Finnair Oyj - Company Announcement

Flybe and Finnair reveal joint vision for Nordic passengers following acquisition of Finnish Commuter Airlines

FINNAIR PLC          STOCK EXCHANGE RELEASE         1 July 2011    AT 11:00


Europe's largest regional airline to deliver new routes and lower fares,
creating an invigorated marketplace for Nordic regional aviation. 

Further to this morning's announcement to the London and Helsinki Stock
Exchanges, Flybe and Finnair are proud to lay out their joint vision following
the acquisition, subject to competition clearance, of Finnish Commuter Airlines
(FCA) with their intention to create an airline that will become the leading
regional airline for the Nordic and Baltic countries. As announced today, the
acquisition of FCA will take the form of a joint venture, to be split 60 %
Flybe and 40 % Finnair, with Flybe taking over the day-to-day operation of the
airline from Monday 1st August 2011. 

With the further intention of expanding into Sweden, Denmark, Estonia and
Latvia, the new airline will differ substantially to those regional airlines
previously operating in these marketplaces. Firstly, it plans to introduce
Flybe's already successful quality low fare concept/product to the Finnish,
Nordic and Baltic regions, allowing millions of business and leisure passengers
the opportunity to travel at affordable prices. In addition, the company will
benefit from Finnair's excellent connections to Europe and Asia as well as its
local expertise. In short, Flybe and Finnair want to create more Flying Finns
by offering an affordable aviation product that understands the needs of the
Finnish nation. 

Flybe comes with a distinguished track record of high profile international
trade and consumer awards included amongst which are those that recognise its
success and commitment to delivering a quality customer service-oriented
product. This includes an Economy Plus option for the business traveller and an
added bonus of knowing they are flying with the airline that initiated the
world's first eco-labelling scheme for the aviation industry. 

Secondly, it will fly non-stop and directly between regional airports enabling
customers to save time. This system of ‘point-to-point' flying will open up new
destinations and it will complement Finnair's international network operations.
The new airline is designed to support and stimulate regional Nordic economies
in the way that Flybe has already so successfully done around the United
Kingdom and Europe. By introducing new regional routes, new flights and new
timetables, the airline aims to invigorate previously unstimulated markets that
until now have not been serviced by other carriers. 

The plan is to announce details in mid August of extensive new route network
that will operate from the start of the IATA Winter Season (Sunday 30th October
2011). This will supplement the key lifeline routes from the Finnish regions
currently operated by FCA. 

Flybe chose FCA as an acquisition target as its economics make it a viable base
from which to expand into the Nordic and Baltic States region, maintaining this
competitive advantage will be a key facet of the future strategy. 

Commenting on the Flybe's vision, Jim French, Flybe Chairman and Chief
Executive said: “Finnish and Nordic passengers will see something very
different from what has been available to them in the past. Flybe and Finnair
have come together in a genuine partnership of equals that will bring huge
benefits not just for Finnish passengers but also for the country's economy.” 

He continued: “We look forward to working closely with FCA staff as we embark
together on this exciting new venture to introduce a great value, high quality
product to the Finnish travelling public. In establishing much-needed
point-to-point routes, opening new bases in Finland, expanding into new markets
- and in the process, becoming a recognised champion dedicated to the Nordic
regions, the companies hope to create a brand new generation of Flying Finns!” 

Mika Vehvilainen, Chief Executive of Finnair emphasized the benefits of the new
company: " We have joined the forces with Flybe to establish a strong,
complementary and cost-efficient operator in the Nordic market. In addition to
point to point connections, the airline will form an effective feeder platform
for our international operations. We also felt that thanks to Flybe's long
experience in regional point-to-point flying the company was the best possible
partner for a network operator like Finnair. Together we will be able to take
the customer experience on a new level.""We are establishing a strong player in the Northern European local aviation
market. The vision of the new company is in line with Finnair's partnership
strategy and it is an example of how we are building powerful networks with
other leading industry parties, such as Flybe. We expect that our partnership
will create a competitive and sustainable player in the Nordic markets. This
will benefit also those travellers who use Helsinki as their transfer hub on
their way to and from Asia and Europe."

Juhani Pakari, Chief Executive of Finncomm commented: “These negotiations have
been long and thorough, and we are very happy with the result. This is a good
solution for customers as well as for our staff. This is an excellent
opportunity to develop the company to be the best regional airline in Northern
Europe.” 

Finnair Plc
Communications
1.7.2011

Further information:
Erno Hildén, Chief Financial Officer
tel. +358 9 818 8550

Arja Suominen, Senior Vice President, Communications and Corporate
Responsibility 
tel. +358 9 818 4028

Kati Kaksonen, Investor Relations Officer
tel. +358 9 818 2780


Finnair
Finnair is the fast boutique airline between Asia and Europe. Established in
1923, Finnair is one of the world's longest continuously operating airlines.
Following its strategy, Finnair has in recent years emerged as a major player
in connecting East and West. Finnair's route network has the fastest
connections between 10 destinations in Asia and 50 in Europe making Helsinki a
significant hub between Asia and Europe. The company has determinately invested
in a new fleet which consumes significantly less fuel than older aircrafts.
Finnair Plus program serves Finnair's frequent flyers, who will also benefit
from Finnair's membership in the quality oneworld alliance and its cooperation
with other industry partners. 

Flybe
Headquartered in Exeter, UK, Flybe is Europe's largest regional airline and the
UK's largest domestic airline, supported by one of Europe's leading regional
aircraft maintenance, repair and overhaul (‘‘MRO'') businesses, trading as
Flybe Aviation Services and a developing training business, trading as the
Flybe Training Academy. 

The Group currently operates 69 aircraft from 14 UK domestic airport bases and
serves 73 airports in total over the UK and twelve other European countries.
Last year Flybe flew 7.2 million passengers, with business travel making up 45%
of its customers. 

Flybe floated on the London Stock Exchange in December 2010.