Europe is still growing strongly. As a result of
years of work, Finnair has, at this very important time, achieved a strong
market position. If we want to been taken seriously as an operator in future,
we must grow at least at the rate of the market in general. This will require
significant investment - in aircraft and people, in service and quality. The
largest investment programme in our history. which we announced a short time
ago, is therefore above all an investment in the future. 

The implementation of this programme will require a clearly better financial
performance from Finnair, it will require a strong balance sheet, it will
require agility and flexibility in all of our operations. This is a big
challenge. But if we are not able to respond to demand in Asian traffic, we
will be not be able to care for the needs of our Finnish customers either. Then
Finnair will no longer be Finnair, but a small airline engaged in regional
flight operations. Moreover, our capacity to serve our domestic customers would
also deteriorate. Such a development would be neither in our company's or our
shareholders' interests. 

There is again good reason to repeat that Finnair works very hard to serve its
customers well and thereby to create value for its shareholders. If we succeed
in this we will be able to provide work for both our present and our future
employees. A prerequisite for success is that we operate on market terms. All
of us involved in the company must remember this. 

The issue of owner control has been raised in various ways in discussions.
Finnair is managed as a listed company, both in the company's relations with
shareholders and in the shareholders' relations with the company. There should
be no doubt about that. That's why it is good to remember that all members of
the Board of Directors represent all shareholders and that their task is to
further the company's best interests. This applies both to the Finnair's
present board and to the board that will be elected in the Annual General
Meeting that now begins. 

Once again, I wish you all welcome. I declare the Annual General Meeting of
Finnair Plc open and propose that Mr Pekka Merilampi be elected Chairman of the
Meeting. 

Review by President & CEO Jukka Hienonen:

Dear Shareholders,

For Finnair, 2006 was a difficult year, and as President & CEO I can't be
satisfied with the result that we are putting before you. Conditions for the
year were favourable in terms of demand, but the record price of fuel presented
a hard challenge in a market troubled by overcapacity. The previous year's,
that is 2005's, profit was 80 million euros, and at the beginning of the year
it was clear that our fuel bill would grow by more than 100 million euros. At
the same time, there has been downward pressure on ticket prices, especially on
domestic and European routes. A two-day strike by cabin staff pushed the final
quarter's result clearly into the red, cost the company 10 million euros and
caused a loss of trust among our customers. Moreover, other items - hopefully
of a one-off nature - such as the introduction of two new models of aircraft,
had a significant weakening impact on the result that ended up close to nil. 

Changing to become a network operator in Europe-Asia traffic requires
structural changes in Finnair. Our operating practices, marketing, service
concept, fleet, working conditions and whole way of thinking must serve this
strategic goal. This a unique opportunity for our company and it will require
the largest investments in the company's history. Finnair has a strategic niche
in this traffic - a gap in the market where we have what it takes to achieve a
permanent competitive advantage. 

In passenger traffic, demand has continued to be strong, the passenger load
factor of Finnair's aircraft was higher than ever before at 75.2%. But it is
symptomatic that even in these strong economic conditions we are unable to make
a profit. Our efficiency is in many areas weaker than our European competitors:
our passenger load factors have only now risen to the average European level,
the average distance flown by our aircraft is too low, and the number of flying
hours of our crews is below the industry average not only in the cabin but, on
long-haul flights, also on the flight deck. We pay our flight personnel more
than other domestic companies in the industry. We are happy to do so, but in
return we also want to be clearly ahead of the others in terms of staff
productivity. The efficiency figures of Airbus pilots are at a good European
level, even though the daily utilisation of this type of aircraft should be
better than it is now. The time spent in the air by long-haul aircraft, on the
other hand, is among the best in the industry. 
 
In the previous year, Finnair made the decision to modernise business class on
long-haul aircraft with lie-flat seats, and this has proved to be a very wise
decision: business class demand, which had been in a long-term decline, has
recovered sharply and at the end of the year we even found that we had a
positive problem: business class tickets sometimes sell out before economy
class on long-haul routes. This has also brought business class connecting
passengers on to our European routes. 

Life as an operator in Europe-Asia traffic also means entirely new challenges
for the reliability of the network. A problem at one airport can have knock-on
effects in the form of disruptions on dozens of other routes. We unfortunately
received a foretaste of this last year when our punctuality and network
reliability indicators clearly fell. Susceptibility to disruption has grown as
a consequence of the fact that our MD11 fleet is growing old. We will improve
this in the coming years as the new long-haul Airbus aircraft join our fleet
earlier than previously scheduled. 

Helsinki-Vantaa's increased passenger numbers together with stricter security
regulations have had an adverse effect on baggage handling and this has
regrettably meant a clear rise in the amount of baggage that is left behind.
The terminal expansion at Helsinki-Vantaa, with its new baggage handling
systems, will be completed in 2009. This expansion will be really necessary, as
the growing number of our Asian passengers will rapidly fill up even this
increased terminal capacity. 


Few sectors can analyse their own operations at the customer interface as
precisely as air transport. We have at our disposal a feedback system that
measures detailed customer feedback numerically on a monthly basis and we also
have data comparable with systems of other companies in the sector. Despite the
flood of feedback caused by last autumn's strike, the overall picture of
Finnair's customer satisfaction remains fairly positive. 

In long-haul traffic customer surveys, we are ranked among the best in Europe
for business class both in terms of service quality and overall customer
satisfaction. In long-haul traffic economy class, our rating is weakened by our
modest investment in cabin entertainment, which will, however, be rectified by
the renewal of the long-haul fleet. 

When analysing our operational efficiency more widely, it has been necessary to
focus on the extent to which our internal services conform with market terms.
Finnair purchases many products and services from internal suppliers: for
example catering, ground handling, aircraft maintenance, real-estate services 
and financial management. Many of these are already operating on market terms,
but most have traditionally been operated as a parent company department, on
which the competitive requirements comparable to those expected of external
operators have not been imposed. We must search for better transparency and
continuous measurement of competitiveness also in respect of external
operators. If we permanently fail to match the prices and quality level
provided by the competition, we must also be able to choose partners from
outside our Group, because only a genuinely competitive position will ensure
the success and prosperity of all our business operations in the future, too. 

For this reason we decided, for example, on a major restructuring project in
Technical Services, with the aim of making these services work for Finnair on
market terms. Only in this way can we ensure that we can succeed also in the
market for external customers, where in future a greater share of our turnover
should originate. Finnair Technical Services has an excellent reputation for
its reliability and technical expertise, but our financial performance in this
area has not, unfortunately, been on the same high level. As part of our
competitiveness project we have made write-downs of more than five million
euros on the value of slow moving inventories. This has meant discontinuing
technical support for many of Finnair's old types of aircraft , where there is
no prospect of long-term customer agreements for them. We will concentrate in
future on maintaining those types of aircraft with which we ourselves fly, for
whose maintenance we believe exists in the world sufficient demand, and where
the customers value quality and overall reliability. 

During 2006 we have had to reduce the number of personnel. Statutory
employer-employee negotiations, which ended in June, agreed a total of 670 job
cuts, mainly in Technical Services and support services. It has been possible
to implement most of the programme without redundancies, because the age
structure has facilitated early retirement arrangements. The overall objective
of this and other measures aimed at improving competitiveness is 80 million
euros of savings from 2008. For these programmes, a total of 10 million euros
in arrangement expenses were recognised in the Group's second quarter. 

Besides the high price of oil, these one-off items also contributed to the weak
result for 2006. The results of Finnair Technical Services, the ground handling
company Northport and Swedish budget airline FlyNordic were loss-making,
although FlyNordic improved its result into positive territory during the
second half of the year. 

I explained at last year's Annual General Meeting that our portfolio of
business operations is wide and that we must consider which of them can be
retained into the future. Those with the highest probability of ending up on
the sales list are those whose result is poor, growth potential weak and which
could be more valuable in the hands of some other owner. We began the cleaning
up of our portfolio with real-estate services, which we outsourced to YIT. As a
process it proceeded professionally and, based on first experiences, the
decision can be considered to have been a success. At the end of the year we
announced that we were investigating partnership arrangements or the sale of
operations as far as our ground handling company, Northport, was concerned.
Ground handling services at domestic airports other than Helsinki-Vantaa were
sold this March to RTG Oy, and we are continuing to study arrangements at
Helsinki-Vantaa, Stockholm and Oslo. 

Finnair and Airbus agreed on a wide-bodied fleet renewal project in December
2005: initially our fleet would be supplemented by the present production
model, i.e. the four-engine A340, and later by the two-engine A350, which would
come into production in 2012. Both types of aircraft are in the same size
class, around 300 seats. 

In spring 2006 Airbus encountered significant setbacks with the manufacture of
its new super jumbo aircraft, the A380. The entry of the aircraft into the
market had to be postponed and Airbus was compelled to invest considerable
product development resources in order to get this project back on the rails.
As many Airbus customers were demanding at the same time better performance
figures from the A350 aircraft, which is still on the design table, including a
higher speed and bigger maximum take-off weight, Airbus was clearly en route
towards a crisis. 

We spent the whole summer and autumn unaware of our partner's intentions.
Finally, at the end of November, Airbus announced that it was completely
redesigning the A350 and that it would invest nearly 10 billion euros in the
project. From Finnair's perspective this, of course, means better aircraft, but
unfortunately with a  nearly two-year delay in the introduction of the A350. A
renegotiation was therefore necessary. We were actually one of the few Airbus
customers who had received a fixed price for the A350, but the problem for us
arising from the change was the additional time we would have to wait for the
aircraft. 

As a result of months of negotiations we have found a solution to this
question. We will increase our wide-bodied fleet with the A330/340 series of
aircraft, which have identical cabins. The two-engine A330, however, will
perform well on our shorter long-haul routes (NYC; DEL; MUM; PEK) and is more
economic to use where its range is sufficient. In a way, this solution came to
us because the postponement of the A350's arrival to 2014 requires a greater
number of aircraft for the interim period and because the division into two
different types of aircraft is economically possible. 

Under the agreement signed with Airbus in March 2007, we will acquire ten
A340/A330 aircraft. When the new technology A350 aircraft comes on to the
market, we will take 11 of them, but only from serial number 30 upwards, in
order to avoid possible product development versions of the aircraft ending up
in Finnair's colours. For Finnair, the agreement contains a significant number
of flexible elements: opportunities to change the delivery schedule, order
options and the chance to choose between owning and leasing different versions
of the aircraft. We believe that we have, despite Airbus's difficult situation,
a good partner and a relationship of trust, which will withstand difficult
circumstances. Overall, the solution we arrived at is absolutely the best of
those which were available. 

The whole of this wide-bodied aircraft investment programme will put Finnair's
balance sheet to the test, because a commitment of almost two billion euros is
huge for a company of our size. Operating solely with a leasing fleet reduces
an airline's room for manoeuvre and raises costs. We believe that the success
we have achieved in Asia has been noticed and that our financers are interested
in participating in this project. To obtain the optimum financing structure, it
is possible that we will explore in the coming year a strengthening of our
capital structure, which would enable the aircraft to be acquired on the
company's own balance sheet. 

The MD11 aircraft will be decommissioned from our fleet during 2010. The MD80
aircraft stopped wearing Finnair colours in summer 2006. What both types of
aircraft had in common was not only a common manufacturer but also a solid
basic structure and high reliability. Unfortunately they also had high fuel
consumption and an ageing construction. Finnair is currently flying on its
European routes with the industry's most modern fleet, whose average age is
only around four years. We have introduced the new Embraer 170/190 type of
aircraft, which has proved to be an excellent, modern tool. Its departure
reliability, on the basis a year's learning curve, already nearly matches the
Airbus A320 series and is improving still. 

In the coming years, the ATR 72 aircraft used by our Estonian subsidiary, Aero,
will come to the end of their operating life. We have announced that we will
discontinue four of the ATR turboprop aircraft during the current year.
Unfortunately neither Finnair nor Aero have the competitiveness to operate
profitably in short-range turboprop traffic, but for feeder traffic needs we
will serve the airports and customers in question either with the Embraer fleet
or with the assistance of partners. Aero's role is being reconsidered and I
would hope that a natural role will be found for the airline in future as part
of the Finnair Group. 

The fuel consumption of the new aircraft is clearly better than that of
previous generations of aircraft. This is important, not only for fuel costs
themselves but in future also for emissions. At the end of 2006, the EU
Commission decided to extend emissions trading to the EU's internal air traffic
as of 2011 and also to all traffic coming to the EU area as of 2013. Although a
unilateral commitment to emissions trading cannot be considered a welcome
development, there is enormous political pressure towards emissions trading. Of
the options presented, emissions trading is the best, because its takes into
account emissions in relation to performance. We will strive to influence the
content of the system to ensure that it is neutral from a competition
perspective. It could, on the other hand, pave the way to worldwide civil
aviation emissions trading, which is the only sensible outcome, because the
carbon dioxide emissions of EU's internal air traffic represent less than half
of one per cent of global carbon dioxide emissions, and alone they not solve
the problem directed at the world's climate, even if all European aircraft were
consigned to the scrapyard. 

During 2006 the EU and Russia achieved a significant breakthrough on the issue
of Siberian overflights, which has been experienced as a problem for flight
traffic. Russia and its national airline Aeroflot have collected from Siberian
overflights not only the normal navigation fees but also around 300 million
dollars of revenue that is not based on any international agreement. No
corresponding items are charged anywhere else in the world. According to the
agreement reached, the overflight fees will be gradually discontinued from 2011
and stopped completely by 2013. For Finnair, this represents a saving of around
20 million US dollars on current flight volumes. 

Dear shareholders, as you have heard, we have much to improve and there are
many things that we could make more efficient and transparent. But this is not
a unique situation in the airline industry nor in business life in general. We
must call into question familiar operating practices, because during our
history we have lived in an entirely different world from that now experienced
by the airline industry today. 

Our prospects are favourable, however: customers value our product and service,
and we have a healthy balance sheet that allows us to invest in future growth.
This field of business is a difficult one, due to its high capital commitment,
significant labour intensity and great sensitivity to disruption. 

2007 has begun on a favourable note: our demand and consequently our order book
are very strong. All investments directed towards Asia are producing good
returns, and we are achieving a daily flight frequency to a number of
destinations. This will improve our own operational efficiency and increase
customer commitment in Finnair. In the coming summer season we will fly daily
to Beijing, Shanghai, Osaka, Hong Kong, Bangkok, Delhi and, of course, New
York. Among the new destinations, we are opening Ljubljana, Bucharest, Gdansk,
Lisbon and Nuremberg. 

The development of our long-haul traffic during the last six years has been
huge. In a few years, Asian traffic has grown from a few routes into a
substantial network consisting of hundreds of connections between Europe and
Asia. Without this transformation, we would be in an entirely different
situation, possibly even part of some other airline. Now we have an independent
role and are enjoying a strong level of organic growth. 

We want to hold on to Finnair, which is a world-class airline. But it could
also be a better business. But I do believe that our result for this year will
improve significantly. 

Financial Statements

The Annual General Meeting adopted the company's and Group's income statements
and balance sheets and discharged the Members of the Board of Directors and the
company's President & CEO from liability for the financial year 2006. 

Dividend

The Annual General Meeting decided that a dividend of 0.10 euros per share be
paid for the financial year ending December 31, 2006. The dividend will be paid
on 3 April 2007 to shareholders who were registered in the Company's register
of shareholders on the reference date of 27 March 2007. 

Amendment of Articles of Association

- the provisions on the minimum and maximum share capital and on the nominal
value be removed 
- the provisions on the tasks of the Board of Directors and the Managing
Director be removed 
- the terminology in the provisions on the right to represent the company be
amended to correspond to that of the new Companies Act 
- the number of auditors be amended to two 
- the provision on the publishing of the notice of the Annual Shareholders'
Meeting in the Official Journal be removed 
- the provisions on the agenda items of the Annual Shareholders' Meeting be
amended to correspond to the new Companies Act 
- the provisions on the record date be removed

The number of members in the Board of Directors and the number of auditors as
well as their compensations and benefits 

The Articles of Association state that the Board of Directors consists of the
Chairman and of a minimum of four and a maximum of seven other members. The
Annual General Meeting approved the number of Board of Directors members as
eight. 
According to the Articles of Association, the number of Auditors is at least
two and no more than four. The Annual General Meeting approved the number of
Auditors as two. 

Compensations to the members of the Board of directors were approved as follows:

Chairman 4,300 euros/month, Vice Chairman 2,500 euros/month, Members 2,300
euros/month, meeting compensation 500 euros/meeting of the Board of Directors
or its committee. It was decided to pay compensation to Auditors according to
their billing. 

Board of Directors

The following were elected as Members of the Board of Directors until the end
of the next Annual General Meeting: Mr Kalevi Alestalo, Ms Satu Huber, Mr
Markku Hyvärinen, Mr Kari Jordan, Ms Ursula Ranin, Mr Veli Sundbäck and Mr
Christoffer Taxell, and as a new Member Mr Sigurdur Helgason. 

Authorised Public Accountants PriceWaterhouseCoopers Oy (Mr Eero Suomela) and
Mr Jyri Heikkinen were elected as auditors and Mr Tuomas Honkamäki and Mr Timo
Takaloas deputy auditors until the end of the next Annual General Meeting. 

Purchase of the company's own shares

The Annual General Meeting authorized the Board of Directors to decide on the
purchase of the company's own shares on the following conditions: 

The authorisation applies to a maximum of 3,500,000 company's own shares. The
aggregate amount of votes pertaining to the shares is less than 5 per cent of
the total share capital and voting rights of the company. The shares can be
purchased for the purposes of developing the capital structure of the company
or for nullification or to be used in possible incentive and compensation
schemes, or as a consideration in business acquisitions and other arrangements.
The shares are purchased through Helsinki Exchanges, and therefore not from all
of the shareholders in proportion to their respective shareholdings. The
purchase price of the shares is based on the price in the public trading. The
purchase price is paid to sellers in accordance with the rules of Helsinki
Exchanges. The purchase of the company's own shares reduces distributable
equity.  The authorisation will lapse 1 April 2008. 

Disposal of the company's own shares

The Annual General Meeting authorized the Board of Directors to decide on the
disposal of the company's own shares on the following conditions: 

The authority applies to a maximum of 3,651,903 company's own shares. The Board
of Directors is authorised to decide to whom and in which manner the company's
own shares be disposed.  The disposal deviates from the shareholders'
pre-emptive right to purchase the company's own shares. The shares can be used
as consideration in business acquisitions and other arrangements in the manner
and within the scope determined by the Board of Directors. The shares can also
be used as a part of possible incentive and compensation schemes. The shares
can also be disposed through public trading in Helsinki Exchanges. The Board of
Directors is authorised to determine and decide the consideration to paid for
the disposed shares, including non-pecuniary consideration and set-off. The
authorisation will lapse on 31 December 2008. 

Finnair Plc
Communications
22 March 2007

For further information please contact:

Taneli Hassinen, Director Communications, tel. +358 9 818 4976