04.02.2005
Business travellers choose low-cost carriers

Business class and business trips used to go hand – leaving low-fare tickets and low-cost carriers to leisure travellers. This is not necessarily so any more. The Danish business sector has broken this pattern, and business travellers are increasingly travelling low-cost.

A new survey has showed that business travellers accounted for more than 50% of the Danish passengers on low-cost flights out of Copenhagen Airport. The survey was made among 2,600 passengers travelling on the seven largest low-cost carriers in the autumn of 2004.

About 50% of the passengers surveyed were Danes, and 63% of these passengers stated that they were travelling on “business”, whilst the remaining 37% stated that the purpose of their trip was “leisure”. Among the Swedish passengers, the second largest group (15%), the ratio was 51% business travellers to 49% leisure travellers.

“We are surprised that so many of the passengers on the low-cost flights are business travellers, but it underlines the importance of maintaining and increasing the number of low-cost routes out of Copenhagen Airport, in order for us to continue to meet the demands and requirements of the business sector,” comments Trille Tang Dalsgaard, head of Airline Relations at Copenhagen Airports A/S.

Low-cost traffic accounted for 50% of growth

The number of low-cost passengers at Copenhagen Airport rose by 631,361 passengers in 2004, a 54.8% year-on-year increase. This meant that the low-cost routes accounted for almost 50% of the total increase bby 1.3 million passengers at Copenhagen Airport in 2004.

The total number of passengers on low-cost flights to and from the airport last year was 1.8 million, equivalent to 9.4% of all passengers at the airport, up from 6.5% in 2003 and only 2.9% in 2002.

Passenger tax inhibits growth

In spite of the growth in low-cost traffic, Copenhagen Airport also lost a number of low-cost routes in 2004. easyJet stopped its flights to Newcastle and Bristol stating that these routes were not profitable due to the special Danish passenger tax of DKK 75 per passenger.

The special tax makes it is up to DKK 10,000-15,000 more expensive per flight to take off from Danish airports than from other airports in Europe. As the profit margins are very low in the low-cost market, amounts of this scope may be the determining factor of whether it is sound business to operate on a route.

“Against this background, we are pleased to note that the Danish government is apparently prepared to abolish or reduce the passenger tax. We hope that there will be a broad consensus – also after the Danish election – to improve air traffic conditions in Denmark,” adds Trille Tang Dalsgaard.

In January, the government set up a task force headed by the Ministry of Taxation to analyse the effects of the passenger tax on employment and business development, including tourism and regional conditions.