Finnair CEO Pekka Vauramo Emphasizes the Importance of Service as Strategy
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APEX Insight: During his keynote presentation at APEX EXPO 2016, “Passenger Focus and the Keys to Success,” Finnair CEO Pekka Vauramo described an airline with a defined growth strategy – one that emphasizes service.
The only way for airlines to excel is to cut costs. This is a falsehood that Pekka Vauramo could not wrap his head around when he stepped in as chief executive officer of Finnair in 2013, in the midst of a drastic cost-cutting program. “This cannot be how an airline becomes a great airline, simply by cutting the costs,” he said.
During his keynote presentation, “Passenger Focus and the Keys to Success,” Vauramo described an airline with a defined growth strategy – one that emphasizes service. “In the service business, we need to have motivated personnel and aligned objectives,” he said.
“In the service business, we need to have motivated personnel and aligned objectives.” – Pekka Vauramo, Finnair
Vauramo talked about the thousands of passenger encounters Finnair’s frontline staff face every year, and how a bad experience can be poisonous for an airline. “In this business, there is still room for good service,” he said, adding, “Service is also an important element of making money.”
Finnair markets itself as the shortcut between Asia and Europe and works closely with its hub, Helsinki Airport, to realize this positioning. Instead of focusing on Finland as a final destination, it has reimagined itself as an attractive layover, with a 35-minute connection time. “The transfer experience needs to be part of our thinking,” Vauramo said.
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On-time flights are important, but Finnair aims to provide additional service by relieving some of the stress passengers experience when arriving at the airport through technology. “Part of [the anxiety] could be solved by digitalizing, by providing more information, making people more comfortable,” Vauramo said.
Finally, emphasizing service as strategy, Vauramo concluded his presentation with one final thought: “We have educated the travelers that the only thing you should look at when you travel with airlines is the price of the ticket … and we need to educate the market away from that.”