Finavia’s network of airports covering all of Finland includes 25 airports. The Airport business area’s objective is to maintain the competitiveness of Its network of airports and to continue to develop the network. This requires that the services provided to customers are at a high European level. Finavia is responsible for both the external and internal infrastructure of airport terminals and associated services, the construction of premises and the smoothness of the entire service chain. All of Finavia’s services are provided in response to the needs of customers. The Airport business area is developing its operations by designing processes to be smooth from the perspectives of airlines and passengers in particular.

Finavia wants to provide airlines with fast aircraft turnaround times and luggage handling processes, high-quality apron and business area services and sufficient terminal capacity. For passengers, Finavia is developing faster check-in times, smooth security checks and pleasant terminal areas. In 2007, 17 million air travellers passed through Finavia’s airports, 13 million of whom passed through Helsinki-Vantaa. Oulu is Finavia’s second most busy airport.

CREATING THE BASIS FOR TRAVEL

Through its airports, Finavia creates the basis for Finland’s competitiveness and the travel of Finns. Ensuring the viability of travel, a growing industry, is becoming more important every year. Air traffic is essential for all of Finland.

Just before Christmas, up to 200 charter fl ights arrive at Finavia’s tourist airports in Lapland during a single weekend. There are over 10 charter fl ights to Kittilä alone every weekend during the Christmas season. The small Enontekiö airport is the most international airport in Finland due to its focus on tourist traffic. Many other airports, such as Kuopio and Ivalo, also have excellent means for promoting tourism thanks to their airport services.

Finavia continually works to further tourism together with Finland’s provinces and local tourism companies and travel agencies. A good example of this is the Lake Terminal completed in Kuopio in January 2008, which is the first of its kind in the world. It opens a new kind of route from the airport directly to the city centre over the water – or over the ice – and on to tourism experiences.

COMPETITION BETWEEN EUROPE’S AIRPORTS

Finavia’s objective is to develop Helsinki- Vantaa into the world’s best transfer airport. The location of Finland’s main airport is geographically optimal: the fastest and most direct route between Europe and Asia runs through it, as well as the shortest route from Delhi to New York, for example. But a good location alone is not enough. About 50 airlines operate regularly at Helsinki-Vantaa. Airlines choose which airport to use by considering the length of the route as well as the airport’s level of quality, smoothness and prices, and the reliability of operations.

Helsinki-Vantaa competes over its transfer passenger traffic, and thus its status as a gateway, with airports in neighbouring countries and with other gateway airports in Central Europe. The competition over prices is fierce and is intensifying. For example, during the year under review, Arlanda Airport cut its prices below the level charged by Helsinki-Vantaa.

In 2007, Finavia’s airport charges were below the average for European airports. Among the main competitors, Arlanda was less expensive than Finavia, and Copenhagen was more expensive. European airports compete from very different starting points. Airports that benefit from significant domestic traffic have been able to reduce their prices. Many Central European airports are independent commercial actors and, unlike Finavia, do not subsidise an extensive national network of airports. Finavia competes by offering its customers a high level of safety, affordable prices compared with the European average, and fast aircraft turnaround times.

Finland’s strong points also include cap acity, quality and services based on demand. Helsinki-Vantaa Airport has placed among the top European airports in international passenger surveys for the last year years. In the global ASQ (Airport Service Quality) study carried out in 2007, passengers chose Helsinki-Vantaa as the third-best airport in Europe.

INVESTMENTS TO MEET PASSENGER NEEDS

Finavia has undertaken new measures to respond to the demands of Helsinki- Vantaa’s growing traffic and to improve the smoothness of its airport services. During the year under review, the security checkpoint for transfer passengers at the international terminal was expanded by building an additional line and a new security checkpoint was built at departure gate 33.

The foundation stone of the extension to the international terminal, construction of which started in 2006, and the new luggage handling centre was laid in November of the year under review. Following the completion of the new premises in the autumn of 2009, the capacity of Helsinki-Vantaa’s terminals will increase to 16 million passengers and luggage handling capacity will increase to 13.5 million pieces of luggage per year. That is an increase of about three million passengers and pieces of luggage compared with 2007. There are plans to expand the present terminal by constructing three passenger bridges for the Schengen section and two passenger bridges for the non-Schengen section, which will increase the capacity of the international terminal to 18 million passengers per year.

The total budget of the extension to the international terminal is EUR 143 million. The investment is the biggest in Finavia’s history. The extension will mainly serve the traffic to the Far East. Following the expansion, Helsinki-Vantaa will have eight jetways for wide-body aircraft. In addition to air traffic services, Finavia is actively developing Helsinki- Vantaa’s other services. LAK Oyj has, for example, commissioned the construction of an international level hotel at the airport.

KEY EVENTS IN 2007

Basic repairs of aprons and the network of taxiways continued at Helsinki-Vantaa in April. The work was completed near the end of September. During the renovation work, most of the air traffic used the normal takeoff and landing directions. Another major paving project was carried out at Kuopio Airport which was closed during July while runways and taxiways were paved and other basic repair work was carried out.

Kittilä Airport was closed from Midsummer to the middle of August and Savonlinna Airport was closed for almost all of August. Scheduled air services to Varkaus were interrupted during March of the year under review and scheduled air services to Lappenranta were interrupted in September. Air traffic will resume at both airports during 2008.

The study of airports in the Helsinki area commissioned by the Ministry of Transport and Communications addressing the relocation of operations from Malmi Airport was completed in August of the year under review. The study concluded that the Backas area of Porvoo would be the best location for a new airport in the Helsinki area. If the new airport is built, a suitable option for Finavia might be, for example, a stake in the company operating the airport.

Kajaani Airport was chosen as the 2007 Airport of the Year in November. The choice was based on, for example, customer satisfaction and the work of supervisors.

A decision is expected near the end of 2008 on the European Union’s new airport charges directive. The objective of the directive is harmonise the pricing of airport services, and thus to improve the transparency of pricing and the equality of customers. When it enters into force, the proposed directive will require, for example, regular consultation with customers in connection with changes with charges, which has already been part of Finavia’s operating procedures.

Tighter security requirements concerning passengers and luggage have, in recent years, increased charges in the aviation sector and slowed down the smoothness of travel. In 2007, outsourced security check services increased by EUR 8.0 million and they account for a total of 11 per cent of Finavia’s costs.

No new regulations connected to the security of civil aviation entered into force during 2007. The atmosphere was one of expectation during the year under review, as a comprehensive reform of the package of regulations governing security for civil aviation is forthcoming from the EU. The reform will probably lead to no essential loosening of the present requirements.

OUTLOOK

The Airports business will continue to develop a new structure and processes, deepen cost control and improve profitability. International price competition will lead to improvements in efficiency as it limits the opportunities for raising prices. The general increase in the price level and the acceleration of infl ation also create a need for the continual improvement of efficiency.

The marketing of Finavia’s network of airports will be improved by establishing a marketing unit at the beginning of 2008. Its task is to market Finavia’s entire network of airports as a package and to study the various opportunities for growth in transit, tourism, discount fl ight and freight traffic in Finland. Finavia is seeking new customers for its airports and new partner airports in at least the Far East.

AIRPORTS 2007
	PASSENGERS 2007		ARRIVALS 2007

	DOMESTIC	INTERNATIONAL		COMMERCIAL	GENERAL AVIATION	MILITARY AVIATION	OTHER
HELSINKI-VANTAA	2 875 296	10 266 326		89 444	304	974	1 693
OULU	764 674	75 484		5 395	2 529	773	1 043
ROVANIEMI	348 275	101 661		2 763	1 032	4 677	685
KUOPIO	270 430	33 774		2 823	1 629	5 467	757
VAASA	213 833	108 095		4 349	2 272	190	814
KITTILÄ	145 675	96 291		1 086	288	221	47
JOENSUU	132 436	10 836		1 535	1 295	62	181
TURKU	130 666	178 116		5 028	6 051	315	4 734
JYVÄSKYLÄ	125 476	13 465		2 240	2 566	10 345	652
IVALO	117 305	28 565		750	246	65	113
TAMPERE-PIRKKALA	113 713	573 998		5 113	4 488	5 563	7 547
KEMI-TORNIO	89 661	2 804		1 374	535	4	342
KAJAANI	87 061	3 741		854	106	86	31
KRUUNUPYY	84 615	11 629		1 741	1 502	328	234
KUUSAMO	84 279	23 876		669	119	13	12
PORI	58 962	6 725		1 600	1 535	108	9 267
MAARIANHAMINA	53 269	10 032		2 919	350	0	520
LAPPEENRANTA	18 955	4 036		769	496	63	310
SAVONLINNA	17 558	1 774		533	93	7	43
VARKAUS	2 337	30		119	4	2	19
HELSINKI-MALMI	1 174	0		11	11 022	31	41 812
ENONTEKIÖ	856	24 230		95	0	1	3
KAUHAVA	203	0		5	301	7549	102
KUTTI	9	38		9	189	3299	518
HALLI KUOREVESI	0	17		0	248	2455	130
TOTAL	5 736 718	11 575 543		131 224	39 200	42 598	71 609