Executive Summary
The Finnish aviation market is suffering significant impacts from the market disruptions of 2020 and related decreases in air travel. The full extent of the impacts is unknown at the time of this writing. The following report covers the Finnish aviation market for the time period up to, but not yet including, 2020 and the economic implications as a result of these disruptions.
The Finnish aviation market has been booming for the last few years due to increased domestic and international air traffic. The year 2019 was exceptionally busy, with Finland’s airports serving close to 26 million passengers. Total air traffic related activities, including airlines and their supply chains, employ more than 100,000 people and are estimated to account for 3.2 percent of Finland’s GDP.
Market Entry
Finavia is a state-owned commercial enterprise that manages the Finnish national airport network and maintains the Finnish air navigation system. Finavia’s airport network consists of 21 airports. The volume of air traffic by number of air transport passengers has been increasing steadily for many years now. In 2019, the total number of passengers reported by Finavia was over 26 million. Finland’s largest international airport, Helsinki-Vantaa, welcomed 21 million (81 percent) of those passengers, with a record-breaking 74,000 on a single day in June. The number of passengers at Helsinki-Vantaa connecting from an international flight to another international flight increased by 16.7 percent, representing 38.6 percent of all passengers at Helsinki-Vantaa in 2019. most on routes from Japan, Germany, China and Sweden.
The number of civil aviation operators in the market is fairly small. Finnair is Finland’s flagship air-carrier since 1923 and one of the world’s longest continuously operating airlines. Other airlines operating in the Finnish market include Nordic Regional Airlines (NORRA), Scandinavian Airlines, Norwegian, Air Baltic and Lufthansa. Additional operators include air taxi and business jet service providers. Finnair Technical Service, the airline’s maintenance department and GA Telesis Engine Services (GATES), a full-service engine overhaul and repair station based in Helsinki International Airport, are the largest buyers of aircraft parts when it comes to commercial aircraft and component repair and overhaul. GATES is a fully integrated subsidiary of U.S. based GA Telesis. Finland’s import climate is open and receptive to U.S. products. The major buyers in the market usually prefer to operate directly with aircraft, part, and equipment manufacturers—personal contacts are important and highly appreciated. The Finnish climate sets demanding requirements for both civilian and defense technologies. Everything must function and be reliable in an arctic environment, as well as in summer’s heat and autumn rainfalls.
Current Market Trends and Demand
Finnish aviation operators have been facing operational challenges in a fiercely competitive business environment. However, Finnish aviation companies continue to be forerunners and innovators in offering environmentally friendly solutions for the aviation industry. For example, jet engine cleaning solutions for cleaner engine components, faster cleaning processes, and reduced failure rates.
Carbon neutrality is a current top priority for the civil aviation industry. The aeronautics industry plays a key role in reducing the environmental impact of civil aviation through innovation, particularly in lessening noise levels and decreasing fuel exhaust emissions. Joint technology initiatives funded by the EU, such as Clean Sky and SESAR, are crucial in this respect and help to ensure that each new generation of aircraft reduces emissions by 15-20 percent. The implementation of the first ever sectorial carbon offsetting scheme (CORSIA) will also be instrumental in decarbonizing aviation, especially in view of its growth forecast.
At Finnish airports, responsibility towards the environment and sustainability is reflected in Finavia’s climate program which consists of a range of different actions. Its essential parts include increase in the use of renewable forms of energy, the origin of power and heat, and the improvement of energy efficiency in all activities.
Another trend in aerospace is electric aviation and drones. The development of unmanned, electric aircraft is revolutionizing the aviation and defense sectors. Electric aircraft are expected to play a role in how the air transport sector responds to addressing climate change. For example, an electric aircraft running by wind or solar power could run completely emission-free. Finavia is involved in the development of electric flying in Finland. It is anticipated that the first full e-passenger plane will fly on domestic routes in Finland by 2030 at the earliest.
Opportunities
Aircraft Parts
According to the Trade Policy Information System (TPIS) the $97 million export value of U.S. aircraft, spacecraft and parts, HS88 to Finland in 2018 represents almost a 40 percent increase from the previous year ($69 million in 2017), and ranks Finland at #74/209 as an export destination.
Defense Products
The Finnish Defense Forces annual budget represents one percent of Finland’s GDP. In 2018, total defense materiel procurement totaled $611 million, just over 21 percent of the total defense expenditure. The Finnish Defense Forces is preparing large procurements for the upcoming years, which include fighter planes for the Air Force (HX Fighter Program), multi-purpose ships for the Navy, and artillery for the Ground Forces. Cooperative ventures and partnerships with the Finnish defense industry, including Patria Group and Insta Group which both have a strategic partnership with the Finnish Defense Forces Logistics Command, are highly recommend for market entry.
UAV/Drones
Different industries have shown interest and adopted novel commercial drone solutions for efficient asset, logistics and security management. Land and sea drone markets are rather untapped, but smaller in size compared to the aerial drone market. There are several on-going R&D programs providing opportunities for cooperation and market entry. Harsh weather conditions with strong gusts and cold temperatures demand a lot from the drones granting premium products to have the best prospects to succeed in the market.
Trade Events
International Paris Airshow 2021
Paris-Le Bourget, June 21-27, 2021
https://www.siae.fr/en/
The Paris Air Show is the largest aerospace-industry exhibition Air Show in the world.
Farnborough International Air Show 2022 (2020 cancelled)
Farnborough, UK, July 17-24, 2022
https://www.farnboroughairshow.com
Farnborough International Air Show is one of the biggest, most internationally attended aerospace events in the world - a globally renowned showcase of aerospace equipment and technology.
Finnish Aeronautical Association’s Annual Airshow (in Kauhava for 2020)
https://www.kauhavaairshow.com/#
Trade Associations
The Finnish Aeronautical Association (FAA)
Finavia
Association of Finnish Defense and Aerospace Industries, AFDA
Contact
Mia Maki
Senior Commercial Specialist
U.S. Embassy Helsinki, Finland
mia.maki@trade.gov
+358 9 6162 5289
