Fair – Towards Electric Aviation in the Kvarken Region

Report within the FAIR project by Lars Westin, Professor in Regional economics, Umeå University TOWARDS ELECTRIC AVIATION IN THE KVARKEN REGION This paper is a first investigation of the possibilities to establish a commercially viable regular commuter airline in east-west direction over the Kvarken strait between Finland and Sweden. Institutional solutions are proposed, as well as measures to be taken in order for the region to reap the benefits of such a route. Initially, the report thus deals with the most important question for a regional policy maker, the sources to and the creation of wealth in the region. It is suggested that the Kvarken region must use any investment in airlines in a strategy to increase its human capital. This will both attract industries and increase the sources of potential passengers for an airline. Thereafter the market for electric aviation is described and analysed from a pure travel-time perspective. Relations where electric aviation may be competitive and where technical constraints and travel time by other means limit the market are identified. The Kvarken strait offer travel-times by air that are competitive compared with alternatives. However, it is found that electric engines in airplanes alone, not for sure implies that regional aviation will be realized. Hence, an institutional solution for the initiation of a regular commuter route over the Kvarken strait is suggested while observing that the aviation market is filled with what seem to be both policy and market failures. This discussion is important in initiating and preparing the region for the various alternative management options that might arise. Finally, the report returns to a discussion of possible impacts of regional electric aviation for the Kvarken region.