COPENHAGEN AIRPORT LAUNCHES COST CUTTING PROGRAMME
Copenhagen Airport is to put its investment plans on hold as part of a cost cutting programme designed to help it see out the coronavirus crisis.
The airport, which reveals that the move is in response to falling passenger numbers and the decision by SAS and other airlines to sharply reduce their services in and out of Copenhagen (CPH), says that it is preparing to cut back operations substantially during the upcoming period.
Over the past few days, airport management has been working on a plan to cut down operating costs and postpone the current investment plans for the airport.
At the same time, the airport operator has engaged with union representatives to discuss measures that can help the airport maintain minimum operations while helping the airport to sharply reduce its costs.
As part of these efforts, it expects to make use of the wage compensation package presented by the Danish government and labour market parties.
CPH expects to apply the package for employees who will be temporarily sent home due to the sharp drop in operations.
At the present time, the airport expects to temporarily send home upwards of 1,500 employees over the coming weeks. It notes that this will be a gradual process in step with the cutback in operations.
The airport operator has a total of 2,600 employees, while the gateway’s shops, airlines and the handling companies employ between 22,000 and 23,000 people between them.
“We’re currently attempting to manage an entirely unusual and grave crisis situation for the airport,” says Copenhagen Airport CEO, Thomas Woldbye.
“In addition to what we can do ourselves to reduce our operations, we welcome the solution presented by the government and the labour market parties involving wage compensation for employees.
“It enables us to navigate the situation by taking a longer-term view and making a dedicated effort to avoid redundancies, while the crisis persists.”
Cutting back on costs and investments
After reviewing all business areas, the airport operator;s management team says that it has identified potential savings in the remainder of the year of DKK 250-350 million in current operating costs, including costs for marketing, consulting services and external contracts as well as reduced staff costs, not counting the effects of the wage compensation scheme which will be phased in gradually.
The airport notes that it also identified a number of current projects and investments that can be put on hold for the time being.
Overall, it says, this will mean CAPEX savings in the airport’s investment programme of DKK 400-700 million for the remainder of the year.
The airport currently has a number of large development projects, including the airside expansion of Terminal 3, and the postponements being made will involve a portion of this project.
In addition, a number of smaller projects to upgrade the airport infrastructure will be put on hold, including certain climate initiatives such as the installation of new solar panels and EV charging points. All safety-related investments will be exempt from the cost-cutting programme.
Woldbye says: “While many airlines are currently shutting down large parts of their operations at CPH, we have an important responsibility to keep the airport running and making sure that critical flight operations, such as freight, can continue.
“Our main priority is to make sure that the initiatives we’re launching now will not have a long-term negative impact on our ability to return quickly to normal operations when we have to. At the same time, we have to protect CPH’s financial foundation and our long-term potential to act as critical infrastructure in Denmark.”
Around 33% of Denmark’s total exports is transported by air, and large quantities of pharmaceutical and consumables are flown in and out of the country every day.