ANALYSIS: Copenhagen positions for traffic battle ahead

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Copenhagen Airports’ efforts to mobilise its community partners to support long-term growth ambitions for the Danish capital’s Kastrup hub illustrates the jockeying for position to secure traffic growth in the region.

The airport passed the 24 million passenger mark in 2013, making Copenhagen Kastrup the 15th biggest airport in Europe. After traffic stalled and slumped in 2008 and 2009 – partly because of the collapse of Danish budget carrier Sterling Airways – Copenhagen has returned to steady growth. Passenger numbers have increased from just under 20 million in 2009, and grew another 3% last year.

The airport has now outlined a vision to grow to 40 million passengers annually, a capacity it believes it can cater for by expanding existing facilities rather than building a new runway or developing an additional, separate terminal.

“Our initial plan is to [get there in] 2035, but it will be the economic development that will determine this. We can accelerate or decelerate our growth plans,” says Copenhagen Airports chief executive Thomas Woldbye.

“We can grow the traffic to 40 million, but what is crucial is whether it takes 20 or 30 years to do that,” he says. The airport has launched an initiative to bring in local business, tourism and political interests to help drive such growth.

“We want to maintain our position and, if we want to do that, we need to run faster than our competitors,” Woldbye adds. “There will be growth. The question is whether it is coming here or other places. The competition is intense and a lot of regions see what we do and want to see the same results. So it’s a really tough market. The experts says there is only room for one northern European hub, and we hope that’s us.”

There are a number of airports nestled around Copenhagen that are of comparative size, location, or both. These include Hamburg and the Berlin airports in Germany to the south and other Nordic hubs like Oslo Gardermoen, Stockholm Arlanda and Helsinki Vantaa.

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Hamburg, the nearest of the major airports to Copenhagen by geography, saw passenger numbers slip 1.4% last year, to 13.4 million. This in part reflects route cuts from Air Berlin on top of several days of strikes and severe weather. However, Hamburg airport points to expansion this summer by Lufthansa non-hub unit Germanwings, among others, and expects to pass 14 million passengers this year.

Berlin – directly south and nearly as close as Hamburg – handled more than 26 million passengers in 2013 across its Tegel and Schonefeld sites. Its development, though, has been stalled by the high-profile delays to the city’s new Brandenburg International airport. Last month, Berlin’s airport operator said it is now planning to open the German capital’s long-delayed flagship hub in 2015 and start limited operations in the terminal’s northern pier in July 2014.

Growth at airports is to some extent tied to the fortunes of home operators. Copenhagen, like many of its rival airports, has a global alliance member as its largest operator. SAS – also the biggest operator at neighbouring Stockholm Arlanda and Oslo Gardermoen – kept traffic flat last year, and its passenger numbers are only a little above those of 2008 levels.

SAS has had plenty of challenges on its short-haul network, where it has faced fierce competition from Norwegian, but Woldbye points to the airline’s activity in the long-haul market. The carrier serves eight intercontinental destinations from the Danish airport.

Indeed, Copenhagen compares favourably with neighbouring airports in terms of its long-haul network.

Copenhagen airport’s long-haul network

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Source: Innovata FlightMaps Analytics

Woldbye sees expanding the long-haul network as crucial to the airport’s development, and has been actively targeting new links with Asian cities – a strategy Finnair has successfully followed from its Helsinki Vantaa base. “We aim to reach around 40 intercontinental routes. Today, we have 26,” says Woldbye.

That will become 27 when Norwegian launches flights to Los Angeles in March. Here, the airport benefits from a second local operator developing a long-haul network from the airport. Norwegian is one of several low-cost carriers serving Copenhagen, which so far do not include Ryanair. The Irish budget carrier in November 2013 again applied for slots – 16 in total – at Copenhagen Kastrup, the third time it has done so since 2010, although it has not operated any flights to the facility so far.

While Copenhagen chimes with Ryanair’s recent dalliance with more mainstream airports, the airline’s outgoing chief commerical officer Michael Cawley appears to play down the likelihood of the airline taking up the slots imminently. “We think the markets and the airports we have chosen are more attractive given the low-cost deals we have done at the moment, but Copenhagen remains a city which we are interested in, and we speak to the airport often,” he says.

Elsewhere Woldbye believes a key driver of future growth at the airport could be an opening up of aviation markets into Russia. “It is a problem that we can’t fly freely to Russia,” he says, pointing to the opportunity for growth from a pan-Nordic aviation agreement with Russia.