Finland Times

Helsinki, January 24 -The government has appointed a working group for drafting an air transport strategy examining the current situation of Finland's network of airports and other necessary developments, said a press release issued by the Ministry of Transport and Communications on Wednesday.

The working group is assigned to produce a comprehensive evaluation of country's airport network, using a variety of criteria. The airports will also be examined in terms of the service level they offer to passengers, and regional accessibility  in addition to the economic indicators.

The needs of airport managing bodies and airlines will also be taken into consideration during the comprehensive evaluation.

"The strategy project is aimed at securing Finland's competitiveness and maintaining good air connections to and from the country, " said the Transport minister, Merja Kyllönen.

She said that the air transport strategy is a wide-ranging project in which the goals and needs of a variety of different actors must be taken into account.

"Premised on these considerations, we are making efforts to draft a strategy enabling us to pursue a socially, environmentally and economically sustainable transport policy for the future", said Kyllönen.

The air transport strategy project scheduled to be completed by the end of 2014, is part of the Government Transport Policy Report which was submitted to Parliament in spring 2012.

.As far as the level of service is concerned, it is important that the journey to the airport takes less than three hours, and that the total length of the entire travel chain from the regions to Helsinki-Vantaa airport does not exceed six hours.

A three-hour train or bus trip is a competitive alternative to short-distance flights of less than an hour, since air travel involves the journey to the airport together with the waiting time at the airport.

For this reason, it is essential that the service level of long-distance passenger transport be examined as a whole, also in terms of alternative public transport connections.

The strategy will also evaluate what significance airports have for the development of business activities in the area concerned. The needs of tourism and of businesses operating in the impact area of the airport are to be examined separately. In addition, airports located in different parts of the country have varying needs.

Finavia's network of airports relies on one airport

In Finland, airports are maintained according to the so-called network principle. This means that the profits and losses of different airports are cross-subsidised. Alongside Finland, a similar system in the EU is in place in Spain and Portugal.

The state-owned Finavia Corporation is in charge of maintaining a total of 25 airports in Finland. Inspira, a consulting firm, has carried out a survey commissioned by the air transport strategy group of the Ministry of Transport and Communications on the profitability of airport and air navigation services at these 25 airports. The survey neither evaluated the effects of individual airports on the expenses of the airport network, nor examined how the network deficit is targeted at various customer groups.

In 2011, regional airports made a network deficit of some EUR 22 million. Airport operations are profitable only at Helsinki-Vantaa airport and at three airfields used for military aviation.

The maintenance and air navigation services of regional airports are funded by profits generated by commercial services, which means that a cross-subsidisation system is in place between Helsinki-Vantaa and the other airports. Despite this, air traffic charges at Helsinki-Vantaa rank among the lowest of main airports in Europe.

The results of Inspira's survey indicate that Finland's network of 25 airports is dense in relation to its population and size. The most important factor affecting differences in profitability are transport volumes, which vary between the airports. Operations are very capital-intensive, and the cost structure is fixed. Personnel costs account for a substantial share of the expenses.

According to the survey, a major challenge is that income statements do not sufficiently take into account investments necessary for the functioning of the airport network. Full cost-relatedness would mean that the unit rates in the low-volume parts of the network would grow 2- to 4-fold.