Interim report of Copenhagen Airports A/S (CPH) for the period 1 January – 30 September 2020 - Seite 2

Summer optimism was short-lived
CPH’s financial performance is a reflection of the fact that large parts of the airport’s activities were virtually at a standstill in March and the following months. Rows of parked aircraft, closed shops and deserted terminals   were the new reality during the spring months. In mid-June, the European aviation authorities introduced new protective equipment, hygiene and social distancing guidelines for airport travellers and staff. At the same time, a number of European countries successfully contained the spread of COVID-19, prompting many countries to allow travel again.

While this led to increasing passenger numbers over the summer period, travel demand was still materially below normal levels. In the first week of June, there were scheduled flights to and from 18 destinations. By August, the number of destinations had gradually increased to around 100. The many destinations notwithstanding, passenger numbers during the three summer months were still down by 80-85% from the summer of 2019 due to significantly reduced frequencies within the routes offered. For the period January to September 2020, passenger numbers were down by 16.6 million – or 71.3% – from the year-earlier period.

In the third quarter, in response to COVID-19 flare-ups across the European continent, travel guidelines were tightened anew, triggering another sharp drop in passenger numbers. The hope shared across the industry of a gradual recovery of air traffic in the course of the second half of the year was extinguished as travel guidelines were tightened week after week. This affected not just CPH's core business at the airport, but the entire Danish tourism industry and had far-reaching implications for many people, who lost their jobs and income base. CPH has also had to let go of many highly skilled colleagues as a result of the crisis. At the end of August, CPH had to make the very difficult decision of initiating large redundancies. 625 full-time positions were cut through dismissals, elimination of vacant positions and voluntary resignations.

These job cuts in August reduced annual operating costs at the airport by about DKK 325 million, but due to notices of termination, only a limited proportion of these savings will feed through to 2020 results.

Additional cost measures due to dramatic drop in passenger traffic
In addition to the above-mentioned measures and as a result of the significant decline in passenger traffic in recent months, CPH has decided to launch further cost-saving initiatives. Among other things, this will be done by using the government’s scheme for distribution of work as well as increasing supplementary training and upskilling of employees. In addition, it is expected that it will be necessary to do further redundancies. Together, the initiatives will provide an additional annual saving corresponding to approximately 325 full-time positions. However, the major part of these savings is expected to be found through the distribution of work scheme and education initiatives, and not redundancies.