Finnish Business and General Aviation Survival Strategies By

Finnish Business and General Aviation Survival Strategies By: Heikki Kunttu, ALMT Oy Estonian Aviation Academy 20 th Anniversary Aviation Seminar 12. -13. 11. 2015, Tartu, Estonia 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 1

Airline Management Technologies ALMT Oy Who we are? We provide services in a wide range in the field of aviation § Continuing Airworthiness Management, EASA Part M § Aircraft maintenance, EASA Part 145 & Part M Subpart F § Modification designs (DOA by BAM) § Ground Handling for Business Aviation § Training for Aviation Professionals § Consulting § Flight Operations under AOC Technical services are provided under trade name FLAPLAND Been in the business for over 20 years and seen the ups and downs in the Finnish aviation environment. Also we’ve got good share of difficulties and problems during the years. 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 2

Main problems in the Finnish General Aviation The obvious signs of problems 80000 4500 70000 4000 60000 PPL 3500 50000 CPL UPL 3000 40000 30000 2500 20000 Aircraft private Ultra light Aircraft OPS 10000 2000 968 973 817 808 1290 1337 1351 1377 1373 TOTAL: 64790 72071 70362 67801 64575 64692 61855 51023 43573 51075 TOTAL: 4035 4108 4194 4335 4440 4176 4373 4458 4075 4011 12. 11. 2015 2010 2014 2012 923 1248 2009 2013 2011 1015 974 1065 1134 1208 2010 933 970 Ultra light pilot 2007 2009 879 12128 12841 12686 12586 13357 13589 13344 13785 13294 11978 2006 2008 Commercial pilot Ultra Light 2005 2007 2005 27290 32756 28584 26084 26172 23679 23576 18626 20245 17789 2014 1830 Aircraft, private 2013 1881 2012 2014 2134 2011 2013 2068 2010 2012 1963 2009 2011 2177 2008 2010 2182 2120 2127 2157 2009 Private pilot 2006 2005 2006 2007 2008 25372 26474 29092 29131 25046 27424 24935 18612 10034 21308 2005 Aircraft, OPS GENERAL AVIATION FLIGHT HOURS 2005 - 2014 2006 1500 0 NUMBER OF PILOT LICENSES 2005 - 2014 2011 2012 2013 2014 ALMT Oy - EAVA Aviation Seminar 923 3

Main problems in the Finnish General Aviation Why we have these negative trends? 1. All costs are rising § Avgas 100 LL from 1, 5 €/ltr to 3, 5 €/ltr § Airport and navigation fees, Authority fees and Insurances § Maintenance costs – aircraft are getting older and spare parts are more expensive The change in Cessna 152 flight hour charge (flight club): § Year 2005 , ~85 €/h § Year 2015, ~135 €/h 2. The Average of the pilots is getting higher § Prices have gone so high that young people can’t afford and/or don’t have interest § Pilots are getting older and loose their medical certificates & pilot license 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 4

Main problems in the Finnish General Aviation 3. Current political atmosphere does not support the general aviation § Fuel (100 LL) availability § Airport security is very tight – difficult to access the aircraft on certain airports § Finavia is not interested to serve general aviation – only airline operations § Airport closures: § § § Limited technical and theoretical education for aviation § § § 12. 11. 2015 Varkaus, EFVA (closed) Helsinki-Malmi, EFHF (in 2017) Lappeenranta, EFLP (all staff suspended) Pori, EFPO (planned) Kokkola, EFKK (planned) Only few EASA Part-147 schools for piston engines Closing down the university level (M. Sc) aviation education program Only bachelor level education available in Tampere ALMT Oy - EAVA Aviation Seminar 5

How all this affect to us? The decreasing number of flight hours affects to the whole field of aviation. When there are less aircraft and less pilots flying less hours we see that: § Less maintenance work or other services are needed § Harder competition between different companies and organisations § The amount of unprofitable administrative work is not decreasing in a same ratio When the flying itself has become expensive we’ve noticed that: § Customers main interest is to have as low prices as possible regardless of the quality of the service – loyalty does not exist anymore § The profit is very low or no profit at all – all expenses are questioned Lacking education will cause that: § The high end piston engine knowledge will disappear when the current experts retire § There will be no new Aeronautic Engineers in the future – Where to get properly educated personnel to the Technical Offices? 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 6

How is it in the Business Aviation? The Finnish mentality towards business aviation has always been quite difficult and the current economical recession doesn’t give any help. Companies choose airline flights rather than chartered jet – not to mention to have a own business jet. There’s never been a real domestic market for business aviation in Finland, but Russia has provided a good market and lots of opportunities. We’ve been able to market “European safety and quality” for Russian business aviation. Because of the changes in Russian market the Finnish business aviation is currently suffering and no easy solutions are in the vicinity. To run business flight operations in Finland, the financing needs to come abroad. In business aircraft maintenance the local organisation can’t pay the establishment costs. The maintenance service needs to be attached to some bigger entity like hangar and ground handling services. The few positive issues: § SE-IMC operations with turboprops § Privatised airports New operators with new concepts are coming into market: Go Aviation Oy – ALMT Oy 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 7

How to fight against? To survive in this current environment we need to create new ideas and approach methods to the business in general. Continuing cost reductions will not work forever. The key elements could be: § Sell solutions instead of services § Customer experience – something that keeps up the loyalty (ie. car service) § Creation of service packages such as turn key flight operations etc. § Expanding the scope of service even outside the traditional aviation § Flexibility – services available when needed § Enhanced marketing , especially towards young people § Cooperation § Follow up of the new trends and technologies – quick actions when needed § § § Light Aircraft Pilot License (LAPL) Lighter Part-M regulations Unmanned Aircraft Systems Money can’t be a problem – the problem is only how to attract the money into aviation! … see the sailboats and yachts in the Finnish coast line harbours. 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 8

What we have done? We have summarised our survival strategy to our motto: We do the things that the others don’t! The key functions that we have found important in our survival are: § Flexibility within the company – No boundaries between the organisations § Flexibility in working hours/times, travelling § Expanding the scope of technical services § § § Completely new services § § § Ultra-light aircraft Rare aircraft types (P. 68 Partenavia, Xtremeair, Stemme) Aircraft sales EASA Part-21 Subpart J Design Organisation (in cooperation with BAM) AOC operations (If the customers won’t fly – we will). § § 12. 11. 2015 Summer 2016 in Lahti and Savonlinna? Line- and taxi flight operations are in our plans also ALMT Oy - EAVA Aviation Seminar 9

What we have done? § High end contacts to Finavia Oy and to different Airports and Cities § § Being a part of future technologies § § Only way to really have an influence on any major issue is to get directly on top UAS operations and maintenance Cooperation § § MT-Propeller Gmb. H Bromma Air Maintenance Ab Scandinavian Avionics A/S Mikkeli airport With the above actions we can survive, but they don’t give much support for growth. To grow up financially and physically the only way is to get involved with airline operations as the general aviation just don’t have enough volume for that. Even though we are already doing a lot, we are always open for new proposals and ready to discuss about new possibilities… … DO YOU HAVE ANY? 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 10

THANK YOU! 12. 11. 2015 ALMT Oy - EAVA Aviation Seminar 11