The Executive Board of HSL approved the strategy on 14 December.
“Various strategic options were widely discussed and with broad stakeholder engagement. In my opinion, the end result is excellent for the future of Helsinki region public transport and our customers,” says the Chair of HSL’s Executive Board, Matias Pajula.
"Even the best strategy cannot be implemented without communications. This strategy obliges HSL to constantly interact with customers and the surrounding world," adds the Vice-Chair of the Board, Pekka Sauri.
“Our strategy responds to the challenges of these exceptionally difficult times in an ambitious way. It is a strategy for customer-centric sustainable growth and economic recovery. Our emission targets will contribute to the achievement of the climate goals of our biggest owner municipalities. But it is equally a strategy of social and economic responsibility,” says HSL Executive Director, Mika Nykänen.
Four strategic objectives
- Towards zero-emission public transport
Finland and the capital region municipalities have ambitious goals for carbon neutrality and sustainable development. Finland wants to be carbon neutral in 2035, the three largest municipalities in the HSL area want to reach carbon neutrality already in 2030. Through our activities, we want to contribute to the achievement of these goals by developing emission-free public transport services. Our goal is to cut CO2 emissions from public transport by 90 percent by 2025 compared to 2010. By 2035, our goal is to provide emission-free public transport services. - Record high use of public transport
Our objective for the coming strategy period is for the use of public transport to resume a strong growth trajectory and to reach even slightly higher number of boardings – 400 million boardings in 2025 – than before the pandemic. This means a 70 percent increase in passenger numbers compared to the 2021 forecast. - Cost-effective public transport
Infrastructure, operating and financing costs are expected to increase during the coming strategy period due to previous decisions and investments in, for example, public transport infrastructure and depots. We seek to achieve cost savings especially when renewing transport service contracts. The cost-efficiency target of operations for the coming strategy period is passenger kilometer cost of EUR 0.25/km, excluding infrastructure. This measures the overall cost-effectiveness of our operations taking special account of the impact of the measures that HSL can promote during the coming strategy period. - Balanced economy
Our goal is to achieve the target subsidy level of 50 percent for corporate governance. The income target for 2025 is EUR 400 million. Ticket revenue will remain our main source of income and increasing the revenue will be at the core of our work. The amount of ticket revenue is highly dependent on the development of passenger numbers. However, we also seek to increase other income sources during the strategy period. The target means a 24 percent increase in income compared to the 2021 forecast.
The goal of returning the use of public transport into a growth trajectory and exceeding the record level of 2019 in 2025 is demanding. It means a 70 percent increase from the current level.
“The key to achieving this goal is to better understand the needs of our customers and to be able to respond to them sufficiently quickly with high-quality, demand-responsive and cost-effective supply. Data and business-driven service development is at the core of our operations. This means more analytical assessment of costs and benefits,” states Nykänen.
In the coming years, our challenge will be to balance our economy. In the target situation, 50 percent of HSL’s operating income is from ticket revenue and 50 percent from funding from the owner municipalities. Due to the loss of revenue caused by the coronavirus pandemic, municipal contributions currently cover nearly 60 percent of HSL’s total expenditure, which is well above HSL’s general principle and the target level of 50 percent subsidy. The goal is to bring municipal contributions back to an average of 50 percent. What HSL can primarily do is to seek to improve the cost-effectiveness of public transport provision.
In the coming years, HSL’s expenses will increase due to investments, infrastructure and operating costs, as well as increasing financing costs. Infrastructure projects are expected to increase infrastructure costs from just under EUR 150 million today to close to EUR 250 million per year in the late 2020s. In addition, procurement of new vehicles and depots will increase costs. Infrastructure and operating costs account for about 90 percent of our operating expenses.
Better data, active networks of partners
HSL’s operating model will be developed in such a way that the planning areas will be managed by multi-professional groups, where experts in transport planning, customer understanding, data and finances will aim to provide the best possible service in an accountable manner. The smoothness of travel and travel chains plays an important role in defining good customer experience and the competitiveness of public transport.
In addition to a better understanding of data and the market, improving the smoothness of travel chains requires a stronger engagement in partner networks.
“We believe that closer cooperation with various partners will open new business opportunities. We raise our bar on how we can use data, analytics and partnerships to improve the smoothness of our customers’ travel chains and our own productivity. This is not only HSL’s work alone. It is important that we are open to experimenting and developing services together with our partners,” says Mika Nykänen.