Finavia Corporation stated (16-Oct-2013) is starting a major development programme at Finland's Helsinki Airport, which is expected to have 20 million passengers p/a in the early 2020s. The development programme will be carried out between 2014 and 2020 and the focus will be on increasing check-in and transit travel capacity and on improving traffic arrangements. The aim is to ensure that Helsinki Airport will be able to maintain its strong competitive position in transit traffic between Europe and Asia. Finavia CEO Kari Savolainen said, “Passengers do not want any hitches and they expect quick transfers, high-quality services and a wealth of experiences. In a highly competitive environment, the success of an airport depends on these factors, and they must also be the focus areas at Helsinki Airport. One in every three passengers choose their flight routes on the basis of the transit airport". The company noted that previous investments have turned Helsinki Airport into a major transit hub between Asia and Europe and helped to increase its annual capacity to 15 million passengers. However, an increase in air traffic will cause congestion at the airport in the coming years. “It is estimated that about 20 million passengers will be using Helsinki Airport in the early 2020s. This means that we need bigger facilities and that Helsinki Airport must be able to keep up with the demands and improve its processes. Maintaining our principal airport as a leading transit hub will ensure that Finns will continue to have extensive flight connections and it will also boost the competitiveness of the Finnish economy,” the CEO said. The Helsinki Airport development programme 2014–2020 will cost around EUR900 million. The development programme will start in terminal 2 with improvements in the check-in area. At the same time, more detailed design work will start and final decisions on priorities concerning the new facilities will be made. Construction of the new infrastructure is expected to start in 2015. One option being considered by Finavia is the construction of a satellite terminal adjacent to terminal 2. Finavia is also planning to extend terminal 2 into the areas of car parks P1 and P2. An infusion of capital in which the Finnish government will invest a total of EUR200 million in Finavia will allow the company to start the development programme. It will also enable Finavia to strengthen its solvency ratio and make it better placed to borrow money. In addition to the development programme, Finavia will carry out repairs and maintenance at Helsinki Airport, at its most important provincial airports and in air navigation services. The work, which is expected to cost around EUR100 million, will include paving of runways and terminal maintenance. The extension of the airport after 2015 will not have any effect on the existing aircraft noise zones because the changes are not expected to have any impact on the manner in which the runways are operated. [more - original PR]
Finavia is starting EUR900m development programme at Helsinki Airport
You may also be interested in the following articles...
Finnair and TAP Portugal: their location based long haul niche strategies compared
Both Finnair and TAP are based in peripheral corners of Europe: Finnair in the extreme northeast and TAP in the southwest. Both are based in countries with relatively small populations, but they have developed networks that capitalise on their geographic location to carry connecting traffic from across Europe and elsewhere to long haul destinations in other continents.
TAP's main long haul market is Upper South America (primarily Brazil), but it also has a secondary long haul niche in Africa. Finnair's main long haul market is Northeast Asia, with an additional presence in South and Southeast Asia. Both also operate to the US. On short haul, LCC competition has been a bigger threat to TAP than to Finnair, but cost savings are important to both.
TAP and Finnair have similar traffic volumes, unit costs and average trip lengths. Moreover, both have struggled to generate sustainable profitability. This report compares and contrasts Europe's two leading independent exponents of the location based long haul niche strategy. Both are set to accelerate their long haul growth.
Finnair accelerates capacity growth, led by long haul; seeks cost efficiency through fleet & labour
In 2016 Finnair accelerated its rate of capacity growth after a modest return to expansion in 2015, following cuts in 2014. It also experienced a fall in unit revenue (as did most European airlines), most notably in the regions of highest capacity growth, i.e. the long haul markets North America and Asia.
Asia is Finnair's most important long haul market (Japan and China are its two biggest markets by ASKs) and its ranking by seats on routes between European and NE/SE Asia is disproportionate. It has ambitious growth plans in the region and will increase frequencies to Tokyo and Hong Kong this summer. Its long haul network, which will also extend to San Francisco this summer and Goa next winter, is largely founded on connecting traffic via its Helsinki hub.
Finnair's return to capacity growth has coincided with a return to profit, but lower fuel prices were the main driver of its bottom line improvement. Its profit margins remain slim and, beyond the vagaries of fuel price benefits, Finnair aims for more sustainable unit cost cuts. Fleet strategy and labour productivity form a two pronged attack on its cost base.