What goes on behind the scenes before a new airline route is launched, for instance, between Helsinki and Doha, Qatar or Ivalo and Frankfurt?
Timo Järvelä, Head of Finavia’s Route Development team, talked us through the ins and outs of how flight routes are planned.
Who makes the ultimate decisions on what routes are launched?
“The decision is the airlines’. Simply put, they launch new routes, if they foresee that there will be enough passengers willing to pay a sufficient price for the flights,” says Järvelä.
“Airlines’ route development units usually have a list of potential new routes that they think will bring in the best profit. Our job is to get routes to and through Finnish airports on that list, and rising to the top,” Järvelä explains.
How do airlines decide on which new routes are actually launched?
“In principle, business decisions are based on a fairly simple formula: Multiply the predicted amount of passengers with the predicted prices, and deduct the costs of running the route. However, predicting those numbers can be a bit more complicated,” explains Järvelä.
Airlines and airport operators such as Finavia analyze the cost-effectiveness of potential routes based on large sets of data about current flight and travel trends. The data is gathered by the companies themselves, but also purchased from global booking companies and databases.
“Based on the analytics, we can see, for instance, how many people fly from Gothenburg to Shanghai monthly, regardless of the stopover airport. That allows us to assess whether there might be enough demand for a new route via Helsinki Airport.”
How do airport operators influence route planning?
Airport operators meet up with airlines and present their estimations of the demand of new routes. The process from the first meeting to the actual launch can take several years.
“Our business cases are always based on analytics and data. We try to show the airlines why flying to a Finnish airport is good for business. We also make suggestions for what type of carrier and flight schedule they might use,” says Järvelä.
“It’s important to us that our cases are solid, and that our airline customers’ routes are profitable. We also only promote new launches when we see that they can bring in extra growth; we don’t want new routes to be detrimental to the business of our current customers.”
As part of new route launches Finavia may also do co-marketing with the airline to drum up demand.
“For example, we’ve supported the marketing of tourism to Finnish Lapland from Germany in cooperation with airlines and Lapland’s tourism operators.”
How successful has route development been for Finnish airports?
Finnish airports are well connected to the world. Helsinki Airport, in particular, has seen the number of connecting flights grow by over 75 % in the past decade, and now has the fifth most direct connections to Asia from all European airports.
One of the major successes last year was the launch of Qatar Airways’ direct flight from Helsinki to Doha.
“That took several years of communication and numerous meetings with Qatar Airways to come about. In the end, the route launch is in line with many of our suggestions: They started with a daily flight and narrow-body aircraft, and are expanding to a wide-body Boeing 787 next fall,” Järvelä says.
One of the major successes last year was the launch of Qatar Airways’ direct flight from Helsinki to Doha.
Another success story is the growing number of routes to Lapland airports.
“The fact that Lufthansa began flying to Finnish Lapland in 2015 made a huge difference in terms of the region’s overall visibility and the development of airline routes. There was a lot of work that went into that, from us at Finavia but also from Visit Finland and different travel operators in Lapland,” Järvelä concludes.
Read more about the route connections from Helsinki Airport.
