Strike by Finnish cabin crews grounds flights

A walkout by cabin crews grounded 110 Finnair flights Tuesday, and the airline warned the strike will ground more domestic and international air traffic.

The Finnish national carrier said it will cancel 200 flights on Wednesday involving 10,000 passengers.

The budget airline Blue 1 also said it will cancel up to a third of its daily flights.

It was unclear how long the strike would last after labor talks between unions and management broke down early Tuesday. No new talks were planned in negotiations for a collective agreement for cabin crews that began in February.

Finnair issued a profit warning saying the strike would cause daily net losses of more than €2 million ($2.6 million), resulting in a full-year operational loss.

"It is expected to give rise to significant earnings losses for Finnair due to a loss of bookings in the period during and surrounding the strike," the airline said. "In addition, significant additional costs will arise from exceptional arrangements."

Finnair's share price plunged more than 4 percent to €4.89 ($6.36) in Helsinki.

National Conciliator Esa Lonka said he had been unable to propose mediation because the two sides were so far apart, but gave no details of the dispute.

"Mediation has been halted. I cannot see room to propose a solution to the negotiating parties, so it means that the labor dispute will continue as a strike," Lonka said after all-night talks broke down.

The dispute follows a two-day strike last month when 900 airline mechanics walked off the job to protest the use of non-permanent staff by Finnish airlines and to speed talks on wage increases.

Finnair, which has been struggling with declining demand, competition from budget airlines and overcapacity, has laid off hundreds of workers and doubled an annual savings program target to €200 million. Most new cuts were aimed at personnel costs.

The dispute with cabin crew hinges mainly on working hours and days off. Finnair said union proposals for a new labor contract would increase the airline's costs by more than 20 percent.

Finnair CEO Mika Vehvilainen said the company was seeking ways to be more efficient and competitive by "making better use of our partner network" and possible structural changes.

"At the same time, we are also examining the distribution of work to enable our personnel to perform their work better," Vehvilainen said. "We will change the workload associated with long-haul flights. By limiting participation in time-difference flights, we can reduce the load on personnel."

Finnish Cabin Crew Union spokeswoman Thelma Akers said Finnair was not proposing changes in shifts that would violate international flying regulations, but would reduce days off.

"What they are proposing would cut three free days a month from long-haul cabin crew members, and we cannot accept that," Akers said. "Our workers need the time to rest after long, strenuous shifts."

Last year, 1,000 baggage handlers held a five-day strike that stranded thousands of Finnair passengers and left a backlog of 12,000 pieces of unsorted luggage. Also, Finnair pilots went on a two-day strike to protest a proposed labor contract that included outsourcing.

Finnair, which is 56 percent government-owned, flies to 50 destinations with a fleet of 63 aircraft. It employs 7,600 people.