Competitiveness of air navigation services is hugely significant for recovery of Finland’s air traffic
Published on 21.5.2021
The overall financial losses during the coronavirus pandemic in air navigation services provided by Fintraffic have exceeded EUR 20 million. The collapse in the volume of air traffic has hit the demand for air navigation services hard. Despite extensive adaptation measures, air navigation services continue to run at a loss of about EUR 1.5 million per month.
Air traffic practically came to a standstill in March 2020. Since then, we have seen a very slow recovery. In Finland, the numbers of takeoffs, landings and overflights are currently down about 75% from pre-pandemic levels. Traffic is expected to begin to recover as vaccination coverage progresses.
With the sharp drop in demand, we have economised in air navigation services for instance by laying off personnel, adjusting development projects and cutting administrative costs. In 2020, the costs of providing air navigation services were about EUR 7.6 million less than in 2019. However, it is not possible to adapt services entirely in line with the drop in turnover, because air navigation services must continue to be provided for instance to safeguard the cargo flights that are vital for Finland’s security of supply.
“Air traffic was hit with the worst crisis in its history, with global and far-reaching impacts. In order to lay the foundation for the future success of Finland’s air traffic and to retain as many jobs as possible in this industry, we must continue to ensure that our air navigation services are at the top of the field in Europe in respect of safety, quality and efficiency. Because of this, we have continued to pursue methodical development efforts even in these extraordinary circumstances. Our aim is to ensure that air traffic in Finland will continue to have access to air navigation services that are among the best in the world, once the pandemic is over. Yet we must also prepare for a scenario in which the demand for air transport returns to its previous levels more slowly than we are now anticipating,” says Raine Luojus, CEO of Fintraffic Air Navigation Services Ltd.
Air navigation service charges invoiced from airlines and airports are determined on the basis of European regulations. These regulations require air navigation services providers to reduce their costs each year in accordance with a plan confirmed by the authorities. Globally, air navigation services account for 5% to 10% of airlines’ costs.
Further development of air navigation services is ongoing
In recent years, Finland has had the best international connections in northern Europe. Once the pandemic is over, all operators in this industry must explore ways of improving competence in the Finnish aviation industry and of improving the quality and efficiency of their services. A report published by the Ministry of Economic Affairs and Employment in March outlines proposed measures to achieve sustainable growth in the aviation industry. These measures include expediting the introduction of Multi Remote Operating Tower (MROT) concepts, engaging in closer cooperation with other air navigation service providers and making the services provided by the central government to aviation cost-effective, which would reduce the cost base for route charges. Fintraffic air navigation services are already well under way to implementing several of the above proposed measures.
We are engaging in preparation of a remote air traffic control project with Finavia. If implemented, this would allow air navigation services to be provided flexibly and at a high level of quality as and when there is demand for them. This approach would enhance the accessibility of Finland as a whole and of her various regions. Fintraffic and Finavia published this project on 3 March 2021 (https://www.fintraffic.fi/en/news/fintraffic-and-finavia-prepare-launch-joint-remote-air-traffic-control-project).
The FINEST project, to be delivered in cooperation with Estonian Air Navigation Services (EANS), would provide safe, dynamic and cost-effective air navigation services for airspace users. Operating air traffic in a single airspace without national borders enables airlines to make more efficient – and therefore more environmentally friendly – route choices.
“The purpose of the FINEST project is to ensure a safe airspace and to offer more competitive route charges to airspace users. Another aim is to enhance airspace use by designing and delivering airspace structures that facilitate the minimising of fuel consumption and thus of CO2 emissions. Thanks to collaboration, we are excellently placed to work with EANS to build a new airspace and traffic control model, which has been used by the European Commission as an example of air traffic control systems of the future. Despite the pandemic, we are looking at a rollout in 2022,” says Raine Luojus.
Fintraffic development projects offer employees a chance to improve their work performance and their professional competence. Neither of the above air navigation services projects would lead to reductions in personnel. The cost-cutting measures that have been taken vis-à-vis personnel were due to a reduction in work available, which in turn was a result of the collapse in the volume of air traffic due to the pandemic.
This week, a three-year collective agreement was signed with the Finnish Air Traffic Controllers’ Association.
“I am extremely pleased that air traffic controllers are acting responsibly amidst this greatest crisis in the history of aviation. The new agreement period lends predictability and allows long-term efforts to reverse the negative trend in company finances and to foster recovery across the entire industry. I believe that this solution will augment the competitiveness of Fintraffic Air Navigation Services in aiming for the EU performance goals and will also boost employment for air traffic controllers in the future,” says Raine Luojus, CEO of Fintraffic Air Navigation Services.
The report on the rebuilding of sustainable growth in the aviation industry by investigator Kari Savolainen is available (recommendations for action in respect of air navigation services, see p. 29): https://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/162959/TEM_2021_19.pdf?sequence=4&isAllowed=y