The Changing Air Transport Market

The air traffic market characteristically follows general economic trends very closely. In the past few years, however, this previously clear dependency has changed. On the one hand, economic development has not stimulated traffic so evidently, while on the other, new airline concepts in the form of low-cost airlines have brought in new customers.

At the moment the low cost airlines account for about 20 % of Europe’s internal air travel market, and in some sectors even more. It is part of the low-cost concept that airlines only operate so-called point-to-point traffic, with no onward connections. These companies seek efficiency in many ways, providing only the bare essential services.

A number of new low cost airlines entered the Finnish market in 2003, whilst the traditional airlines have also introduced some low-cost features. As a result, fares have plummeted and competition among the airlines has increased.

In the main, the CAA offers the same airport and air navigation services at the same price, to budget airlines and others alike. However, in order to meet market demand, the CAA is seeking ways to match differing standards and costs with differently priced services and products. For traffic area services (such as runway maintenance) and air navigation services this is not usually possible, because safety requirements demand only the highest of standards. However, differentiation is sometimes possible for terminal and handling services. The Tampere-Pirkkala low cost -terminal is an example. And any airline may hire this terminal.