Rapporteur: Finances, staff skills and international competitiveness of aviation companies must be safeguarded

Travel restrictions imposed to prevent the spread of the coronavirus pandemic have plagued the aviation industry and Rapporteur Kari Savolainen has been seeking ways of ensuring its future sustainable growth. His initial recommendation is to safeguard the finances of industry enterprises and the skills of their staff, with longer term investment focusing on such areas as cost-effectiveness, sustainability and quality of service.

Rapporteur Kari Savolainen submitted his aviation sector report to State Secretary Kimmo Tiilikainen for the attention of Minister of Economic Affairs Mika Lintilä and to State Secretary Ville Kopra attending on behalf of Minister of Employment Tuula Haatainen at a press conference on 22 March.

“Finland’s accessibility to air traffic before the pandemic was exceptional in relation to the size of the home market, exceeding that of the other Nordic countries in many respects. Helsinki-Vantaa international airport was clearly the largest hub in the Nordic countries in terms of the number of high quality connections enabled by interchange traffic, ranking 12th in importance for Europe as a whole prior to the pandemic,” Savolainen explained.

“The aviation industry is one of many sectors that have suffered during the coronavirus pandemic. The impact of this industry on Finland’s overall competitiveness is quite significant, with the Helsinki-Vantaa region alone generating about 4 per cent of Finland’s GDP. An interruption in air traffic affects the whole of Finland, including service sectors such as tourism,” says Minister of Economic Affairs Mika Lintilä.

Helsinki-Vantaa international airport is a key gateway between Europe and the Far East that served nearly 22 million passengers in 2019. Nearly 40 per cent of this total were international transit passengers.

“Every effort must be made to sustain the competitiveness of this sector so that Finland continues to benefit from optimal air connections. It is important to ensure that we can reopen air traffic with the greatest efficiency as restrictions are eased and tourism returns. We cannot afford to lag behind the most important competitor countries,” Minister Lintilä stresses.

“Many measures to improve conditions in the aviation sector have already been taken and initiated. Support has been allocated to Finnair through loan arrangements and participation in a share issue, and Finavia has also been recapitalised. Uusimaa Employment and Economic Development Office has made very particular investments in managing employment and developing skills, establishing a dedicated team for the aviation sector, broadening the range of services provided, and tailoring them to the needs of aviation staff and employers. Finland has also sought support for these services from the European Globalisation Adjustment Fund,” observes Minister of Employment Tuula Haatainen.

“It nevertheless remains clear that there is still a great deal to be done. The work of the Rapporteur gives us more tools to ease the situation. The report will now be forwarded for further work by a follow-up group chaired by Permanent Secretary Raimo Luoma. The intention is for the follow-up group to conduct an urgent evaluation of the recommendations for action and their effectiveness, together with potential implementation measures,” Minister Haatainen explains.

The aviation sector must be helped over this acute crisis with investment in its long-term competitive edge

“The general forecast is for air traffic volumes to begin growing slowly in 2021, but a return to pre-pandemic levels is not expected until 2024 at the earliest. For Finland to participate in the growth of air traffic, our existing success factors must be safeguarded and the air traffic system must be made even more competitive,” Rapporteur Savolainen noted.

The report proposes measures for managing the acute situation of air traffic during pandemic restrictions. The Rapporteur also recommends longer-term restructuring that could help guide the entire tourism sector back towards sustainable growth.

The key measures proposed by the Rapporteur are:

1. Safeguarding businesses and finance over the pandemic. The report prioritises the creation of new subsidy and loan schemes for air transport and similar sectors.
2. Safeguarding staff and skills during an emergency. Staff skills and qualifications must be maintained to ensure an adequately capable workforce in the sector when the crisis recedes. Support should focus on education and on the practical training required by the sector. Investment should be made in restructuring protection systems to ensure retraining of permanently redundant staff for work in other sectors.
3. Health-secure travel as an enabler of business continuity. The sustained state of emergency in air traffic caused by the pandemic has lasted for a long time and similar situations may also occur in the future. Clear practices and ways of working must be established for health-secure travel in order to ensure that air traffic retains reasonably operability during a pandemic, and that recovery is effective when the disease subsides.
4. Improving the competitiveness of Finland’s air transport. Strategies for improving competitiveness include creating integrated travel chains based on varying modes of transport. This can be achieved through digitalisation and improved operating conditions for air traffic connection modes such as road, rail and light aviation. Greater cost effectiveness also enhances competitiveness. The development of affordable fossil-free liquid fuel is essential, not only in terms of emissions, but also to maintain reasonable air transport costs.
5. Aviation sector lobbying. Air traffic regulations that are equitable and allow for the specificities of our transport system are important to a small economy that relies on air transport. It is accordingly vital to boost lobbying at all levels and remain involved in the preparation of regulations within the European Union and elsewhere.
6. Promoting the competitiveness of tourism will increase demand for air transport, enabling greater accessibility. The aviation industry is closely linked to tourism. Promoting the competitiveness of tourism will increase demand for air transport, and growth in air traffic will make Finland more accessible as a tourist destination. Finland must increase its popularity as a tourist destination all year round, adding attractive destinations besides Lapland and the Helsinki Metropolitan Area. Further investment should also focus on commercialising and packaging tourism services, and on developing sales channels.

Inquiries:

Timo Nevaranta, Special Adviser to the Minister of Employment, tel. +358 50 574 1430
Jenny Hasu, Special Adviser to the Minister of Economic Affairs, tel. +358 40 658 3510
Kari Savolainen, Rapporteur, tel. +358 40 772 7282
Marjukka Aarnio, Counsellor, Ministry of Economic Affairs and Employment, tel. +358 29 504 7150