Air traffic prices
Finavia aims to keep price changes at a reasonable level so that any possible increase is a maximum of 50 % of the expected inflation. The objective does not, however, include costs, which may be incurred due to unforeseen external factors such as security regulations. Flight safety requirements have continuously increased, which is a consequence of the development of safety within the aviation sector and increasingly strict EU security regulations. As a result, Finavia’s security costs have increased significantly and for the most part without due warning.
The pricing objective set in 2006 was achieved. Traffic and security charges increased on average by 4.1 %. Most of the increase was as a result of the increase in the security charge from EUR 2.44 to EUR 3.24 (33 %). Not including the effect of the security charge, the rise traffic charges was 0.86 %, which was clearly less than inflation and corresponded to Finavia’s long-term pricing objectives.
In addition to increasing the security charge, some changes were also made to the charging structure. As a consequence of the changes, domestic traffic charges increased by an average of 5.5 %. Not taking the security charge into account, the rise was 1.5 %. International charges increased by 3.7 %. The change was 0.6 % if the security charge is not included. The effect of the price changes per passenger was slightly under one euro: 88 euro cents, including the rise in the security charge.
The profit made by Finavia in 2006 stood at EUR 22.8 million. The profit target set for Finavia by the Government was EUR 17.0 million. Th e profit increased by EUR 0.6 million compared with the previous year (EUR 22.2 million).
Finavia’s turnover in 2006 was EUR 266.9 million, which was an increase of EUR 23.9 million (9.8 %) on the previous year. Most of the growth in turnover, EUR 17.2 million, accrued from the growth in traffic revenues. Commercial revenues increased by EUR 9.1 million. Revenues accrued from official functions (EUR 0.9 million) were no longer included in turnover on the separation of the Civil Aviation Authority from Finavia. EUR 1.6 million in revenues from public tasks was transferred to traffic revenues.
Revenues from international traffic increased EUR 10.1 million on the previous year and revenues from domestic traffic by EUR 4.5 million. Revenues from military aviation increased by EUR 2.2 million as a result of the change to the pricing basis. The growth in commercial revenues is based on the increased demand for commercial services as a result of increased passenger numbers.
Three property sales or land exchanges with sales prices or exchange values totalling EUR 1.8 million (the Act on the Right to Transfer State Real Estate Assets) tookplace during 2006. A sales profit of EUR 0.7 million was entered for these.
Actual operating expenses in 2006 stood at EUR 203.3 million. Operating expenses increased by EUR 9.8 million (EUR 193.5 million) compared with the budgeted expenses and EUR 22.6 million (EUR 180.7 million) compared with 2005.
Personnel expenses were in line with the budget, even though the expenses
contained a EUR 0.6 million provision as unbudgeted items for pension
contributions and a EUR 0.4 million retroactive increase in pension contributions
from 2005 as well as a EUR 1.0 million profit bonus to be paid to the
Personnel expenses decreased by EUR 0.2 million from 2005. Personnel expenses for 2005 included personnel costs for official functions totalling EUR 5.6 million. Calculated using the adjusted personnel expenses, Finavia’s personnel expenses increased by EUR 3.1 million compared with 2005 if the write-down of the provision, refunds of pension contributions and additional contributions and profit bonus as well as the official functions are taken into account.
The number of employees working at corporate headquarters increased during
the year under review. Three new members of staff were recruited for management
positions at Finavia and the resources of the safety and quality unitwere
strengthened. As a result of the separation of the official functions,
Finavia’s own competence was strengthened by establishing its own
security inspection unit.
Other expenses exceeded the budgeted EUR 9.1 million, and compared with the previous year expenses increased by EUR 22.8 million. The increase in adjusted other expenses compared with the previous year was EUR 24.8 million.
The cost pressures on both security checks and airport maintenance have increased with the growth in traffic. The largest increase in operating expenses, totalling EUR 1.6 million, was caused by the increase in the prices of fuels, maintenance acquisitions and the increased use of anti-skid chemicals resulting from the difficult weather conditions in winter. The costs of security checks increased by EUR 9.3 million from 2005 as a result of regulations adopted under Regulation (EC) No. 2320/2002, government provisions and the rectification of deficiencies pointed out in audits by the EU Commission. The costs for other outsourced services (guarding, meteorological service and passenger transport services) increased by EUR 3.5 million.
|Finavia’s key figures:||2004||2005||2006 actual||2006 budgeted||2006|
|- change %||6,8||4,0||0,3||9,8|
|- margin as % of turnover||24,4||26,2||24,4||24,3|
|- profit as % of turnover||7,4||9,7||8,7|
|- profit as % of turnover||6,4||9,1||8,5||6,7||8,5|
|Return on capital invested, % (1)||2,8||3,8||3,0||3,0||3,9|
|Return on basic equity %||8,1||12,0||9,3||9,3||12,4|
|Return on total equity %||2,1||3,1||2,4||2,3||3,1|
|Solvency ratio % (2)||76,2||76,4||78,4||77,8||77,6|
|Investments as a % of turnover||20,6||19,8||29,4||27,2||22,4|
|Average traffic price change % (3)||-2,3||-0,5||2,9||4,1|
|Number of personnel||1 819||1 807||1 448||1 748||1 707|
|Salaries and bonuses||68,6||71,1||69,5|
(1) Profit before extraordinary items + financing expenses / invested capital (balance sheet total - interest-free debt)
(2) Own equity + provisions/ balance sheet total
(3) The price change in 2003 includes the new security charge introduced as a consequence of an increasing number of security checks. Most of the price change in 2006 is explained by the increase in the security charge. The increase in traffic charges excluding the change in the security charge was 0.86 %.
CAPITAL INVESTMENTS 2006
COMPARISON OF RESULTS 2005–2006
TRAFFIC CHARGES FOR INTERNATIONAL TRAFFIC 1996-2006
TRAFFIC CHARGES FOR DOMESTIC TRAFFIC1996-2006
AIR TRAFFIC CHARGES 2006
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