Finnair Oyj - Decisions of general meeting

DECISIONS OF FINNAIR PLC'S ANNUAL GENERAL MEETING 2008

FINNAIR PLC		STOCK EXCHANGE RELEASE		27.3.2008

DECISIONS OF FINNAIR PLC'S ANNUAL GENERAL MEETING 2008

- 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 0.25 euros per share be paid 
- 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 
- Approval of the shareholder's proposal on appointment of the Shareholders'
Nomination Committee 

Chairman of the Board of Directors Christoffer Taxell Opening speech: 

Dear Shareholders, 

As Chairman of the Board of Directors, it is my pleasure to open the 2008
Annual General Meeting of Finnair Plc. 
2007 was a good year for Finnair. The company's strategy worked, the company's
financial position strengthened. 
When opening last year's Annual General Meeting, I stated that the investment
programme presented then would require from Finnair a clearly better financial
performance, a strong balance sheet, as well as agility and flexibility in all
of our operations. 
Development over the past year has been encouraging in this respect. Our
company delivered a strong result. Return on capital employed rose to a good
level. As a result of this, and due to the confidence shown by shareholders in
the share issue, we now have what it takes to finance substantial aircraft
acquisitions in line with our strategy. When I further state that last year our
competitive position strengthened, capacity grew significantly together with
customer numbers, and that the operational efficiency measures initiated a few
years ago produced results, we can be satisfied with how things have gone. 
The sky is not completely cloudless, however. During a year that otherwise went
well, we suffered from delays, which were widely publicised. Delays are,
regrettably, part of an airline's everyday life. The growing complexity of
Finnair's network structure has contributed to a weakening of flight
punctuality. We understand our customers' concern, even though delays are not a
phenomenon that affects Finnair alone. Our customers' trust and satisfaction
are always of prime importance to us. 
Improving punctuality has now been set by Finnair's management as a clear
objective for the company and its personnel as a whole. 
Weakening economic trends and rising energy costs will exert pressure on the
financial performance of the entire industry this year. We have what it takes,
however, to do well - even in these conditions. Last year our experienced and
committed employees showed their ability and readiness to participate in
delivering results. Our incentive and profit bonus schemes meant that all of
our employees shared in the result we achieved. 
Review by President & CEO Jukka Hienonen: 
Dear Shareholders, 

Last year will go down in history as record-breaking in many ways. General
economic conditions were highly favourable, and air traffic received from this
strong tailwind a much longed-for boost, particularly after the problematic
early years of the new millennium. Airlines as a global sector made a profit in
2007, even though the financial condition of the sector cannot be compared with
many other industries. Liberalising the skies to competition has opened up
national markets within the EU to new players, and under the price pressure
created by the budget airlines, the traditional companies have implemented
round after round of efficiency measures. 
The falling price trend that has affected airline tickets for years now seems
be ending, largely due to fuel prices reaching record levels. Huge productivity
improvements have allowed a positive earnings development for airlines even in
these conditions, where unit revenues have been falling, but where two key cost
items, namely fuel and labour, have been rising. 
Since 2001, European airlines' performance per flight kilometre has grown by
nearly 80%, and Finnair by even more than this, namely around 90%. There are
some companies in the industry, however, who have not managed to implement
significant efficiency measures. In a harsh competitive environment, they have
been driven into tight spot: 
•	a weakened financial condition has brought their economic self-sufficiency to
a low level 
•	they have not been able to implement new aircraft investments 
•	financiers have demanded that the companies sell those of their assets that
are most easily convertible into cash 
•	shareholders have lost interest and  
•	customers have departed to seek other alternatives. 

Now as economic conditions appear to be slowing and the high price of fuel puts
the squeeze on airlines, it's clear that we are going to see structural changes
in the sector. Companies will collapse and the weak will be merged with the
strong. Inefficient airlines will first lose their customers and then jobs will
go. 
The market, which more or less fairly reflects the future prospects of each
industry, has reduced airlines' share prices clearly more quickly than shares
in general. For example, in Europe, airline shares have fallen on average by
40% in the last 12 months, with the decline being around 20% since the start of
this year alone. Finnair's share has also been affected by this, but even so it
has survived the turbulence significantly better than the sector index.
Although from the investor's perspective, the absolute return in Finnair, too,
has been negative over the last year, we have succeeded well in the competition
between airlines, and Finnair has been one of the best European airline
investments. Good economic conditions have traditionally led to overcapacity in
the airline industry, which in a downturn are offered at knock-down prices,
with negative consequences for financial performance. Given this history, it's
understandable that the valuation coefficients of airline shares are low. Is
the present situation somehow different from before? At least expensive fuel
will magnify the performance differences between companies, both in terms of
fleet and productivity. After the publication of last year's results, Finnair's
market value exceeded for the first time the market value of our Nordic
competitor SAS, even though our neighbouring airline is nearly three times
bigger than Finnair in terms of turnover. At the beginning of this decade, the
market value of SAS' was around times bigger than Finnair's. 
We would rather see our airline as a better business than at present, one in
which we would be better able to adapt to changes in demand, and where other
parts of the same earnings chain would better bear their responsibility for
fluctuations in volume. 
Finnair has both a history and a future:
•	we have evidence of long-term growth in productivity and we will commit to
this also in the future 
•	the Asia strategy is working and it has kept Finnair among Europe's fastest
growing airlines; we also intend to continue its goal-oriented implementation 
•	we have managed to raise aircraft load factors and there is still further
room for improvement 
•	the company's finances have been on a solid foundation, we have a healthy
balance sheet and, following the share issue, our solvency is among the
absolute best in the business. From this platform, we believe we will be able
to carry out the substantial investments we have before us, and which, after a
couple of years, will have us operating with the industry's most modern fleet
and the best in terms of fuel economy and emissions 

In 2006 we initiated in Finnair an efficiency programme with a financial impact
of 80 million euros, and the programme's decisions were implemented a good year
and a half ago. We promised that the programme would generate half, namely 40
million euros, of the result in better efficiency and savings in 2007. Towards
the end of the year we become increasingly convinced that this target would be
exceeded. In November, we issued new profit guidance in which we raised the
full-year profit forecast from 70 million to over 90 million euros. The final
operational result of 97 million euros was slightly above our own expectations,
and the improvement in the result due to the efficiency programme was around 50
million euros. 
In 2007 we succeeded in many of our key goals: 
•	our customer satisfaction rose to its highest level since records began 
•	our market share in air traffic departing from Finland grew a good 5%,
approaching 60% 
•	our aircraft's load factor rose to a historic high of 75.5% 
•	despite the rise in fuel price, costs per kilometre flown fell by 5.4%, with
revenue falling 1.9% 
•	we improved our profitability in every quarter of the year and we came very
close to the target we had set ourselves of an operational result of 100
million euros 
•	the result before taxes of 139 million euros and return on capital employed
of 14.2 % were the best in the company's 84-year history 
•	we successfully divested FlyNordic and ground handling operations outside
Helsinki-Vantaa, which were not part of our strategy 
•	we acquired 242 million euros in  new capital in order to implement the
modernisation of the company's long-haul fleet. 

For this vote of confidence, I would like to extend my heartfelt thanks to
shareholders. We in Finnair will do all we can to ensure that shareholders
receive a return on this investment. 
We cannot, however, be satisfied with our performance in one respect; in
punctuality we have returned weaker figures five years in succession. In the
2007 European punctuality comparison, Finnair fell to 10th place, although we
were still among the best third. Unfortunately, the general punctuality trend
for air traffic in Europe has also been downward over the last four years.
Congestion of major airports and airspace is annoying for customers, costs
companies money, and causes unnecessary emissions in the atmosphere.
Regrettably, the setbacks experienced by air transport, such as 9/11 or SARS,
have in their time caused delays in investment programmes, and now, after four
years of growth in the sector, systems are stretched to their limits. Moreover,
greatly heightened security systems reduce passenger comfort and contribute to
weakening the competitiveness of air travel. 
I would like at this point to apologise to our customers for the bother caused
by delays and thank them for the patience they have shown. For the last three
months, our punctuality statistics have made grim reading, and from this point
forward we must reverse the trend. To achieve this we have prepared a serious
action programme. For Finnair, the biggest challenges in punctuality are
connected with managing an increasingly complex network operation. Delays in
one place are repeated and radiate further afield than used to happen in a
traditional point-to-point operation. The greater number of long-haul flights
are also more damaging in cases of delay, because the high daily utilisation of
long-haul aircraft simply does not leave any margin for error. No fast remedy
or simple prescription exists to eliminate this problem. Statistically, one in
three delays are outside Finnair's sphere of influence, for example air traffic
control reasons, damage caused to aircraft by foreign objects, and also many
unanticipated technical faults. Media interest in the topic is high and, at
best, even delays of one hour have made it into the headlines - which I'm
fairly sure does not happen elsewhere in the world. 
Controlling growth is difficult. Production bottlenecks arise and measures
taken to remove them create problems in new places. Since the beginning of year
we have not been able to respond to customers' increased contacts through
telephone services and other feedback. The situation has clearly improved,
although we are not yet permanently at our target level. Particularly in the
summer, baggage left behind caused lots of problems, but even here some
emerging improvement has been perceptible due to additional resources and
better work organisation. 
In the media suggestions have also appeared that under efficiency pressure or
as Finnair Technical Services staff has been reduced, aircraft maintenance
programmes have been neglected. I flatly reject such claims. Aircraft
maintenance programmes are kept continually up to date, following aircraft
manufacturers' recommendations and information, and experience gathered by
ourselves and other airlines. 
I concede, however, that the workload at Technical Services has increased. This
is also unavoidable, due to the unit's previously poor financial performance,
if we intend to keep technical maintenance in our own hands and continue to
view it as a strategic goal within Finnair. Focusing purely on the maintenance
of our own aircraft types will improve productivity, and I believe that the
longer maintenance series will help us concentrate on our core operations. Now
Finnair Technical Services is working in all respects at market prices, also
with internal customers, and it does so profitably. The best indication of
competitiveness is provided by new external customer contracts, of which the
8-year long and over 200 million euro value Aeroflot Cargo full support
agreement represents the most concrete evidence. 

The main issue in our operations is always safety, however. We would never
under any circumstances fly with an aircraft in less than perfect condition. In
this our passengers can trust, but they must also accept that flying cannot
always take place without delays. 
Finnair's employees have been working under pressure. The working atmosphere
and labour relations have remained good, however. In autumn 2007 we concluded
two and a half year-long collective employment agreements with six trade unions
and this spring only the pilots' collective employment agreement, which ends in
May, still has to be agreed. For the company's good result, we will pay via
various bonus schemes a record 30 million euros in performance bonuses, which
will be distributed to the Personnel Fund, units' performance bonuses and the
share bonus scheme, with each receiving around 10 million euros. 
At the end of last year, changes in the ownership of Finnair took place, with
the Icelandic FL Group reducing its holding from 24% to around 12%. It still
remains the company's second largest shareholder after the Finnish State. The
shares sold by FL Group were dispersed among a number of significant
institutions and investors both at home and abroad. Although shareholders'
equity will be greatly needed for the company's investments over the coming
years, we consider it an important signal that after the good result for the
year shareholders' interest are taken into account through a dividend
distribution. The company's Board of Directors proposes to the Annual General
Meeting that a dividend of 0.25 euros per share be distributed, which is more
than double the previous year's dividend. 
Although the business operations of most of our customers are still healthy and
consumer' confidence in their own finances has not significantly weakened, we
have seen during the start of the year certain factors that cast much
uncertainty. We have observed a fall of one to two percentage points in our
passenger load factors, but at the same time the price erosion that has been
evident for several years has now levelled off where Finnair is concerned. The
price level of long-haul flights has even been rising. Cargo demand, which is
considered to be the sector's most sensitive indicator, has been strong over
the last six months, and in the early part of this year it is clearly exceeding
the 2007 level. 
Dear Shareholders, 
For the first two months of this year, Finnair's operational result has been
better than in 2007. We expect that the result for the first half of the year
will remain at the level of last year. Higher fuel costs will burden our
result, but a high degree of hedging and a favourable dollar exchange rate will
alleviate the pain. In the present conditions, it is exceptionally difficult to
make very far-reaching conclusions about the full-year result for 2008. In
sailing terms, the outlook ahead could be characterised as hazy. It's clear
that if the wheels of the economy start to turn more slowly, air transport will
not avoid its effects. We have still set ambitious targets for Finnair - but we
are also prepared for circumstances in which last year's good tailwind turns
into a side wind. Sailing into a full headwind is not possible according to the
laws of physics, but in a side wind progress is still possible and a good boat
speed can be maintained. Of course, the condition of the crew and the vessel is
then more severely put to the test, and it's a good idea to dress in waterproof
sailing gear. Conditions in a race are generally the same for everyone,
however, and our measures of recent years have prepared us well for any change
in the weather. 
Having achieved our fine objective, launched at the start of the millennium,
“Best in Northern skies, European excellence”, the time has come to set new
visions: in the next decade, to become the “Northern hemisphere's
intercontinental airline of choice”. Not the biggest airline, but the one from
which other airlines take their measure. 
Compensations to the members of the Board of directors were approved as
follows: 

- Chairman 61,200 euros per year 
- Vice Chairman 32,400 euros per year 
- The other members 30,000 euros per year 
- Meeting compensation to a member residing in Finland 600 euros and to a
member residing abroad 1200 euros per meeting of the Board of Directors or its
committee. 

Board of Directors

The following were elected as Members of the Board of Directors until the end
of the next Annual General Meeting: Mr Sigurdur Helgason, 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 Pekka Timonen. 

Authorised Public Accountants PriceWaterhouseCoopers Oy and Mr Jyri Heikkinen
were elected as auditors and Mr Tuomas Honkamäki and Mr Timo Takalo as 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 5,000,000 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 OMX Nordic Exchange Helsinki Oy, 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 OMX Nordic Exchange Helsinki Oy. The purchase of the company's own
shares reduces distributable equity. The authorisation is valid until the
Annual Shareholders' Meeting 2009. 

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 5,500,000 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 is valid until 31 March 2011. 

Appointment of the Shareholders' Nomination Committee

According to the Ownership Steering Department of Government Office
representing the State proposal the Annual Shareholders' Meeting appointed a
Shareholders' Nomination Committee to prepare proposals on the composition and
renumeration of the Board of Directors to the next Annual Shareholders'
Meeting. The Shareholders' Nomination Committee consists of the Chairman of the
Board and of a representative of each of the three biggest shareholders. 

Finnair Plc
Communications
27.3.2008

Additional information:
Mr. Taneli Hassinen, VP Financial Communications and Investor Relations