January 15, 2013 / 9:41 AM / 5 years ago

UPDATE 1-Finnair CEO leaving to lead Cargotec -magazine report

* Vehvilainen led Finnair turnaround

* Finnair shares fall 6 pct, Cargotec up 3 pct

HELSINKI, Jan 15 (Reuters) - Finnair Chief Executive Mika Vehvilainen will leave the airline to lead cargo handling equipment maker Cargotec, Finnish financial magazine Talouselama reported in its online edition on Tuesday.

Cargotec said in October that Chief Executive Mikael Makinen was stepping down to lead its marine unit which plans to list in Asia. The company has been struggling to improve profitability.

Vehvilainen is credited for leading a turnaround at Finnair, which expects to have turned profitable last year for the first time since 2008.

Finnair handed over a third of its short-haul routes to Flybe in 2012 to cut costs and focus on more profitable Asian routes. It has also accelerated cost cuts to stave off competition from discount carriers.

But Vehvilainen was also the target of a police investigation last year for suspected bribe-taking related to a real estate deal. He was found innocent, but said he regretted making the arrangement.

Finnair declined to comment, calling the report “market rumours”. Cargotec was not immediately available for comment.

Finnair shares fell 6.0 percent to 2.80 euros while Cargotec shares rose 3.1 percent to 21.15 euros by 0926 GMT.

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