Helsinki airport and the Finnish market

Image: Lordi
Finnish heavy metal band, Lordi, won the Eurovision Song Contest in 2006.

Not since the 1952 summer Olympics has there been as much international attention on Helsinki as the recent staging of the 52nd Eurovision Song Contest, which attracted a record 42 countries as competitors. The privilege of holding this international showcase of singing talent had been earned by Finland after winning the contest in 2006, thanks to the unlikely success of a heavy metal band called Lordi, whose anthem ‘Hard rock hallelujah’ had emphatically brushed aside all competition.

Finland’s location in the top right hand corner of Europe sharing borders with Sweden, Norway and, more exotically, Russia makes it seem rather remote from the rest of Europe. And with a climate that is hardly likely to attract sun-seekers, the recent growth in air travel has been less dramatic than at many other airports across Europe where LCCs have stimulated leisure traffic growth (although there are undoubtedly underrated attractions for the discerning).

Helsinki-Vantaa airport

Traffic at Helsinki-Vantaa (HEL) airport grew by 9.1% in 2006, passing the 12 million mark for the first time. This was achieved primarily through growth in international traffic. Analysing data for the airport since 1998 shows that domestic traffic through Helsinki has been virtually unchanged. Overall domestic traffic has grown by less than 1% in the last eight years, while international traffic has grown by 42.8%.

Image: Helsinki-Vantaa airport
Helsinki-Vantaa – just voted ‘Best Airport in Europe’ in a survey by Reader’s Digest (the world’s largest selling monthly magazine).

Chart: Helsinki airport passenger traffic 1998 - 2006

Given Helsinki’s location it is not surprising that the busiest routes are to neighbouring Nordic countries. The Top 10 international routes by weekly seat capacity for April 2007 are shown in the table below:

Table: Helsinki Routes
Source: OAG

National carrier Finnair also operates on all of these routes and has around 61% of seat capacity on international routes this summer. The next largest international carrier at the airport is Blue1, the SAS-owned airline, with just over 12%.

The Top 10 domestic routes by weekly seat capacity for April 2007 are shown in the table below:

Table: Top 10 domestic routes
Source: OAG

Competition exists on nine of the top 10 domestic routes, with Finnair having a 54% share of capacity and FinnComm being the main rival with 26%. Blue1 has just over 18% of the market. However, if we look at frequencies, Finnair and FinnComm both have 41% of the market to Blue1’s 13% reflecting FinnComm’s use of primarily 50-seat aircraft compared to Finnair’s 100-seat aircraft.

Finnair: half all revenue Asian linked

The national airline saw traffic grow by 3.2% in 2006 to 8.79 million passengers, achieving a passenger load factor of 75.2% (up 2.5 points versus 2005). The fastest growth came from Asian traffic, which grew nearly 26% with the launch of a new route to Delhi and capacity expansion on several other routes.

Helsinki’s location makes it a good hub for connecting traffic between Europe and Asia and nearly half of all scheduled revenue is linked to Asian traffic. For summer 2007, Finnair has abandoned its policy of having intermediate stops on some of its Asian flights and will focus on direct flights. These are to Bangkok, Beijing, Delhi, Guangzhou, Hong Kong, Kansai, Mumbai (new this summer), Nagoya, Osaka, Shanghai and Tokyo. However, the onward connection from Bangkok to Singapore has been discontinued and the planned Kuala Lumpur route has been shelved.

Domestic and North Atlantic traffic in 2006 were down 2.5% and 11.1% respectively. European traffic was up 7.4% to 4.50 million passengers partly thanks to new routes from Helsinki to five new destinations – Edinburgh, Geneva, Kiev, Krakow and Pisa/Florence, while St. Petersburg and Warsaw received additional frequencies. For 2007, the airline plans to add new services to Bucharest, Gdansk, Ljubljana, Lisbon and Nuremberg, while Manchester and Madrid get new direct services instead of having to pass through Stockholm.

Image: FlyNordic airline

FlyNordic
(but not in Finland)

Logo: FlyNordic

Finnair has its very own LCC, but it does not operate in the Finnish market! Instead FlyNordic, which was created when Finnair bought an 85% stake in Nordic Airlink, operates out of Stockholm Arlanda. Initially flying just within Scandinavia the airline has dabbled with services to mainland European destinations but without much conviction.

Operating a fleet of MD80s the main routes are from Stockholm to Copenhagen, Lulea, Oslo and Umea. In 2006 the airline carried 1.2 million passengers (+0.7%). In April 2007 it was revealed that Finnair was selling the airline to Oslo-based LCC Norwegian in return for a 5% stake in Norwegian which could be increased to 10% by the end of 2008. Norwegian will also start to interline on Finnair’s Asian routes. The FlyNordic brand will remain, at least for the time being. With Norwegian also planning to lease 11 737-800s it seems likely that the 160-seat MD80s will be phased out in the not too distant future.

Finncomm – does what it says on the side of the plane.

Logo: FinncommFinnish Commuter (FinnComm) is a privately owned airline operating two Embraer ERJ145s (49 seats) and three ATR 42-500s (48 seats) on 12 domestic routes and has just launched an international route to Tallinn in Estonia.

The airline also utilises six Saab 340s operated by Golden Air. The airline co-operates with Finnair on connections to Far East destinations through the Helsinki hub.

Blue1 – nearest thing to a Finnair rival

Logo: Blue1Formerly known as Air Botnia the airline was acquired by SAS in 1998 and re-branded Blue1 in 2004 and became the first regional airline to join the Star Alliance.

In 2006 the airline carried 1.85 million passengers (+22%) on a fleet of 12 aircraft (a mix of Avro RJs and MD90s). Last year 11 new routes were added within Europe and since 29 April 2007 a Milan service has been operated twice a week.

Map: Helsinki routesIn April 2007, the airline transported a total of 153,000 passengers split between domestic traffic (44,000, up 13%, load factor 60.6%), Scandinavian traffic (75,000, down 17%, load factor 63.4%) and European traffic (34,000, up 11%, load factor 70.4%). The Scandinavian traffic is primarily aimed at feeding SAS’ hubs at Stockholm and Copenhagen, including operating multiple daily flights from Tampere, Turku and Vaasa to Stockholm. The European routes are all served no more than daily with London Stansted being served five times per week.

Helsinki – a graveyard for LCCs?

The history of LCC services to/from Helsinki can best be described as mixed. FlyingFinn a Finnish LCC began operations in March 2003 with a couple of MD83s flying to Kittila, Oulu, Rovaniemi and London Stansted. The airline ceased operating at the end of January 2004.

KLM-owned LCC buzz operating out of London Stansted had previously served Helsinki between March 2000 and April 2002 and carried 100,000 passengers on the route in 2001.

Another failed LCC, Vbird, based at Düsseldorf Weeze (a.k.a. Niederrhein) operated daily services to Helsinki from October 2003 until the airline failed in October 2004. Stockholm-based FlyMe which collapsed earlier this year had served Helsinki from its Stockholm base from March 2004 until the end of last summer.

In October 2005, Copenhagen-based Sterling announced plans to base two aircraft operating 11 routes in Helsinki from the start of the summer 2006 season. In the end just one aircraft was based there briefly operating seven routes (Bologna, Budapest, Chania, Edinburgh, Faro, Prague and Rome CIA) and on 23 May 2006 the airline announced it was axing the base from 13 August after less than five months of operations!

As of now the only LCCs serving Helsinki are Air Berlin operating almost daily from Berlin Tegel and Düsseldorf, Germanwings operating almost daily to Cologne/Bonn and Click Air which started four times weekly services from Barcelona in May.

Image: Tampere
Thanks to Ryanair, Tampere is now the second busiest airport for international services.

Ryanair at Tampere

While easyJet has no presence in the Finnish market (nor in the Swedish or Norwegian markets for that matter), Ryanair has established operations at Tampere airport, which is a mere 2 hour 15 minute bus ride from Helsinki. The first service to Stockholm Skavsta started on 4 April 2003 and since then services have been added to:

London Stansted 30 October 2003 7 per week
Frankfurt Hahn 15 January 2004 7 per week
Riga 31 October 2004 7 per week
Liverpool 03 October 2006 4 per week
Dublin 20 December 2006 4 per week
Bremen 01 April 2007 4 per week
Milan Bergamo 12 December 2007 4 per week

The Stockholm service lasted less than a year before being dropped in January 2004 and the Liverpool route expired on 6 May this year. However, a new service from Ryanair’s base in Milan Bergamo opens this winter. With a scheduled flight time of 190 minutes it will be one of the longest sectors on Ryanair’s network.

Other Finnish airports

Helsinki airport alone accounts for nearly 75% of all Finish airport traffic. According to data from Finavia, the Finnish civil aviation administration, in 2006 the top five airports in Finland were:

Table: Top 5 airports
Source: Finavia

Thanks to Ryanair, Tampere is now the second busiest airport for international services though Oulu remains a clear leader for domestic traffic. Unlike in other countries around Europe where the largest airports have seen their total market share decline as regional airports grow more quickly, the opposite is true in Finland. Helsinki has actually increased its market share of all Finnish airport traffic from 72.1% in 1998 to a record 74.3% in 2006.


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