Finland's national carrier, which reported a bigger-than-expected quarterly loss due to higher fuel costs and a weaker economy, said it aimed to cut 80 million euros in costs this year as part of a plan to cut 140 million by 2014.

"The potential joint venture would expand our home base to cover the entire Nordic region," chief executive Mika Vehvilainen said on Thursday.

"This requires a more cost-competitive business model for our short-haul traffic, and this is what the potential partnership aims at."

Finnair (FIA1S.HE) has been expanding routes to Asia with direct flights from Helsinki to Bangkok and Singapore, and is planning more destinations like Chongqing, China.

It forecast passenger traffic capacity would grow y around 5 percent in 2012, with most of that in Asia.

The company forecast the first half would be "clearly loss-making". Its fourth-quarter operational loss was 31.6 million euros, compared with a forecast for 28.4 million in a Reuters poll.

Finnair shares fell 4.2 percent to 2.52 euros by 0900 GMT.

The airline defines its 'operational' result as earnings before interest and tax EBIT.L excluding non-recurring items, capital gains and changes in the fair value of derivatives and in the foreign exchange rates of overhaul provisions.

(Reporting by Eero Vassinen; Editing by Ritsuko Ando and Dan Lalor)

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