Copenhagen Airports launches cost-cutting programme and postpones investments

As SAS and other airlines have sharply reduced their services in and out of Copenhagen Airport (CPH) on account of the current health crisis, CPH 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, CPH 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, CPH 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, CPH expects to temporarily send home upwards of 1,500 employees over the coming weeks. It is important to emphasise that this will be a gradual process in step with the cutback in operations. CPH has a total of 2,600 employees, while the shops at the airport, the 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. 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,” says Copenhagen Airport CEO Thomas Woldbye.

Cutting back on costs and investments
After reviewing all CPH business areas, management 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.

Management has also identified a number of current projects and investments that can be put on hold for the time being. Overall, this will mean CAPEX savings in the airport’s investment programme of DKK 400–700 million for the remainder of the year. CPH has currently 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.