Breakout session II: Crisis Management

Crisis Management Nordic IR Conference Taneli Hassinen

An exceptional situation A situation where the company’s ability to take care of its business is compromised Caused by... Accident, illness, injuries, loss of life Sabotage, catastrophe, strike or war Company under official and/or media observation Serious damage to property Activities of partners Resulting in... Interruption or down-sizing of business Staff not able to take care of their duties Dramatic drop in demand

“911” + 2h 35 min 15:45 00:00 First plane hits the WTC 15:50 00:05 Finnair gets first piece of information 16:04 00:18 Second plane hits the WTC 16:07 00:22 Information to the staff through the intranet 16:10 00:25 Increase in level of crisis management 16:15 00:30 Contact with Finnair flight AY005 on the way to NYC 16:30 00:45 First contacts from media 16:40 00:55 Decision to take AY005 back to Helsinki 16:45 01:00 Plane hits Pentagon in Washington 17:00 01:15 1. Finnair press release 17:00 01:15 Activation of de-briefing group 17:12 01:27 Security level upgraded 18:00 02:15 Re-routing of Bangkok flight 18:20 02:35 2. Finnair press release

New York => New York Terrorist attacks in New York First contact from analysts First Meeting of the crisis management group SeptemberFocus: 1. Safety and security 2. Adaptation of capacity and costs 3. Communication First negotiations with labour unions First profit warning Liquidation of Swissair SAS SK686 crash in Milan Cost cutting programme of 115 mill. euro Second profit warning Bankruptcy of Sabena American Airlines AA587 crash in New York Agreement on savings with five of seven unions

SARS epidemic Media “infected” first: loosing sense of proportion Only few victims in relation to other disease, but low predictability created fear among public Secrecy of the Chinese authorities delayed effective actions and created unreliability Travel ban lowered demand in China Resulting in capacity cuts Importance of Asia in Finnair strategy became a challenge to IR Losses were tens of millions of euros

Development in Demand AEA and Finnair AEA: Association of European Airlines

Demand in Finnair Asian Traffic vs. AEA AEA: Association of European Airlines

Big questions How to handle a crisis as such How to communicate in and about the crisis How to make most of an unwanted situation

Key objectives Immediate reaction according to the recovery plan Presence in media also steers market sentiment take care of media needs: Communicate actively and immediately Openness towards media Ensure that media has the right facts Provide staff with correct information Well-considered statements on economics As the acute phase is over, communicate with capital markets

Prepare yourself in advance Be prepared - plans prepared in advance help to act correctly and quickly Plans for operations Plans for communication Spokespersons and guidelines for them Templates for releases Long-term relations with media and capital markets - background information

A CRISIS well-handled, can turn into a VICTORY