By Anne Kauranen HELSINKI, March 23 (Reuters) - Finnair said on Monday it will renew its European fleet with an order for 18 E195-E2 narrow-body aircraft from Brazilian manufacturer Embraer, moving
Finnair picks Embraer over Airbus for its narrow-body fleet renewal
Finnair's Strategic Fleet Renewal and Market Impact
By Anne Kauranen
HELSINKI, March 23 (Reuters) - Finnair will renew its European fleet with an order for 18 E195-E2 narrow-body aircraft from Brazilian manufacturer Embraer, it said on Monday, as it moved away from its current supplier Airbus.
The order - the Finnish flag carrier's largest investment in over two decades - deals a further blow to France's Airbus, after Embraer's E2 outsold the Airbus A220 three to one last year. Finnair said it also plans to acquire up to 12 Airbus A320 or A321 from the used aircraft market.
Aircraft Features and Environmental Benefits
"This is a highly versatile aircraft and one of the quietest on the market," Chief Executive Turkka Kuusisto told Reuters, referring to the E195-E2.
"It will reduce our CO2 emissions by 30% per passenger carried. In addition to enabling us to operate efficiently within Finland and widely across Europe, it also supports our climate objectives," he added.
Embraer's Market Position and Global Trends
Embraer Capitalising on Global Short-Haul Fleet Renewals
EMBRAER CAPITALISING ON GLOBAL SHORT-HAUL FLEET RENEWALS
The Embraer order includes options for 16 additional aircraft and purchase rights for a further 12, Finnair said, adding it had signed deals with RTX's Pratt & Whitney for spare engines and maintenance services.
The total value of the company's planned investments through the end of 2029 will amount to around 2 billion euros ($2.31 billion), Kuusisto told Reuters, declining to share further details.
Global Demand for Regional Jets
Embraer, which has a particular focus on regional aircraft below 150 seats, has benefited from a global boom in demand for jets in that category as airlines catch up with fleet replacements put on hold during the pandemic, the planemaker's CEO Arjan Meijer told Reuters in January.
"We look forward to helping Finnair modernise its short-haul fleet to better match demand, reduce emissions, and unlock growth," Meijer said in a statement following Finnair's order.
Airbus Response
Contacted by Reuters, Airbus declined to comment on its customers' fleet strategy.
"Finnair remains a valued, long-term partner, and we are proud to support their continued operations as a major operator of the Airbus A320, A330 and A350 families," an Airbus spokeswoman wrote in an emailed statement.
Fleet Renewal Rationale and Future Outlook
Optimal Size for Finnair
OPTIMAL SIZE FOR FINNAIR
Finnair, which is majority-owned by the Finnish state, has navigated years of upheaval, first due to fallout from the COVID-19 pandemic and, since 2022, from the mutual airspace closures between Russia and EU countries following Russia's invasion of Ukraine.
The 18 new Embraers, of which the first three are to be delivered in 2027, will double Finnair's seat capacity on its regional routes within Finland, the Nordic countries and Northern Europe, Finnair said.
Decision Factors
Kuusisto said it was the E195-E2's size with 134 seats onboard that tipped the scales in Embraer's favour.
($1 = 0.8673 euros)
(Reporting by Anne Kauranen in Helsinki and Tim Hepher in Paris; Editing by Stine Jacobsen and Joe Bavier)
