2016 Responsibility report
Finavia+Responsibility+report+2016
Finavia+Responsibility+report+2016
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>Responsibility</strong> at Finavia A part of society Safety Staff wellbeing Environmental responsibility GRI<br />
Performance of network airports<br />
In <strong>2016</strong>, tourism boosted domestic traffic, especially at airports<br />
in Lapland, which also increased the overall passenger volumes<br />
at network airports. In relation to the extent and service capacity<br />
of our network, the passenger volumes at many of the airports<br />
remain fairly low, and the network posted negative results.<br />
Airport operations are a highly capital-intensive business,<br />
and a significant share of the costs are fixed and determined<br />
by regulations. The share of personnel costs is considerable,<br />
and on average about 40 per cent. The financial results of individual<br />
airports are mainly affected by the following factors:<br />
• Passenger volumes<br />
• Structure of air traffic<br />
• Structure of customer base<br />
• Service hours of airports<br />
The profit level of some network airports has improved considerably<br />
in recent years as a result of higher operational efficiency and<br />
passenger volumes. Airport network loss is covered with the commercial<br />
revenues of Helsinki Airport. Finavia does not <strong>report</strong> the<br />
financial results of individual airports.<br />
Profitability of medium-sized airports<br />
The financial results of the medium-sized airports were substantially<br />
in the red. The formation of the financial result of a fairly large<br />
airport in <strong>2016</strong> is shown below as an example: The airport served<br />
several hundred thousand passengers. Despite the growth, the<br />
loss amounted to EUR 1.8 million (-1.7).<br />
Traffic<br />
revenues<br />
from services<br />
paid by airlines<br />
AIRPORT<br />
EUR 2.4<br />
million<br />
Traffic<br />
Area<br />
Services<br />
EUR 1.8<br />
million<br />
TOTAL REVENUES<br />
EUR 3.2 million<br />
Terminal<br />
Services<br />
EUR 0.6<br />
million<br />
Revenues<br />
from services<br />
paid by<br />
passengers<br />
EUR 0.7<br />
million<br />
Security<br />
Services<br />
EUR 0.5<br />
million<br />
Air<br />
Navigation<br />
EUR 1.2<br />
million<br />
TOTAL EXPENCES<br />
EUR 5.1 million<br />
Other<br />
revenues<br />
(e.g. rental<br />
income):<br />
EUR 0.2<br />
million<br />
Others<br />
EUR 1.0<br />
million<br />
Uniform pricing<br />
In Finland, the same service level-based charge is payable for<br />
the same service at all airports, irrespective of the profitability of<br />
individual airports. This is the network principle. Uniform pricing<br />
at different airports would not be possible without the network<br />
principle.<br />
According to EU regulations, each individual airport should be<br />
profitable, but the network principle allows loss-making airports<br />
to be supported using the commercial income of Helsinki Airport.<br />
Without the network principle and the subsidies from the income<br />
of Helsinki Airport, Finavia would have to substantially increase the<br />
price level of its network airports to make their operations economically<br />
viable. Due to the low traffic volumes, the possibilities<br />
for increasing commercial income elsewhere, other than at Helsinki<br />
Airport and the larger airports in the network, are limited.<br />
The decrease in domestic air traffic is likely to continue at several<br />
airports in the long term. This is caused by demographic structure<br />
changes and improved service level of other modes of transport.<br />
Finavia estimates that the need to internally subsidise the<br />
airport network, including investment expenditure, will increase to<br />
EUR 35–40 million by the end of the decade.<br />
THE LOSS COVERED WITH COMMERCIAL<br />
REVENUES FROM HELSINKI AIRPORT IN <strong>2016</strong><br />
EUR -1.8 million<br />
<strong>Responsibility</strong> <strong>report</strong> <strong>2016</strong> 19