New charges agreement strengthens Copenhagen’s future as a hub

Brian Petersen, CEO, Copenhagen Airports: “With a changed price structure, the agreement will serve to consolidate CPH’s position as the region’s key hub in the coming years.”

Brian Petersen, CEO, Copenhagen Airports: “With a changed price structure, the agreement will serve to consolidate CPH’s position as the region’s key hub in the coming years.”

An innovative new pricing structure will see the take-off charge reduced by 25% and the passenger charge increased by 18.6%. While this means that the airport charge will represent a larger proportion of the ticket price in future, that will be offset by reduction of the take-off charge paid by airlines. The new structure will improve the alignment between the success of the airport and its airline partners by increasing the proportion of charges related directly to passenger numbers rather than aircraft weight.

For the remainder of the contract period after April 2011, charges will be subject to annual increases equivalent to the Danish Consumer Price Index (CPI) plus 1%. The deal will also provide for new facilities to boost the airport’s competitive position; Copenhagen Airports has undertaken to invest more than DKK 2.6 billion (€350m) in infrastructure expansion and improvements over the contract period.

SAS, Cimber Sterling and IATA, which together represent 86% of all traffic at Copenhagen Airport, are all supportive of the new charges agreement. “Macquarie Airports (MAp) welcomes this long-term commercial agreement and the certainty it provides,” said Kerrie Mather, CEO, MAp. “The agreement recognises the shared interests of Copenhagen Airport and its airline partners in the growth of the Danish aviation industry. It provides a sound basis for the promotion of passenger growth and appropriate levels of investment in facilities and quality of service.”

A key element of the Copenhagen Airports strategy is continued growth in the low-cost sector. The new low-cost pier – CPH Swift – will open in 2010, with charges to be negotiated separately.

A key element of the Copenhagen Airports strategy is continued growth in the low-cost sector. The new low-cost pier – CPH Swift – will open in 2010, with charges to be negotiated separately.

Expanded transfer product

It is considered absolutely essential to the airport, the Capital Region and to Denmark that Copenhagen Airport is able to maintain and expand its position as a Scandinavian hub by remaining an attractive partner to airlines with a significant volume of transfer passengers, including SAS. “With a changed price structure, the agreement will serve to consolidate CPH’s position as the region’s key hub in the coming years,” said Brian Petersen, CEO, Copenhagen Airports. “Our transfer product must be expanded and improved on an ongoing basis as we have done with the refurbishment of Pier C. That is why it is an essential element of the charges agreement that we undertake to invest more than DKK 2.6 billion (€350m) in the aeronautical part of the business over the next five-and-a-half-years.”

The investment of at least DKK 500 million per year between 1 January 2010 and 31 March 2015 will include facilities such as baggage handling, jet bridges, gates and check-in facilities for the benefit of both airlines and passengers. “These investments will serve to strengthen CPH in the mounting competition with other northern European airports,” explained Petersen.

New low-cost terminal

Petersen: “Our transfer product must be expanded and improved on an ongoing basis as we have done with the refurbishment of Pier C. That is why it is an essential element of the charges agreement that we undertake to invest more than DKK 2.6 billion (EURO*350m) in the aeronautical part of the business over the next five-and-a-half-years.”

Petersen: “Our transfer product must be expanded and improved on an ongoing basis as we have done with the refurbishment of Pier C. That is why it is an essential element of the charges agreement that we undertake to invest more than DKK 2.6 billion (€350m) in the aeronautical part of the business over the next five-and-a-half-years.”

While the agreement will strengthen one part of the Copenhagen Airports strategy – to continually expand the hub and promote the development of intercontinental routes, another key strategic element is continued growth in the low-cost sector. The new low-cost pier – CPH Swift – will open in 2010, with charges to be negotiated separately. “Low-cost airlines are growing and have expanded their presence at CPH to the current 14% market share at the airport (from approximately 1.5% in 2000).

Their requirements are different from those of the traditional airlines and, in order to meet these specific requirements, CPH will open the low-cost terminal Swift in 2010,” said Petersen.

Environment angle

Another important element of the agreement is a NOx-based emissions charge that will be introduced from 1 April 2010. Aimed at encouraging airlines to use more environmentally friendly aircraft, the details of the emissions charge have not yet been finalised.

The new charges agreement reflects the strength of the relationship between Copenhagen Airport and its airline customers, demonstrating the strong joint commercial interest in the growth of Danish civil aviation. This is amply demonstrated by the fact that airlines representing 86% of all traffic at Copenhagen Airport support the agreement. Senior Vice-President Flemming Jensen, COO and Country Manager of SAS Denmark, said: “I believe that we have reached an agreement that balances in an excellent way the interests of all parties both in terms of structure and level of charges as well as investments.

More importantly, a high degree of transparency and constructive dialogue throughout the negotiations have created mutual insights and understanding that cater for a close and fruitful future co-operation.”

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