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Danish dynamism

Lucy Siebert discovers more about Copenhagen Airport’s new low-cost pier, relationship with its airlines and route development strategy.

The air services team at Copenhagen must be on a bit of a high following the announcement that Delta intends to launch a new direct daily service between the Danish capital and New York JFK from May 2010.

Not only does the announcement represent a new long-haul service for the medium-sized European hub, but it also fills what was previously the airport’s number one biggest unserved market, with almost 90,000 passengers per year flying between Copenhagen and JFK via other hubs.

“There are already two direct services between Copenhagen and Newark (with SAS/United and Continental). However, the market potential is so great that there is a basis for a third airline, which will strengthen Copenhagen as a destination. The increased accessibility to and from the United States will benefit both business and tourism,” says Carsten Nørland, aviation director at Copenhagen Airports.

Delta’s new flight is in addition to its existing direct daily service to Atlanta and is in line with the airline’s strategy of expanding its international footprint, particularly in Europe.

The new flight also marks a success in the Copenhagen team’s challenging ‘dual airport’ strategy. This is focused on servicing the premium full-service airlines through improved products and services and growing transfer traffic, but also encouraging low-cost carrier (LCC) growth through the opening of facilities such as the planned new CPH Swift pier.

Currently the airport serves 21.5 million passengers a year, with 15 intercontinental routes, 75 of which are European routings.

While creating a dual airport strategy is not an easy task, Nørland told Airport World that he believes that it is vital for Copenhagen’s success. “It is very challenging but necessary for the future. We simply can’t be successful if we can only service one product and it is imperative to understand that not all customers are the same,” he says.

“While CPH Swift is important to us, it remains imperative to reinforce Copenhagen’s position as a top hub in Scandinavia by having a premium product and ensuring that the network carriers have all the facilities they need too. Our aim is to ensure that the experience at Copenhagen is excellent for both our low-cost carrier and legacy airline passengers.”

Copenhagen’s position as a leading hub in Scandinavia is well established, largely due to the Danes’ love of flying. “Denmark has one of the highest travel propensities in the European Union,” enthuses Nørland. “Traditionally, southern Europe was the most popular region with leisure travellers, but now people are looking to long-haul destinations especially during the winter time.”

One such place is Bangkok, which remains a firm favourite with Danish tourists and is served daily by both SAS and Thai.

And with Copenhagen being SAS’s base and a Star Alliance hub (as well as DHL’s Scandinavian hub) there is a growing market of passengers connecting at Copenhagen from Star Alliance partner airlines onward to the East, particularly Tokyo and Beijing.

On the business travel side, traffic on the Scandinavian triangle (between Copenhagen, Oslo and Stockholm) and intra-Europe destinations has been growing which has, in turn, made low-cost traffic increasingly vital for the airport.

Today, Copenhagen counts the low-cost operators Norwegian, Cimber Sterling and easyJet among its top five airlines, while other LCCs such as transavia, Air Berlin and Iceland Express have a growing presence.

Of course, the bankruptcy of Sterling in November 2008 left a gap in the market – but it was one that was filled almost immediately. “After the demise of Sterling, Norwegian announced a base at Copenhagen. Transavia and easyJet expanded their presence and Cimber, a smaller, domestic airline took over some of the remains,” says Nørland.

He continues: “Transavia is growing its base here, which is testament to the strength of traffic in Scandinavia. Plus, there has been a lot of interest in establishing a base here from other airlines, which is linked to the development of the new Swift pier.”

With low-cost traffic becoming increasingly important, construction of the CPH Swift pier began in early 2009 and is due to open on schedule at the start of the winter timetables in October 2010.

The new €27 million complex will have six stands (with the option to increase this with an additional five stands) and the capacity to handle up to six million passengers per annum.

It will boast 6,700sqm of floor space in addition to a 2,400sqm hallway connecting it with Pier D and Terminal 3. The turnkey contractor selected for the project is Brødrene A. & B. Andersen A/S. The latest addition to the gateway’s infrastructure has been designed by Vilhelm Lauritzen Architects.

“The low-cost carriers have generated substantial growth at Copenhagen Airport in recent years and continue to expand, even in the currently depressed market. With CPH Swift, we are creating a new concept and providing new physical facilities that meet low-cost carrier demand for the quick turnaround of flights,” comments Brian Petersen, CEO of Copenhagen Airports A/S.

Nørland is certainly in no doubt about the importance of the facility, calling its development “absolutely vital” for the airport.

He says: “At Copenhagen we have recognised the need to respond to the low-cost trend and to a different type of airline and consumer. Previously, airports only needed to provide one product and one service, but now we can see that we need to offer a different product and deliver this product according to the needs of the airline.

“It’s not a case of one size fits all – LCCs are very different from full-service carriers. They have differentiated products and costs and a focused airport should be able to provide for different customers. Copenhagen believes in developing a dual model with differentiated product and prices.”

So while there is a clear aim to grow point-to-point LCC traffic, Nørland also wants to see Copenhagen’s transfer processes improved. “A third of Copenhagen’s traffic is transfer traffic, so we are focused on developing initiatives for the transfer product,” he remarks. “We want to ensure that passengers consciously choose to make a transfer at Copenhagen rather than another European hub.”

Much of the work on the transit side is aimed at reducing transfer times to 30 minutes and improving the baggage handling process.

Copenhagen’s focus on driving down costs has also resulted in a much-publicised decision to freeze aviation charges until April 2011. Thereafter, charges will be subject to annual increases equivalent to Denmark’s customer price index (CPI), plus one percent.

The agreement also means a change to the takeoff charges structure, resulting in takeoff charges being reduced by 25% and passenger charges rising by 18.6%. Plus, the airport has committed to investing €350 million in aeronautical services, while a NOx-based emissions charge will be introduced from April 2010 which is aimed at encouraging airlines to use more environmentally friendly aircraft.

“I am very satisfied that we have succeeded in negotiating a longterm agreement which ensures that the airlines know their cost level for a long time going forward,” comments Nørland.

This is just one example of how the CPH team pro-actively work with its airline partners and Nørland believes that even more co-operation between airports and carriers will be seen in the future.

“The airlines are clearly looking for more risk sharing right now and as any kind of decision making inevitably costs money,” admits Nørland. “We see a trend towards more detail and for the airline and airport to work more closely together to make the right decision.”

After the gloom of the past 12 months, with the low-cost pier under construction and new long-haul service on the way, 2010 could turn out to be a bright year for Copenhagen Airport.

Airport World 2009 - Issue 6

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