Commercial Operations and Official Functions to be Separated

In line with the general European trend as well as a proposal by a committee of the Finnish Ministry of Transport and Communications, Finland too, is moving towards setting up a separate government body of about a hundred people in 2006 to manage all official aviation functions. Following this reform the CAA will become a purely commercial enterprise charged with running state owned airports and air navigation services. About 1,700 people work for the CAA.

Even now, the majority of CAA operations are commercial; only three percent being of an official nature. When the CAA was set up in 1991 the option of detaching the official aviation functions into a separate organization was discussed. However, because of synergy benefits and various interdependencies it was decided that such duties, which require specialist, professional qualifications, should remain as part of the commercial enterprise, though in such a way that the official regulatory body should be independent in its operations and its decision-making authority. Only its funding has come through commercial operations.

The system has been effective and, in the opinion of industry professionals, it has been clear and functional. Over the years, however, the fact of having the commercial and official functions under one umbrella has aroused mistrust and criticism over appearances and, following the introduction of the new national constitution, questions of principle, too.

The reform will remove the awkward question of appearance whilst highlighting the CAA’s commercial enterprise features. The reform is regarded within the CAA as a natural development, since the official functions have already grown within the organization to form an independent and separate unit. The present arrangement has been good for the regulatory body in that it has guaranteed it sufficient funding. It is to be hoped that even after reorganization that body will still receive sufficient resources for its important duties and that official aviation functions will be taken sufficiently into account in government budgets.

No longer having to fund the official body, the CAA will be able to cut traffic charges for users of air navigation and airport services in 2006 by 2 %, which will be a good thing for the aviation business. On the other hand, corresponding charges may have to be made for regulatory services, which could be a significant change especially for light aviation.

The reform will require amendments to existing aviation regulations, to define the duties of the authority. The law regarding the commercial activities of the CAA will also have to be altered so as to remove the regulatory functions from the CAA’s duties and to take account of a general commercial enterprise Act which came into force at the beginning of 2004.