Finnair says Chinese access to Russian airspace creates unfair competition

By Doyinsola Oladipo

NEW YORK, Sept 10 (Reuters) - Finnair said Chinese airlines' continued access to Russian airspace has created "extremely unfair" competition, highlighting a challenge that has weighed on the Finnish carrier since Moscow closed its skies to Western airlines.

Chinese carriers continued to add capacity between Europe and China while benefiting from shorter flight times through Russian airspace, CEO Turkka Kuusisto told a group of reporters on Wednesday at the company's New York office.

The carrier long relied on Helsinki's proximity to Asia to carry passengers on the shortest routes between Europe and cities such as Beijing, Shanghai and Tokyo. Since losing access to Russian airspace, Finnair has been forced to reroute flights and redeploy capacity, while Chinese rivals continue to enjoy a cost and time advantage.

"In my opinion, it's an extremely unfair and unlevel playing field," Kuusisto said.

A flight from Shanghai to Helsinki now takes more than 12 hours, compared with about eight hours when Russian airspace was available, he said.

The airline is also facing growing competition from Gulf carriers. Finnair last month canceled winter service to Doha and Dubai because of security concerns linked to the conflict in the Middle East. The routes account for about 3% of capacity and passenger traffic.

"If and when the situation gets de-escalated, and there will be a permanent peace, we need to rethink," Kuusisto said. 

Emirates meanwhile is set to launch daily Dubai-Helsinki flights.

Despite the competitive pressures, Kuusisto said Finnair remains confident in Helsinki's role as a connecting hub, arguing rivals have historically struggled to build sustainable networks through the airport.

"I doubt that they're optimized when it comes to connecting somewhere else out of Helsinki. And that is our unique value proposition." 

Kuusisto also said Finnair has not encountered jet fuel shortages across its network due to the Middle East conflict, adding that more than 80% of its short-haul flights from Helsinki could operate by carrying enough fuel for both directions if necessary. The carrier has hedged 81% of its third-quarter fuel consumption and 71% of its fourth-quarter needs.

(Reporting by Doyinsola Oladipo in New York; Editing by Sayantani Ghosh and Chris Reese)