Board of directors' report

Board of directors' 2006 Finavia group organization The deveploment of Finavia's business environment in 2006 Finavia's service objectives Finavia's environmental work Profit deveploment Financial effects of the separation of the flight safety authority Finavia group profit 2006 Finavia income distribution Capital investments 2006 Financing 2006 Personnel Changes in administration Operating risks and risk management Group structure and changes in the group relationships during the financial year Material events after the financial year and prospects for 2007 Income statement Balance sheet Cash flow statement Signatures of the financial statements and annual report Auditors' report

MATERIAL EVENTS AFTER THE FINANCIAL YEAR
AND PROSPECTS FOR 2007

In January 2007, the EU Commission published its proposal for an airport charge directive. It is expected that the proposed directive will be considered during 2007. The aim of the proposal is to harmonize airport practices in pricing services, which would improve the transparency of pricing and equality of customers. From Finavia’s point of view, the Commission’s proposal includes positive changes and ones that will support current pricing practices, although the smooth functioning of the procedures proposed must essentially be included in the continuing preparations.

In addition to the proposed directive, it is expected that the regulation on charges for air navigation services relating to the Single European Sky package of regulations that came into force at the beginning of 2007 will have an impact on Finavia’s current pricing of services to some extent. The transfer over to the pricing practice in accordance with the regulation on charges will take place at the latest during 2010.

Finavia forecasts that its financial results will most likely improve during 2007. If the national economy continues its strong growth, air traffic will also grow. Finavia forecasts that air travel will increase by nearly 9 % in 2007. The factors behind the growth are the strong growth in Far Eastern traffic and its resulting growth in European traffic. The development of domestic air traffic is expected to be more moderate and will be around 3 % in 2007. Finavia will continue to implement its major investment programme. The profit target of EUR 27 million for 2007 presented by the Board of Directors of Finavia and set by the Ministry of Transport and Communications will be achieved through the current development of air traffic.