Finland's flag carrier Finnair Oyj plans to cut about 500 jobs to counter soaring fuel costs and a sharp fall in demand, it said today, sending its shares down to their lowest in over 3 years.
The company's fuel bill will rise by between €160 million and €180 million this year compared with last year, the airline said in a statement.
"Demand has decreased and this decrease has accelerated at such a rate in the past weeks that together with the price development of fuel, Finnair's (performance) ... has significantly weakened," the airline said.
It added that to ensure the company's growth strategy, it needs additional cuts of at least €50 million per year.
The airline plans to cut about 500 jobs to reflect production cuts, it said.
Finnair has increased its flights between Europe and Asia in recent years.
Last month, Finnair said its profits would fall from last year's levels, and its May passenger load factor - a measure of how well an airline fills its seats - fell 7.3 percent year-on-year to 65 per cent.
Finnair pilots are in the middle of wage talks with the airline, and late last month rejected a mediator's offer of pay hikes of about 15 per cent over the next three years.