Regional economy
The Finnish regional flight network is heavily subsidised by the state (in the amount of 40 million EUR during 2021-2023); the same also applies to the Helsinki-Kajaani connection and Kajaani Airport. In 2023, the Parliament decided to continue supporting the regional routes by providing an additional 17 million EUR until at least April 2024. Without the national subsidies, Finnair would not continue operating those routes. The route to Kajaani is the busiest of the five subsidised regional routes, even though the airplanes have a 52% passenger/capacity rate. Currently the state is hoping that regional actors will themselves find ways to make these routes financially viable. Under the previous government, the main emphasis was on reforming the railway network instead of investing in air traffic to align with national climate goals. (Holopainen, 2023; Tolpo, 2023).
The regional council of Northern Ostrobothnia conducted a study on the impact of aviation on the regional economy, with particular emphasis on the cities of Oulu, Kajaani and Kuusamo. The report states that the impact of aviation is much larger in the case of regional airports (meaning all airports other than that of Helsinki) and the more remote an area is, the greater the importance of having an airport. Indirect impacts are three times larger than the direct impacts on the regional economy. The report details that 51% (26 billion EUR) of revenue and 11,000 jobs in the impact area of the airports in Oulu, Kajaani and Kuusamo are dependent on aviation, with 59% of that business being international sales. A total of 49% of regional businesses considered on-site meetings with clients and stakeholders to be necessary, while 32% saw them as important. Furthermore, the report found that one in three companies in the region had made significant investments that rely on regular flight connections. (Council of Oulu Region et al., 2023).
The survey estimated that better connections would help 50% of companies to increase their revenue in Oulu, 48% of companies in Kajaani and 49% in Kuusamo. Of industries that would benefit the most, 97% of companies in tourism could increase their revenues, 78% of companies in the fields of entertainment and art, 70% of IT companies and 54% of companies in heavy industries and mining. (Council of Oulu Region et al., 2023).
In all three case study locations – Oulu, Kajaani (especially near Kajaani in Paltamo) and Kuusamo – there are large pulp, board or paper mills or sawmills and related transport flows. In addition, there are several bio-industry projects that are under development or have already been completed in the wider region. (Liikennevirasto, 2017).
The main economic strengths of the Oulu region are electronic industries and education (Pohjois-Pohjanmaan ELY-keskus, 2019). In a scenario developed by the Finnish Transport Infrastructure Agency, it was estimated that an increase in air traffic in the Oulu region in the future could be prompted by a) multinational enterprises establishing knowledge centres in the Oulu region, b) increased work travel by researchers due to a rise in research and development activity c) the further development of a common Nordic employment market and d) new tourism approaches making the Oulu region a more attractive destination. It is also estimated that air traffic via Oulu to Lapland will increase in the coming decades. (Herneoja et al., 2019).
As far as Kainuu is concerned, the CEO of the Association of Entrepreneurs of Kainuu commented that regular flight connections are of great importance to regional entrepreneurs. That includes local microenterprises and medium-sized companies, the mining industry, tourism and the forestry industry, which all trade internationally. (Kinnunen, 2022). In the regional plan for developing the transport systems, the region estimates that the regional economy will benefit in the future from the global growth in tourism and the development of the bioindustry, technological and mining industries. The region’s strong points in terms of transport system investments are the existing infrastructure and topical knowledge about the important economic actors. Weaknesses hampering development of the current transport structure are long distances, sparse population and thin personal transport flows. Those weaknesses mean that there are considerable challenges in terms of maintaining the road network and organising public transport. The region has estimated that all possible future driving forces would require reliable flight connections to enable efficient work travel or visits by stakeholders, for example. (Kainuun liitto, 2018).
Kuusamo is the third largest travel destination in Finland owing to its status as a ski holiday destination. The number of overnight stays has increased more strongly than the national average and the travel industry of Kuusamo has set itself the goal of 185,000 air passengers by 2026. However, travel entrepreneurs have expressed concerns regarding Kuusamo Airport and the frequency of flight connections, given that they are necessary for tourism in the area. There is also a new bio-park focused on circular economy activities in Kuusamo (Karjalainen, 2022; Karjalainen & Ukkonen, 2022; Kuusamon kaupunki, 2023; Loukkola, 2023).
Regional policies and initiatives relevant to electric aviation
The transport and logistics strategy for northern Finland of 2017 states that problems with accessibility should be managed by prioritising the transport needs of business, industry and tourism actors, as well as the Ostrobothnian coast. In the future, long-distance journeys, economic activities, industries and international cooperation are expected to focus to an increasing extent on certain “development corridors”. Of the case study locations, Oulu and Kajaani are situated along those development corridors, while Kuusamo is at the heart of tourism activities. New political solutions are needed to ensure public transport in the very sparsely populated regions of northern Finland. (Liikennevirasto, 2017).
In the Northern Agenda, which was drafted by a group of stakeholders in northern Finland (regional councils, cities, universities, chambers of commerce and entrepreneurial associations), it is recommended that the new government emphasises transport connections to create a more unified Northern area, with Oulu as a key growing transport node.
Transport infrastructure
The airport network of northern Finland is relatively extensive and is of great importance for the regional economy and industries. Of the three case study locations, Kajaani Airport and Kuusamo Airport are especially important for tourism and Oulu Airport for business. (Liikennevirasto, 2017).
Oulu Airport is Finland's second busiest airport with over 630,000 passengers. (Degerman, 2023b). The airport is used to a far lesser extent for cargo traffic as most cargo is carried by road. However, the cargo carried by air is relatively valuable. (Pohjois-Pohjanmaan ELY-keskus, 2019). The 2019 national evaluation of significant transport nodes listed Oulu among important nodes for personal transport, noting that air traffic is of greater importance than rail and road traffic in this context. The importance of Oulu Airport is heightened by the fact that the distance to Helsinki is over three hours by rail or road. The Finnish Transport Infrastructure Agency (Väylävirasto) also stated that transport connections (especially between the city and the airport) and services around Oulu Airport should be improved overall given its status as an important node (Herneoja et al., 2019).
Kajaani Airport is located ten kilometres from the city centre and is managed by the state company Finavia. Kuusamo Airport is located 80 kilometres northwards. The distance between Oulu and Kajaani is 183 kilometres. Currently there are two to four flights a day between Kajaani and Helsinki and roughly 80,000 flights per year, 75% of which are to Helsinki and almost all the rest to destinations abroad. In other words, less than 1% of passengers fly to other Finnish cities from Kajaani (via Helsinki). The reasons for flying are evenly distributed among tourism, business travel and travel for other purposes. Air cargo has been on the decrease during the past decade (Kainuun hyvinvointialue, 2023; Kainuun liitto, 2018).
As far as rail travel is concerned, the connection between the cargo station Kontiomäki near Kajaani and Oulu is among the country’s busiest routes for cargo traffic, with traffic having been on the rise during the past years. Most journeys around Kajaani are made by personal car (82% of journeys, compared to the national average of 72%) and the average daily distance travelled is somewhat longer than the national average at 52 kilometres. In 2011, it was estimated that traffic is Kainuu’s largest source of emissions with a share of 39%, most of which is from road traffic. Besides digitalisation, a decrease in private car journeys and support for railway traffic instead were the main aims with respect to reducing emissions (Kainuun liitto, 2018).
Passenger numbers to Kuusamo Airport have been on the increase and reached a record high in 2022 at over 110,000 passengers, representing a 57% increase compared to the previous year. Two-thirds of passengers to Kuusamo Airport are international, so a large share of flight connections consists of charter flights. (Karjalainen, 2022; Loukkola, 2023). The transport infrastructure of the selected Finnish regions is illustrated in Figure 3.