Finland is geographically isolated but air traffic connects it with the rest of the world. Thanks to air traffic, business men and women can make their meetings, machinery at factories receive spare parts, and Finns can travel south on their holidays to enjoy the sun. Without the ability to travel rapidly from one country or continent to another, Finnish know-how and our high level of education would not be known internationally, and our athletes and artists would not gain fame around the world. Air traffic also shapes our thoughts as through travel we learn about other cultures and different ways of seeing the world and our own humanity.

Air traffic is a necessity for Finnish industry and commerce. We cannot remain a far away land behind the sea. Finland must be able to continue creating wellbeing for its people. Indeed, alongside economic policy and innovation, air traffi c is one of the most important factors in Finland’s competitiveness. It connects Finland to the international export market. When the air traffic system works, Finland is a player in the market.

Finland’s air traffic system has three strengths: European air traffic, Asian air traffic and a network of airports that covers all of Finland. European traffic is the most important factor affecting Finland’s economic and commercial competitiveness, as 60 per cent of Finland’s exports are directed to the European Union.

THE DOORS ARE OPEN TO EUROPE AND ASIA

About 75 per cent of commercial air traffic to Finland passes through Helsinki-Vantaa. In 2007, a total of 17 million passengers passed through Finnish airports, of whom 13 million passed through Helsinki-Vantaa. Oulu was the second-largest airport, with about 840,000 passengers annually.

Helsinki-Vantaa functions as the gate to Asia traffic through which gateway travellers arriving in Finland continue on to Europe. There are non-stop fl ights from Helsinki to 40 European cities every day. The frequency of fl ights is also high: There are half a dozen fl ights per day to the most important destinations, with up to 20 fl ights per day to some cities! When one also takes the time zone difference into account, Finland has much better connections to Central Europe and Britain than many neighbouring countries.

Thanks to Helsinki-Vantaa’s role as a gateway, Finland has superior daily scheduled air services to Asia compared with our key competitors such as Sweden: 11 direct fl ights almost every day, 60 weekly fl ights, one to China and over 100 fl ights per month.

Without the advantage of the connections to Asia, there would be only half as many air traffic connections from Finland to the rest of Europe. That would not be nearly enough to maintain Finland’s competitiveness. Indeed, the preservation of Finland’s present competitive position requires that we can continue to maintain Helsinki- Vantaa’s strong gateway role, the “Finland hub,” in the future. The income created by this traffic also makes it possible for Finavia to maintain a network of airports that covers all of Finland.

THE “FINLAND HUB” IS IMPORTANT TO ALL OF US

From an international perspective, Finns have good air traffic connections. In relation to its population, Finland has one of the world’s most dense networks of airports. Thanks to this network, every Finn lives relatively close to an airport – and therefore usually only a one hour fl ight away from Helsinki-Vantaa, which thereby also connects Finland’s provinces to the rest of the world.

A comprehensive network of airports provides opportunities not just for business and Finns, but also to travellers arriving at Helsinki-Vantaa. Travellers arriving at Helsinki-Vantaa are only a one-hour fl ight away from Lapland and its unique and versatile nature. Increasingly many Asians travelling to Europe stop by in Lapland and are enchanted by its northern charm: the northern lights and snow. Many visitors also want to see Finland’s famous lakes and the Arctic Circle. There are many sides to Finland, and the network of airports makes all of them easily accessible to the traveller. When air traffic is evaluated as a form of transportation, it is important to recognise its central importance to Finland. Helsinki-Vantaa alone creates about 14,000 jobs directly, and about 72,000 jobs indirectly. Helsinki-Vantaa’s effect on Finland’s gross national product is over three per cent.

The effects of the emissions from air traffic are emphasised in some people’s imaginations. In Finland, emissions from aviation account for 2–3 per cent of emissions/ energy use. That is a comparable amount to the figures for railway traffic. If we include the effect of the infrastructure, emissions from air traffic exceed those from railway traffic. This is evident from the FINMIPS Transport study, for example, which examined the natural resources consumed by transport and its infrastructure in relation to the passenger-kilometres and tonne-kilometres travelled.

Although the effect of emissions from air traffic is relatively small at the present time, we nevertheless aim to bear our share of the responsibility to the full. We are committed to operating for the benefit of Finnish society and to support the most important Finnish values, such as Finland’s unique nature. Finavia bears its responsibility and does its share. At the same time, we must recognise the indispensability of air traffic for Finland’s international competitiveness.

SERVICES TO MEET THE NEEDS OF CUSTOMERS

If Finland is to maintain good air traffic connections to the rest of the world in the future, Finnish airports must remain competitive. Europe is Finland’s most important market. The competition over the gateway position is being fought, for example, between Helsinki and Frankfurt, Helsinki and Kastrup, Helsinki and Munich, Helsinki and Vienna, and between all of the airlines operating at these airports.

The elements of Finavia’s competitiveness include the unique structure of its business operations. In addition to its infrastructure such as airports and runways, the overall concept includes air navigation operations and the real estate serving the whole system.

Our investments are always motivated by customer demand. We build infrastructure and services on business principles and in response to the needs of customers. We must earn our customers’ confidence each and every day. When the air traveller feels safe and happy and receives the benefits they need, we have succeeded. That is why safety, quality, short turnaround times for machinery, cost-efficient prices and good customer service are particularly important for Finavia.

Of our major investments, the extension to the non-Schengen terminal and the luggage system (EUR 143 million) will be completed at the end of 2009. The new car park building for 2,400 cars (EUR 27 million) will be operational in January 2009. Finland’s first airport hotel operates in premises completed by our subsidiary in 2007. The hotel is now fully operational. Most of the hotel’s guests are gateway travellers from China, the United States, Russia and Britain.

With the help of its shareholders, our largest customer has made a significant strategic investment in new growth and development. Finavia will support this development by building new terminal premises as needed. In practice, the enduser of our services is the competitiveness of Finnish industry and commerce. That, in turn, has a direct effect on the well-being of every citizen.

A GOOD RESULT IS NECESSARY FOR INVESTMENTS

Finavia aims to achieve its objectives by using the business model adopted in 2007. We have identified our five main business areas in our strategy (Airport Operations, Air Navigation Operations, Commercial Oper ations, Real Estate Operations and Airpro’s Service Operations). We provide the ser vices of the network of airports by means of these five business areas, thereby ensuring the competitiveness of Finland and Finnish industry and commerce in the global market.

Our personnel policy is based on the principles of sustainable and continuous operations. Finavia has a functioning bonus scheme and personnel fund based on results. If we succeed, our personnel, who play a key role in providing our services, receive a share of the profit. This year, about EUR 1.8 million was paid into the personnel fund, from a total profit of EUR 31.4 million. This system provides a powerful incentive to our staff. It brings business principles close to each and every one of us and also incorporates an element based on results into remuneration.

In 2007, we exceeded our profit targets. We posted a new record, EUR 31.4 million profit on turnover of EUR 290.2 million. This is an improvement of EUR 10 million from the previous year – and was achieved without increasing traffic charges. The good result was achieved through cost-efficiency, and our motivated and competent personnel deserve a special word of thanks. Our customers and partners also played a role, with whom we create the conditions for the continued success of Finnish aviation in the future.

The good result is necessary to finance our solid investment programme. Over the coming year, we will improve the efficiency of our operations and our ability to respond to the needs of customers. In addition, we are developing our service concepts, control and management.

The state enterprise model has worked well in the maintenance of the network of airports. Transformation into a limited company, which is being considered by the State, our owner, would, however, ensure that the Finnish service package provided by Finavia would have the same prerequisites for competition than our competitors in Central Europe already have.

Finavia’s entire network of airports can also be easily managed within the limited company form. We are now on a sound footing, but we still have lots of work to do. This keeps us well motivated. At Finavia, we want to keep Finland fl ying in the future too!

Samuli Haapasalo
President and CEO