Board of directors' report
FINAVIA’S SERVICE OBJECTIVES
On the basis of section 8(2) of the State Enterprise Act (1185/2002), the steering Ministry decides on the service targets and performance target to be set for Finavia. The following sets out the objectives and their implementation in 2006.
The safety and effi ciency of airport and air navigation services
Finavias aim is to provide airport and air navigation services for
the needs of air traffic as safely and efficiently as possible. Finavia
also provides services that are required by the defence administration
and the rescue authorities and for training operations in the aviation
sector. Finavia manages its range of air traffic and other services in
the manner required of a profitable business. The aim is that the necessary
operating requirements for commercial aviation are provided at the airports
maintained by Finavia and within Finnish airspace at a high and safe level
and that air traffic delays resulting from Finavia’s operations
are less than half the European average.
Safety
Finavia invested signifi cantly in developing the safety of its own operations. Finavia described several sub-sectors within air navigation and the organization and functioning of the safety management system, in line with the requirements of the European Union’s Single European Sky regulation. In relation to this, Finavia changed its organization on 1 April 2006 so that a safety and quality unit was set up within the corporate headquarters reporting directly to the President & CEO. Finavia’s own investigation of discrepancies, own audits, the coordination of safety information and the preparation of guidelines for safety inspections and reporting come under the unit.
The work that has been undertaken by Finavia for years to lower the reporting threshold also produced results. Finavia collected a total of 1,289 notifications from the air navigation units and the airfield branches of airports. The majority of these concerned the operations of aircraft or their technical problems, but also to a considerable extent Finavia’s operations. Finavia’s figures for technical fault reporting are not included in the aforementioned figure.
There were no accidents as a result of the Finavia’s operations. There were two serious incidents, of which one involved the slipperiness of the runway and the other the unauthorized crossing of a runway by a vehicle.
The various management groups of the safety management organization have met regularly in 2006. The safety and quality committee met 9 times, likewise the safety and quality committee of the Air Navigation Department also met 9 times, the safety and quality committee of the Airports Department met 11 times, and the safety management groups of the airports and units met a total of 151 times.
The safety and quality unit performed audits at all the airports operated by Finavia and the air navigation centres. The main objective of the audits was to revise the critical processes in air safety and to carry out inspections so that each process description corresponds to the prevailing local practice. This objective was achieved.
Finavia’s safety audit manual was published in September 2006. Similarly, safety audit procedures were published, which, if complied with, fulf l Eurocontrol Safety Regulatory Requirement 4, ESARR4, and the requirements of the EU’s SES with regard to safety audits. During 2006, 13 safety audits were initiated in accordance with the safety audit manual. Safety audits are part of the safety management system which can be used to identify, analyse and manage aircraft risks relating to the system for the whole duration of the life cycle, right from the planning stage.
During 2006, 26 members of staff were trained to undertake safety audits. The individuals trained were employees from both the airports and corporate headquarters.
In December 2006, Finavia was granted a licence for air navigation operations in accordance with the new European regulations, and it was also appointed as the provider of the services.
Efficiency
The efficiency of Finavia’s key business areas, i.e. airport services and air navigation services, are measured through personnel working years and the services produced.
The efficiency of Finavia’s airport services measured as passenger numbers per personnel working year improved 14.0 % compared with the previous year (the change from 2004 to 2005 was 4.3 %). The change is explained by the separation of official functions from Finavia into a separate agency, the Finnish Civil Aviation Authority. If the number of staff working in official functions is also deducted from the figures for 2005, efficiency improved 7.7 %. The number of flights per personnel working year increased 7.4 % (0.3 %). If the official functions are deducted, the number of flights per personnel working year increased 1.5 %.
| comp. to previous year, % |
2004 | 2005 | 2006 |
| Number of passengers/ personnel working year |
9,8 % | 4,3 % | 14,0 % |
| Number of flights / personnel working year |
9,1 % | 0,3 % | 7,4 % |
Maintenance and capital expenses for airport services increased 21.7 % (0.5 %) on the previous year, totalling EUR 25.6 million. Operating expenses increased 23.7 % (2.5 %) and capital expenses increased 6.3 %. Although the number of passengers increased by 8 %, the unit performance cost increased 12.7 % (3.0 %).
The rise in operating costs of airport services is explained by the rise in the cost of fuels (EUR 0.3 million), the rise in passenger transport (EUR 0.5 million), increased use of anti-skid substances on runways because of difficult weather conditions (EUR 0.7 million ), the increase in maintenance and repair costs (EUR 1.0 million ), official charges set by the Civil Aviation Authority (EUR 5.8 million) and the increased requirements concerning passenger security checks (EUR 9.3 million).
The increase in capital costs (depreciations) (EUR 1.4 million) mainly stems from the capitalization of the renovation costs for Helsinki-Vantaa Airport’s 1st runway as of 1 November 2005 and the capitalization of the taxiways constructed in 2006.
Expenses for air navigation services increased 3.1 % on the previous year (6.3 %), totalling EUR 2.6 million.
The growth resulted from increased operating expenses, since capital expenses remained at the 2005 level. The increase in operating expenses mainly resulted from official charges for the Civil Aviation Authority (EUR 1.2 million), the increase in expenses for the meteorological service (EUR 1.0 million) and the increase in personnel expenses (EUR 0.8 million). While the number of flights increased 1.7 % compared with 2005, the unit performance cost only in-creased 1.4 % (6.7 %).
Before the separation of the official functions, a total of EUR 3.3 million in costs for official functions was allocated to airport and air navigation services in 2005 through general expenses. In 2006, the costs for services included a total of EUR 7.6 million in costs for official functions.
In the latest cost efficiency comparison of the air navigation sector published in 2004 by Eurocontrol, Finavia was placed among the top eight most efficient service providers. Costs per flight hour were EUR 273 (EUR 283) in Finland, whereas the costs in the comparison countries were on average EUR 392 (EUR 400). The comparison contained over 30 Eurocontrol countries and the publication compared the cost efficiency of both the enroute service as well as the airports’ air navigation service (costs/fl ight hours). A report based on the figures for 2005 will be completed by the end of the spring in 2007.
| 2002 | 2003 | 2004 | |
| Finavia’s position in the report |
7. | 8. | 8. |
| Number of organizations in the report |
32 | 34 | 34 |
| Costs € / flight hour in Finland |
317 | 283 | 273 |
| Costs € / flight hour in Europe |
405 | 400 | 392 |
Punctuality
Finavia monitors delays via the regional air navigation service primarily on the basis of the data from Eurocontrol’s Central Flow Management Unit (CFMU). The CFMU coordinates and if necessary implements, at the request of
member states, regulation on air traffic and air traffic flow on a European-wide basis.
The punctuality of air traffic is good in Finland. In 2006, there were almost 264,000 controlled flights in Finland, of which 0.63 %, i.e. 1,672 flights, were delayed for reasons that were due to Finavia. The corresponding figure in 2004 was 2.05 % (5,522 flights) and 1.35 % (3,536) in 2005. There were a total of 9,850 delayed flights in Finland, of which the delays resulting from Finavia accounted for 17 %. The corresponding figure in 2004 was 42 % and in 2005 it was 29 %. According to the CFMU, flights in Europe were delayed on average by around two minutes and in Finland flights were delayed below the average by one minute.
There were 130 mandates to balance the air traffic load, of which around half (62) resulted from the high demand
for Helsinki-Vantaa Airport in the afternoon. The secondhighest number of mandates resulted from staff shortages
(19), air traffic control capacity, ATC (18) and the weather and its related factors (14).
Finavia’s operations at Helsinki-Vantaa were punctual in 2006. Only 0.7 % of all departing flights were delayed by more than 15 minutes as a result of Finavia’s operations. The corresponding figure for 2005 was 0.6 %. However, air
traffic operations increased by over 5 % in 2006 compared with the previous year. The data is based on Finavia’s punctuality statistics for Helsinki-Vantaa Airport for 2006.
The most common reasons for delays to air traffic in Europe are technical inspections and repairs to aircraft , rotation problems of air carriers, congested airspace and weather conditions.
The Association of European Airlines (AEA) monitors the punctuality of air carriers and airports every quarter and compiles a summary of the annual level. In compiling the statistics only delays of over 15 minutes to scheduled flights are taken into consideration. The AEA has so far only published the statistics for the first three quarters of 2006 and the comparison of carriers for the third quarter. The last quarter of 2006 and the annual summary have not been published yet. In the statistics on delays by the AEA, Helsinki-Vantaa Airport come out as being one of Europe’s most punctual airports.
International competitiveness
Finavia’s airports are maintained and developed
as one entity, similarly the commercial demand for
their services. Finavia’s aim is to provide airport and
air navigation services that are internationally competitive
in price and quality.
Finavia constantly monitors the development of air traffic charges in Europe, and aims to retain its current position in relation to the pricing of other airports. The international comparison of charges includes Europe’s main airports (23 airports), and a comparison is carried out with a few of the most common types of aircraft . The comparison considers all airport and air navigation charges (which include en-route fees). Helsinki-Vantaa Airport comes in the group of the 6–7th
cheapest airports. The position changes slightly depending on the type of aircraft chosen. For example, with the Airbus 230 type of aircraft , the airports at Rome, Tallinn, Madrid and Dublin are cheaper than Helsinki-Vantaa and Riga is the cheapest. On the other hand, the most expensive airports include Frankfurt, London Heathrow, Vilnius, Zurich, with Amsterdam the most expensive. The air traffic charges at Helsinki-Vantaa are 20 % cheaper than the charges of the 22 other airports in the comparison. Helsinki-Vantaa is also the cheapest when it is compared only with the main airports in the Nordic Countries. The most expensive of the main airports in the Nordic Countries is Stockholm-Arlanda and after Helsinki-Vantaa the cheapest is Keflavik. The charges at Helsinki-Vantaa are an average of 19 % cheaper than the other Nordic Countries.
Passengers voted Helsinki-Vantaa as the third best airport in the world in its own size category and the third best airport in Europe. The data was revealed in the global Airport Service Quality (ASQ) survey that measures passenger satisfaction, which was carried out by the Airports Council International, ACI.
In the survey passengers were asked to assess items measuring the quality of airports, including the general ambience of the airport, politeness of the staff , signage, cleanliness of terminal premises, the smooth operation of security checks, opportunities for shopping and eating and the feeling of security.
85 airports took part in the survey carried out in 2006, during which a total of around 148,000 passengers from around the world were interviewed.
Finavia regularly surveys and assesses the satisfaction of domestic air passengers with the level of service. A survey of the service is carried out by scheduling season. Summary feedback of the summer and winter traffic seasons is reported once a year.
The overall grade for the airports of 5.63 (on a scale of 1–7) has fallen slightly compared with the previous year (5.69). The decline in the overall grade is explained by the effect of increased security checks on customers. Of the factors concerning the services, the service attitude of the staff was again assessed to be the best. The best airports in terms of the general assessment and positive trend were the airports at Rovaniemi, Helsinki-Vantaa and Joensuu. Rovaniemi Airport was chosen as airport of the year 2006 partly on the basis of the good customer feedback.
Efficiency and quality of security checks
Security checks at Finavia’s airports are carried out
to the extent and level of detail laid down by EU
regulations. The level of detail is verifi ed in the audits
performed by the EU, Civil Aviation Authority
and Finavia, which the airport’s security operations
have to pass. Security checks are carried out in such
a way that the requirements placed on the smooth
functioning of the airport’s operations are fulfi lled
and the waiting time for security checks during busy
periods is a maximum of 15 minutes.
Finavia has invested significantly in developing security measures to bring security checks at the airports up to the level required of Regulation (EC) 2320/2002 and the regulations and official provisions adopted pursuant to it. At the same time, more attention has been paid to the smooth operation of the entire security inspection process and to a customer focus as part of the overall provision of customer services at airports. There is no need to wait for the security inspection, or then the waiting time only lasts a few minutes. The target level of the waiting time at busy periods has been met. The entire security inspection process is being constantly improved as part of the terminals’ customer processes.
Interim evaluation of the functioning of the demarcation of responsibility between Finavia and the State
Finavia will draw up an interim evaluation by the
end of 2006 for the Ministry of Transport and Communications
on the Government decision (29 December
2005) on demarcating liability for damages
and insurance, which will assess the workability
and appropriateness of the demarcation of responsibility.
The evaluation will consider the overall benefit
to central government fi nances, the implementation
of competition neutrality and the provision
of public service tasks and Finavia’s risk management
system.
The evaluation presented in the objective was drawn up for the Ministry of Transport and Communications in December 2006 from the perspective of the overall benefit to central government finances, the implementation of competition neutrality and provision of public service tasks as well as Finavia’s risk management system. The Government decision has worked well judged on various criteria, and the arrangement has been appropriate.
Profi t target
The Ministry of Transport and Communications sets
Finavia a profit target of EUR 17 million for the year
2006.
The profit target for 2006 was achieved, and the operating profit was EUR 22.8 million.
Profit-crediting target
The Ministry of Transport and Communications sets
the profit-crediting target of Finavia as 50 % of the
profit for 2006, however a minimum of EUR 5 million.
The Board of Directors of Finavia proposes half of the profit of the financial year, i.e. EUR 11.4 million, be credited as profit for 2006.
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