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Commentary: Air travel and tourism have significant cascade effects on Finnish businesses

Article published
25.9.2020 at 10:08
Finavian hankintajohtaja Tuomas Pitkänen
Tourism accounts for 2.7 per cent of Finnish GDP and provides jobs for more than 140,000 people in Finland. There is no doubt that the COVID-19 crisis that has hit the aviation and tourism sector has significant economic cascade effects on a number of industries, including the service sector, construction and logistics, writes Finavia’s Chief Procurement Officer Tuomas Pitkänen.

Finavia is a significant buyer of goods and services. We have over 3,000 suppliers of goods and services and we spend just under EUR 500 million annually on our purchases. We buy a substantial share of the goods, services and capital goods we use from Finland. Finavia plays an important role in the Finnish business sector, as an employer and as a promoter of the country brand.

The aviation and tourism sector have been hard hit by the COVID-19 crisis. Since the spring, passenger volumes have fallen by nearly 90 per cent and Finavia’s revenue has declined by more than 70 per cent. The company is implementing a strict cost-cutting programme. All of our employees have been temporarily laid off and we have reduced our procurement activities to a minimum. However, it appears that even that is not enough.

The reduction in air traffic means that, in addition to Finavia, the crisis has a direct negative impact on the over 20,000 people and 1,500 companies that operate at Finavia’s airports. Most shops, restaurants and other service providers have had to temporarily close down. We have helped these businesses by offering substantial discounts on rent and being flexible with regard to other contractual terms as well.

In turn, Finavia now needs flexibility from its business partners to make it through the worst of this crisis. We have approached our suppliers and service providers to request longer payment terms and discounts. Most of them have understood our situation and been receptive to our proposals. We are very grateful for this. It helps create a foundation for the future and long-term partnerships.

These are difficult times, but we believe that flexibility from all parties involved will help us work together and make it through this disaster that has hit the aviation and tourism sector.

Responsible procurement

Discounts on rent offered to businesses at Finavia’s airports