1. Introduction

First of all I would like to express my gratitude to the arrangement committee for the invitation to this conference. I am pleased to be here and discuss some very interesting topics – with a well informed audience. According to the programme there will be many interesting speeches during the three days here at the conference. I hope all the foreign participants will have a pleasant stay in Norway.

Norway is a sparsely populated country. One would therefore think that the challenge of creating airport capacity is not of the same magnitude in Norway, as in other more densely populated countries in Europe. Yet we also have our own challenges in this country. The issue of most current interest is probably the question concerning a new third runway here at Oslo Airport, Gardermoen.

However, I have also been asked by the arrangement committee to give a general overview on aviation in Norway and on Norwegian aviation policy. Firstly in my speech I would therefore like to point at the importance of aviation in Norway, especially domestic aviation. Subsequently I want to explain the organization and financing of the aviation infrastructure in Norway. I will also say a few words about the air services offered in Norway. At the end of the speech I will come back to some questions regarding a new runway at Oslo Airport.

2. The importance of civil aviation in Norway

Aviation plays a more important role in the transport system in Norway than in most other European countries. Domestic aviation is particularly important in Norway. On average, all Norwegians carry out 2.3 domestic flights per year. This is the highest figure in Europe. Second on this ranking list is Iceland, another aviation dependent country, with 2.1 domestic journeys per inhabitant. In comparison the same figure for continental Europe is less than half a trip per year.

The high level of domestic flights in Norway is easily understood by looking at a map. It is clear that Norway is one of the most outstretched countries in Europe. There are considerable distances within the country. In addition, Norway has a challenging topography with fjords and mountains, a harsh climate, and a relatively small population of only 4.7 million inhabitants, spread out all over the country. Travelling by land or sea in Norway is thus both cumbersome and time-consuming. Consequently, air travel is in many cases the only realistic alternative means of transport in Norway.

Throughout the country good access to air transport is important for trade and commerce. In the more remote parts of the country, notably in the western and northern parts, air transport is also commonly used for reaching public services such as education or medical treatment in hospital or by specialists. Thus good access to air transport is important for maintaining employment and settlement, as well as a general level of welfare in all parts of the country.

Located in the periphery of Europe with an export oriented economy, it must also be stressed that international aviation is important for Norway.

3. Aviation infrastructure in Norway

In Norway, Avinor runs and maintains 46 state owned airports spread all over the country. Several of the airports are operated in cooperation with the Norwegian Air Force. Avinor is a limited company fully owned by the Norwegian state. The Ministry of Transport and Communications is responsible for the ownership of Avinor.

In addition to Avinor’s 46 airports, there are presently four airports in Norway with scheduled traffic outside the Avinor system. The most significant of those airports is Sandefjord Airport, Torp, some 100 kilometres southwest of Oslo. Further, in 2004 the government granted concession to civil operations at Rygge military airport some 50 kilometres southeast of Oslo. Scheduled operations at this airport – Moss Airport, Rygge – are due to start at the end of 2007.

In addition to being by far the most important provider of airport services in Norway, it should also be mentioned that Avinor is an integrated company which is also responsible for providing air navigation services in Norway for the civil as well as the military sector.

Of the abovementioned, it follows that Norway today has 50 airports with scheduled traffic. In Europe only France and United Kingdom have more airports than Norway. If we look at the number of airports per inhabitant, Norway is ranked number two in Europe after Iceland.

A specific feature of the Norwegian airport structure is the high number of airports without controlled airspace and with short runways, i.e. runways shorter than 1.200 meters. In general the runways are approximately 800 meters. Instead of air traffic controllers controlling the airspace, the airports are served by an aerodrome flight information service (AFIS), limited to giving information and advice to the pilots.

Of all the 46 airports under Avinor’s responsibility there are 25 such airports. This airport and route network was established in the end of the 1960s and the beginning of the 1970s. The airports are all located in remoter areas in the western and northern parts of Norway. These are parts of the country where the topography in many cases does not allow for airports with normal runway length, and the traffic levels do not sustain services of larger aircrafts. The network thus secures all parts of the country access to air transport in a cost efficient way.

The extended network of airports with short runways found in Norway is probably unique in the world. As an illustration, almost half of the airports in Europe with scheduled traffic on runways shorter than 1.000 meters, are found in Norway.

4. Financing of the aviation infrastructure

The traffic volumes at Avinor’s airports vary considerably. After a rapid growth in the last 3-4 years, Oslo Airport, Gardermoen had almost 18 million passengers in 2006. This now makes it the second largest airport in Scandinavia after Copenhagen Airport, Kastrup. Oslo Airport is dominant in the Norwegian airport system, and stands for almost half of the passengers in the Avinor airport system. This can be explained by the fact that the capital area of central eastern Norway is the most populous part of Norway, and thus generates much traffic on its own. In addition Oslo Airport is the dominant hub for both domestic and international traffic in Norway. At the other end of the scale, we find tiny Berlevåg Airport on the coast to the Barents Sea in the very north of Norway, with less then five thousand passengers in 2006.

The airport activity is characterized by high fixed cost. Most of the airports in Avinor are thus not commercially profitable. Actually, only the four biggest airports generate a financial surplus. Avinor is self financed. Consequently there is a considerably cross subsidization taking place within Avinor. In 2005 the cross subsidization within the company amounted to approximately 100 million Euros.

Being the biggest airport, Oslo Airport plays an important role for Avinor’s ability to finance its large number of small and unprofitable airports. Of particular importance to Oslo Airport are the so called commercial revenues from airport affiliated activities like parking, airport hotels and duty free sale. As a non EU member, Norway can maintain duty free sale for passengers to and from the rest of Europe. Duty free sale on arrival at Oslo Airport was established a couple of years ago and has proved to be successful.

As mentioned before, there is one airport outside Avinor competing with Oslo Airport, Gardermoen and another which is due to take up operations at the end of this year. The positive aspect with these airports is that they offer competition to Avinor and Oslo Airport. Further, the passengers benefit from the services offered from these airports. On the other hand it is clear that the airports outside Avinor may pose a threat to the ability of Oslo Airport to cross subsidize commercial unprofitable airports throughout the country.

5. Scheduled air traffic in Norway

From what I have mentioned earlier today, it follows that there is a relatively large market for domestic aviation in Norway. Thus we find a relatively dense network of air routes throughout the country. Thanks to high traffic volumes, a high proportion of the services are commercially profitable. Actually, three of the twenty most heavily trafficked city pairs in Europe, can be found in Norway, namely the city pairs Oslo-Stavanger, Oslo-Bergen, and Oslo-Trondheim. In a European context these are all relatively small cities, with 100 thousand to 500 thousand inhabitants, again illustrating the high dependence on air transport in Norway.

In the remoter parts of the country commercial services are not always commercially sustainable. In those cases where the Government has assessed that a service is needed, the Norwegian Government, by the Ministry of Transport and Communications, purchases air routes from air carriers. In accordance with EU law in this field –which Norway is a part of through the European Economic Area agreement – the services are put out to tender for three years at a time. 30 airports throughout the country are served with service purchased from the Government. This number includes 24 of the 25 airports with short runways. My ministry spends almost 60 million Euros a year on purchasing non commercial air services. The government thinks it is important to maintain good air transport services throughout the whole country.

6. Third runway at Oslo Airport, Gardermoen

As mentioned the air traffic has grown rapidly in the last 3-4 years, and Oslo Airport had almost 18 million passengers in 2006. This brings up the question of building an additional terminal at the airport.

A more controversial issue is the question concerning a third runway at Oslo Airport, Gardermoen. Oslo Airport has two runways today. Though the number of aircraft movements has not increased at the same pace as the number of passengers the last years, a report from Avinor concludes that there will be a need for a third runway at Oslo Airport, most probably towards 2030. A study carried out by an independent consultant assigned by the Ministry of Transport and Communications, has confirmed the main findings in the report from Avinor.

The consultant report was on public hearing last summer. For the time being I am evaluating the statements I received in the hearing. As a part of this process the need for additional information will be assessed.

In a European context the area around Oslo Airport is relatively sparsely populated. Nevertheless, the question of establishing an third runway raises several comprehensive and complicated questions. These questions are related to land use, regional development, noise and other environmental concerns.

As the question of land use is concerned, holding land for a third runway close to the airport will represent an obstacle for future business development around the airport. Furthermore, establishing new runways may create new challenges related to aircraft noise. A more fundamental question is to what extent a further increase in air traffic is desirable from an environmental point of view.

On the other hand, my presentation has shown how important aviation is to Norway, and how important Oslo Airport is for our aviation system. From this it follows that restrictions on the development of Oslo Airport can hamper the regional development in other parts of Norway.

As an alternative to a third runway at Oslo Airport, a development of the two existing airports around Oslo, Sandefjord and Moss, has been suggested. If this should be a realistic solution, a fast and efficient transfer between the three airports will be requested. I would also like to point out that the Norwegian Government is considering a possible construction of high speed trains, in the most densely populated areas of the country. Should this turn out to be a realistic solution, the future need for air transport could be reduced. This might make a third runway at Oslo Airport redundant.

As stated above, at the time being I am not in a position to present my conclusions regarding a third runway at Oslo Airport. However, in my assessment Oslo Airport’s role in the Norwegian airport system will be an important aspect. Hence, I will see to that the necessary processes to reach a decision in this important question will continue.

7. Concluding remarks

In this address I have pointed at the high dependence of aviation in Norway. Further, I have shown that there is a high degree of governmental involvement in aviation, especially as the supply of aviation infrastructure is concerned. This high degree of involvement is necessary to secure access to air transport services throughout the country. Finally, I have mentioned some aspects concerning the question of a third runway at Oslo Airport.

Thank you for your attention, and I wish you good luck with the rest of the conference.