As CEO of the Stockholm Chamber of Commerce, which has more than 2,000 member companies, Maria Rankka is one of Sweden’s most important opinion shapers. Using the organisation as her base, she advocates policies in a number of fields, from housing construction to taxes to transport infrastructure. For her, airports are natural and necessary hubs for development.
In today’s globalised world and given the visibility we have in the business community in the Stockholm region, and indeed all of Sweden, aviation infrastructure is an incredibly important part of the business climate.
“We see how strong, well-functioning airports are important growth factors around the world. Global cities are linked in a network with other global cities and have a great deal of exchanges. The airports are the infrastructure in this economy.
“If we look at the whole world, slightly bigger cities are the most competitive. This is based on them having a sufficiently educated population and a sufficient number of companies driven by innovation. That’s the mix we want to have – a combination of population density, an adequate level of education and innovative companies. There’s higher growth and productivity in these more densely populated environments. As a result, businesses are highly specialised, and in order to continue recruiting and developing operations, a critical mass of skills is needed,” says Maria Rankka.
“In truth, Stockholm is fantastic. Although we’re a relatively small city, we’re on the top-ten list of cities that have the most main offices of companies in global industries. We’re ranked number eight, together with Osaka, Japan, and Taipei, Taiwan. We have an incredibly advanced business sector, many head offices and a thriving start-up scene. As for billion-dollar start-ups, what are often called unicorns, we’re number two per capita after Silicon Valley.
“I would like to see Stockholm going from the capital city to being a capital region in which Stockholm and Uppsala are a really strong link. If we expand the railway to four tracks the entire way between Stockholm and Uppsala, this will facilitate new housing north of Arlanda. This will also strengthen Arlanda and all the operations around the airport, and we can be an even more competitive metropolis from a global perspective, with an airport right in the middle of it.
“We absolutely want to merge together with Uppsala,” Maria Rankka stresses. “Our competitiveness will be enhanced if the region develops into a metropolis. Today Sweden has rather a lot of eggs in its ‘Stockholm basket’. The County of Stockholm has 23 per cent of Sweden’s population, while accounting for one third of the value of the Swedish economy as well as a significant share of its economic and population growth. My vision for Sweden is that we need at least one new Stockholm and that we let the region become one really big city. Air transport and the development of Arlanda are crucial there.”
TACKLING THE CLIMATE CHALLENGE
“Addressing environmental issues is an important prerequisite for potentially developing air travel. We haven’t discussed the opportunities and measures needed to a sufficient extent to get large-scale production of bio aviation fuel up and running. Unfortunately, I don’t think this will happen without political involvement – incentives are needed. The aviation tax being discussed today lacks any kind of link to environmentally-friendly aviation fuel. Technology and regulations also play a role. Better aircraft and engines are being developed, and that’s important. Air traffic today does not fly ‘as the crow flies’. Straighter flight paths through the EU alone could general fuel savings of ten per cent.
“I think it’s wrong to have a nationally designed aviation tax – air travel is part of the EU emission rights trading system, and a global system has been adopted. National regulations are the wrong way to go. Developments in Europe also show this. Aviation taxes are short-lived – if they’re even implemented. An aviation tax would be implemented at the cost of us not getting production of environmentally-friendly fuels under way. As a result, there will only be fewer resources to invest in the production phase. In the Netherlands, for instance, the tax there was in effect for twelve months. Denmark abolished its tax when passengers started flying out of Sweden. In Norway, there’s an aviation tax today that has had such a heavy impact that routes have been eliminated. And then someone usually points out the country with the highest aviation taxes – Britain – but doesn’t mention that Northern Ireland and Scotland are phasing out or lowering their aviation taxes. Less air travel does not lead to increased use of green fuel. A real policy for green air travel must transcend the level of slogans and probably requires official involvement in many ways,” says Maria Rankka.
“If I were a politician, I would contemplate the right combination of carrot and stick to get large-scale production under way, in order to transform Swedish domestic air travel as a first step. People in the industry say this can be done in 10–15 years, but it won’t happen on its own. The price differential is still far too large. Clear rules of the game are needed in order for there to be profitable investment in a production facility. Sweden has the forest materials, and a lot of the research in the field is Swedish. There’s a great deal of know-how, but we still haven’t gotten production going. Unfortunately, I don’t think this will get started by itself. We have to do some thinking.
“Flying and connecting places together have so many positive effects. So it’s much more important to find a sustainable way of doing this instead of killing off travel itself. I believe an aviation tax will lead to fewer and poorer air links. That can have a heavy impact on Swedish competitiveness. At the moment, Washington is following the matter of a Swedish aviation tax since Americans are worried it can affect preclearance.”
“With US border control – US preclearance – Arlanda will be more attractive. So it’s a shame that the Swedish State is not prepared to take the risk and already start building for it now. I understand that Swedavia, given the company’s ownership directive, can’t do this on its own. But the government has spotlighted the preclearance issue and could give its OK for investment and adopt a different view on the company’s financial return requirements. Now a decision won’t be made until summer 2018, but this law should be able to enter into force at the end of June. If the State isn’t prepared to tell Swedavia that they can get started and build now, it means we’ll lose a whole year,” she emphasises.
“Sweden and the US have already signed the agreement. An inquiry is now under way to resolve the outstanding issues. If we handle this properly, Arlanda can be the first airport with US border control in this round. That’s a strong competitive advantage. Preclearance is a good example of a service that makes the airport more attractive, and good service for passengers and airlines is what’s most important for competitiveness. It also means airlines can establish new routes to Stockholm in order to aggregate traffic to the US. That entails major opportunities for Arlanda and Sweden.”
CONCERNING THE NEED FOR CAPACITY
“What’s needed now are quick, forceful decisions on the expansion of Arlanda’s capacity. It’s a question of a fourth runway. Ground transport and better capacity to handle large aircraft must also be developed. This must be planned, decided on and constructed. In order to ensure long-term operations and create better potential, in the short term the aviation tax must be stopped, preclearance must be implemented, and it would be good to sign a new agreement to enable flights over Russia. Then it’s not enough for us to provide scope for increased capacity needs – we also have to maximise Arlanda’s potential.
“A city and region like Stockholm needs two airport locations, so I’ve been active in the discussion about Bromma Stockholm Airport. One argument that I find important is that redundancy is needed in the system. Bromma as such has also promoted competition in the air travel industry. Then the fact that the airport is located where it is – why destroy functional infrastructure that’s also located close to central Stockholm? If you close the airport, you’ll never have a chance to open it again. It was an absolutely historic mistake to close Tullinge Airport southwest of Stockholm and get rid of it.
“There’s no point discussing the future of Bromma now. Bromma has to carry on for the foreseeable future. Once the future of Arlanda is ensured, then we could perhaps discuss the matter. Who knows – maybe it will be well suited for drones! In any case, it’s good that the unrealistic ideas of closing Bromma before the agreement period ends are now apparently no longer under discussion.”
COLLABORATION AND FUNDING
“There’s certainly more that can be done. If one reads the government report on air travel in the Stockholm region, it’s clear what an obscure position Arlanda has had in Swedish politics. One needs to consider why a place that’s so important to Sweden and to the economy of the entire country has been treated this way. Copenhagen Airport is a great success. You also really sense this as a passenger, even if you’re only transferring there. The airport has a private owner. Perhaps Arlanda can be privatised and be an independent company, but this unfair treatment cannot continue,” says Maria Rankka.
“I’ve sat on the board of the Swedish Transport Agency, and the agency invests in roads and railways. But when it comes to Arlanda, the State doesn’t provide any money. All capital expenditures are funded by earnings. When people have discussions and say that air travel isn’t shouldering its costs, they’re comparing apples and oranges. It would be an extremely generous act if calculations were made so that these modes of transport could be compared in a different way.
“If someone says that air travel is not shouldering its costs, they’re also only looking at tax revenue, not at the fact that Swedavia pays for the infrastructure itself. Twelve billion Swedish kronor is now being invested in Arlanda, and the company has an aggressive investment plan, but ultimately it’s passengers and the industry, together with tenants and other stakeholders, that are paying for the expansion.”
IN TEN YEARS
“In ten years, I hope there will be sufficient infrastructure for as many take-offs and landings as are needed, even if a fourth and fifth runway are required. But it will take more than ten years to get this in place. That would be an extremely short period of time to get all the permits and decisions and then carry out construction. It took almost 20 years to get the airport’s most recent environmental permit through. But in ten years, Arlanda will be one of the best airports to come to.”
“In 2070, Arlanda will also be important. Perhaps we’ll travel by Hyperloop then, but considered from the perspective of the current paradigm, the airport will be even more important than today. I don’t know whether there will be a technological revolution that will enable us to travel by other means – while that’s a long lead time, 2070 is still pretty far away. But we’ll need to move around. Access will be at least as important as it is now. The Stockholm–Uppsala corridor will be completely urbanised and built up by then.”
BORN: 1975 in Falun, Sweden
OCCUPATION:CEO of the Stockholm Chamber of Commerce
CURRENTLY: Member of the Board of Directors for Stockholmsmässan (which arranges trade fairs and conventions in Stockholm), Business Sweden and Pop House AB.
Also a columnist for the Swedish daily Svenska Dagbladet and author of the book Uppdrag Förändring (Lava 2016) about change leadership.
TRAVELS: to Austin, Texas
When I travel on my own
“I flew to the US and Cuba, of course, which I visited a while ago, but I take the train to Uppsala. I live in Vasastan in central and can walk to the office. The place I’m going to and the distance determine how I travel. Domestic flights are really efficient calculated on a per passenger basis, and we live in a sparsely populated country with such long distances. Many times, it’s more environmentally beneficial to fly than build a railway. So I’m passionate about the issue of biofuel for aviation.”
“Cuba was interesting, but once is enough. I travel a lot, both in my job and for leisure, and I like many different places. In Sweden, I like Luleå and Norrbotten – that’s a really nice part of the country. I’m fascinated by the Middle East, although I may not travel there for leisure. And then I’m fond of Austin, Texas.
“I fell in love with Austin the first time I travelled there. The people there are incredibly nice. Austin was a small college town in the 1960s, a little smaller than Stockholm, but now it’s been the fastest growing city in the US for a number of years. There’s a lot of live music, a lot of tech companies, creative people and really, really, really nice weather. Austin is cool.”
US preclearance allows passengers flying to America to go through US border control while they are still at Arlanda. It simplifies travel and paves the way for new opportunities. That is because US border control enables direct service to American domestic airports. In 2016, a bilateral agreement between Sweden and the US and a memorandum of understanding between Swedavia and US Customs and Border Protection were signed. At Arlanda, construction of a dedicated preclearance facility is planned for Pier F in Terminal 5.
HYPERLOOP. PNEUMATIC POST ON A GIGANTIC SCALE
Hyperloop is like a giant pneumatic postal system with very low air pressure. Capsules for passengers and goods are sent through the tube. The capsules ride on magnetic rails and since air resistance is low, they can reach a speed of 1,200 kilometres an hour. In Finland, planning is under way for the construction of a 15 kilometre-long test track between Turku and Salo, the first step in a potential Turku-Helsinki route, with a possible extension to Stockholm. It is estimated that travel time between the two capitals would be less than 30 minutes. According to Hyperloop, construction of a pipeline would cost about 180 billion kronor. Other stakeholders are reported to be India, the Netherlands and the United Arab Emirates.