Helsinki: Success in capturing the Chinese passenger and their purse
18th January 2017
As Helsinki Airport annouces passenger growth of +4.6% in 2016, and a growth of +7.5% in Chinese passengers, CiR provide a detailed view of the airport's key passenger profile.
The growing demand for air travel from China to Europe is evident through the large number of new direct routes seen over the last decade.It continues to grow as the size and wealth of the middle-class in China increases, and the concept of holidaying abroad every year is viewed increasingly as an expectation, rather than a luxury reserved only for the privileged.
For a number of years now Finnavia has positioned Helsinki-Vantaa T2 as the No.1 transit hub for Chinese passengers travelling to other European destinations. The airport is best placed geographically to serve the needs of Chinese tourists, boasting the shortest flight times to many major Chinese cities. The number of Chinese route options continues to grow year on year, with Finnair’s most recent service to Guangzhou having been launched in May 2016.
Helsinki currently serves 6 airport destinations in Greater China with direct scheduled flights, more than any other Scandinavian airport, and passengers travelling on scheduled flights from Helsinki to the PRC account for 5% of all international passengers, with Mainland China the 8th most popular destination country.
Over the years, the airport’s operator has implemented several facilitative measures in order to offer unique and welcoming experiences for Asian passengers, with a particular focus on the high-spending Chinese.
The most recent of these was the rolling out of the Chinese mobile payment app AliPay across some (not all) of the airport’s retailers, as reported last week. Helsinki is among the first European airports to offer this service, joining Munich and Frankfurt. This news comes almost simultaneously with the announcement that the airport will tender retail space for T2’s new West Wing this year, with the intentions of directly approaching retailers which appeal to Asian passengers.
Finnair, the sole operator of flights between Helsinki and Greater China has a Chinese-language website and Chinese-speaking crew, while the airport has launched Chinese social media accounts, and has incorporated Chinese signage in order to drive more sales.
Chinese signage at Helsinki-Vantaa Terminal 2 Gates Store, May-2016 Source: CiR Business Lounge
In Spring 2016, Finland opened 13 new visa application centres in key Chinese cities, as well as its existing centres in Beijing and Shanghai. Around the same time, Visit Finland also promoted the StopOver Finland programme, which encouraged the “money rich, time poor” Asian passengers to add a short stopover of up to 5 nights in Helsinki at no added cost to their original airfare.
Furthermore, Finland and the Nordic region as a whole is gaining status, particularly among millennials, as a new, unknown region with lots of opportunities for new experiences. The Northern Lights are a particular draw to tourists, one of Nature’s great displays, and an opportunity for experience-driven tourists to be tagged at a genuine bucket-list location. Winter sports such as skiing and snowboarding, are becoming increasingly popular in China with the upcoming 2022 Beijing Winter Olympic Games. All aforementioned promotions, activities and measures, as well as new routes, have contributed to the huge surge in Chinese passengers travelling to, and through, Helsinki-Vantaa, particularly in 2016.
As well as serving the Chinese, Helsinki is also an established hub for Japanese tourists, who feature in the Top 5 Nationalities departing the airport on scheduled international flights. In terms of routes to Japan, Helsinki now boasts direct flights to four Japanese airports, the most of any airport in Europe.
The number of Chinese nationals travelling to Finland has grown consistently since 2014, with a particular acceleration experienced in the Summer months of 2016. From the months of May-August departing passengers rose +43.3%, and despite growth levels slowing into the back end of Q3/Q4, they have nonetheless grown a huge +32.5% year-to-date October 2016. The main driver behind the significant growth rate throughout Summer was the launching of the Guangzhou service, which ran from May through to October and added an additional 30,000+ scheduled seats from China to Helsinki during these months.
As a result of this strong double-digit growth, passengers from the People’s Republic of China are now the tenth largest nationality departing Helsinki on scheduled international flights, with a growth rate second only to the Americans.
Seat capacity indicators for scheduled routes in the first half of 2017 suggest that the largest growth will come from the fledgling route, Guangzhou. The number of seats on the seasonal route are up +18.4% on the same period last year. Hong Kong will see the second highest increase in scheduled seats, with Finnair increasing the frequency of the route from daily flights to 10 times weekly.
Capacity decreases on the Chongqing route may seem alarming at first, but this decline is due to Finnair being affected by a pilot shortage. The airline has been forced to suspend the service between January-May 2017, hence the large decline in capacity. If we disregard the route on this basis, total capacity on the remaining 5 scheduled routes is up +5.8% for the first half of 2017 – a significant slowdown compared with the rate seen in the same period in 2016 (+22.9% vs 2015), but growth nonetheless.
In a further boost to operations, it was revealed last month that Jinan Airport is currently in talks with Finnair regarding the opening of a Jinan-Helsinki service, which would be Helsinki’s 7th gateway in Greater China, and would greatly contribute towards Finnair’s goal of doubling revenue on Asian traffic by 2020.
Overall, capacity on routes from China to Helsinki are down -0.7% for the first six months of 2017, however this is heavily distorted by the aforementioned pilot shortage. Overall, the outlook for Chinese passenger travel to Helsinki looks bright, with large increased on routes from Hong Kong and Guangzhou, supported by moderate growths in the two most mature markets, Beijing and Shanghai Pudong.
The number of PRC passengers departing Helsinki are forecast to grow +57% by 2025 vs 2015, far outstripping the growth rate of all other nationalities at the airport (+40%). The main source of growth is Mainland Chinese passengers, growing +70%, driven by the increased number of international routes departing China, their growing wealth and propensity to fly, and desire to travel further afield.
Although it could be argued that tourists would be naturally drawn to the area on account of its beautiful sights, and rich and diverse offering of experiences and activities, Helsinki Airport, Finnair and Visit Finland combined have sped up and exaggerated the process by successfully implementing a number of facilitative measures in order in order to make it easier for Chinese tourists to travel to, and spend money in, Finland.
 https://www.trbusiness.com/regional-news/nordic/helsinki-airport-to-tender-retail-space-in-2017/113897  Nationality is based on residency through place of ticket purchase  https://centreforaviation.com/news/finnair---606062  https://centreforaviation.com/news/finnair-in-talks-to-open-jinan-service-airport-set-to-expand-to-two-terminals-and-four-runways-629710  https://centreforaviation.com/news/iata-agm-2013-finnair-to-look-at-more-chinese-secondary-cities-as-part-of-continued-asian-focus-236004 PAX Source: CiR Business Lounge | Advanced Analytics Tool - Data based on Scheduled departing international passengers only. Data displayed for nationalities is based on residency through place of ticket purchase