Skip to main content

Supplementary budget proposal by the Ministry of Finance is promising news for the competitiveness of Finnish air traffic

Press release
Published
23.8.2013 at 11:06
The Ministry of Finance proposes that the government invest €200 million in Finavia Corporation to strengthen the capital structure of the company. If the government's investment in Finavia is implemented, Finavia will be able to launch an investment scheme with a total value as high as €1 billion. Finavia regards the proposal as promising news for the competitiveness of the Finnish business sector and air traffic.

"Finavia's capitalisation would be very important to retain the competitiveness of Helsinki Airport compared to other international airports. However, now we should take time and see what the final content of the supplementary budget proposal is, and how it is received by the parliament," says Kari Savolainen, the CEO of Finavia.

Capitalisation would allow Finavia to take a loan and launch development investments at Helsinki Airport. These investments would be based on the demand for air traffic at the airport, and their first stage would focus on addressing the bottlenecks in the existing infrastructure. The goal is to ensure that Helsinki Airport's  strong competitive position in transit traffic between Europe and Asia is retained.

The strengthening of the capital structure would also enable Finavia to be able to allocate an increasing share of its business cash flow to implementing postponed maintenance and repair investments at its main provincial airports.

"Helsinki Airport has achieved a strong position in transit traffic between Europe and Asia. Therefore, Finland has exceptionally comprehensive flight connections in comparison to the size of the population, and this provides Finland's business sector with jobs and prerequisites for operations. It is important that we ensure that this important competitive edge is also retained in the future. The strengthening of Finavia's capital structure would provide good resources for that. We are confident that, through its business income, Finavia can repay the government's investment if and when the airport investment projects are implemented on the basis of actual air traffic demand," says Savolainen.

Finavia will continue to prepare its investment scheme as soon as the government makes the decision as the owner to invest in the company. Finavia's assessment is that, if implemented, the €1 billion investment scheme could create more than 15,000 person-years of work.

Background

 – The role of Helsinki Airport as a leading transit airport has become more important in recent years. Previous investments have enabled smooth transfers on routes between Asia and Europe, and an increase in capacity to 15 million passengers.

"Transit airports are competing to an increasing extent over transit passengers, and many competitors of Helsinki Airport have launched extensive investment schemes to take place in the next few years to improve their competitiveness and to meet the needs of air passengers."

"The increase in the volume of air traffic will cause congestion at the airport in the future. Finavia predicts that it will have 20 million passengers by the early 2020s."

Development Reports