Finnair on Thursday announced that it's catering operations will not be sold to LSG Sky Chefs, as announced previously.

Both companies signed a memorandum of understanding regarding the sale on 12 March 2012. The acquisition of Finnair's catering operations by LSG Sky Chefs was subject to the approval of Lufthansa board of directors and it was anticipated that the acquisition would be closed by the end of the first half of 2012.

The board of directors at Lufthansa chose not to approve LSG Sky Chef's acquisition plans for Finnair's catering operations due to an investment freeze at Lufthansa.

Finnair is a client of LSG Sky Chef in a number of other airports and this customer relationship is expected to continue.

Last year the Finnair catering business in question had net sales of approximately EUR80m. The decision to not sell the catering operations of Finnair is not expected to impact on the company's announced cost saving targets or timing, which are to decrease the annual costs of Finnair by EUR140m by 2014.