Innovation Holds the Key to Profit

Business models bring efficiency to the Scandinavian market, reports Graham Newton.

FinnHandling AB was started when a competitor dropped out of the Arlanda market. It was simply too good a business opportunity to pass up and it perfectly suited Northport’s growth strategy.

However, the management team was very aware that a completely new business model was needed to better answer airline needs for quality and cost-efficiency. “It especially helps to minimize fixed costs given today’s high risk of rapid and drastic volume changes,” Vauraste says.

The Stockholm operation is mainly centered on Terminal 2 but clients can be serviced throughout the airport if required. Facilities are tailored for the business and such has been the success that FinnHandling AB recently received British Airways’ “Self-Service Station of the Year” award.

Heading North

Northport’s endeavors at Stockholm are loosely repeated in Finland’s provincial airports. The company’s work at these small community gateways usually involves between two and 20 flights per day at each location. “The cost-effectiveness varies according to each airport,” says Vauraste, “but success depends on multiple skills training, new modelling like staff renting, new use of technology and new products.”

In the provinces, Northport also outsources to local entrepreneurs, believing them best suited to exploit local knowledge and bring in additional revenues from gaps in the market. Additionally, it affords Northport the luxury of being able to dilute its fixed costs.

Of course, generating revenue, whatever the business model, is far from easy in the extreme conditions of the Scandinavian north. Weather worsens the further north one travels but Northport has developed particular expertise in ground support in cold, harsh surroundings—even by Scandinavian standards.

“We can handle ice, snow, wind or cold—and all the possible combinations,” Vauraste proudly claims.

“Our experience has been building for some time and the best proof we have is the station punctuality of our customers. Finnair has been in the European top three for on-time performance year after year and Helsinki-Vantaa is among the most punctual airports in Europe. All of this is done in northern conditions.”

Looking forward, Northport is pursuing opportunities in Scandinavia, Northern Europe and the Baltic Region. While critical mass is always necessary for a sound business case, the company ability to provide extremely flexible business models and solid relationships ensures it has more open doors than most.

“The market today is highly price-driven,” concludes Vauraste. “The customer’s focus is on their cost—but we consider this to be an opportunity for us. Of course, there are always certain issues for a handling agent and greater understanding of the market is needed from the authorities and the trade unions. However, with further flexibility we will have an even better understanding of our customer requirements.”

It seems the Scandinavian market is cold only to those without the flexibility and ideas to heat things up. Traditional models may be breaking down but that simply creates opportunity for fast-moving enterprises. Short summers and short pockets pose little problem for Northport.

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