CPH Q1 interim report: Pre-tax loss of DKK 59 million

2023 looks to be a financially challenging year for Copenhagen Airports. Following a pre-tax loss of DKK 59 million for the first quarter of 2023, the airport is now looking forward to a summer period where travellers will have more than 160 direct destinations to choose from. The activity level in the airport is increasing, with more employees taken on and busy construction sites. 

The first quarter is usually the quietest period for the aviation industry. Copenhagen Airport (CPH) had 5.2 million travellers during the first three months of the year.

Revenue ended at DKK 839 million, a 45% increase on the first quarter of 2022.

CPH incurred a loss before tax of DKK 59 million, which was a 66% improvement relative to the Q1 2022 pre-tax loss of DKK 171 million.

“The loss was to be expected. Breaking it down month by month, we made a slight profit in March, and that is an indicator for the coming quarters, in which we expect to turn a profit,” says Copenhagen Airport CEO Thomas Woldbye.

Ready for the summer season

Copenhagen Airport is ready for a busy summer this year. The company has taken on another 100 employees in addition to the 810 hired in 2022.

“Our operations are ready and primed to send holidaymakers from Denmark and southern Sweden off on their summer travels and to welcome the many tourists who will be flying to Denmark,” says Woldbye.

Between now and October, Copenhagen Airport will offer flights to more than 160 destinations – or nine more than in the 2022 summer season.

Financial challenges

Although more than eight out of ten passengers are back after the COVID-19 pandemic, Copenhagen Airport is still facing financial challenges.

“We scaled down our expenses and investment activity in 2022. We can’t do that to the same extent in 2023, because running and developing the airport has become much more expensive this year,” explains Woldbye.

The cost increases are due to wages, inflation, tightened regulatory requirements as well as interest expenses and repayments on the considerable debt taken on to keep the airport running during the pandemic.

Furthermore, CPH expects to invest up to DKK 1.7 billion to develop the airport in 2023. The substantial investments planned combined with the limited earnings mean that CPH expects negative cash flows for 2023 as a whole.

“With that in mind, we must continue to run the airport as efficiently as possible and consistently work to keep expenditures low," says Woldbye.

Charges a challenge in 2023

While the costs of running the airport have risen, the charges the airlines pay for using the airport under the current charges agreement have not changed to the same extent. The charges are due to be renegotiated this year, but a new charges agreement will not take effect until 2024.

“The fact that we will be operating under the current charges in a year when our costs have risen considerably poses a financial challenge for us. The charges make up the very foundation of our airport’s finances and our ability to invest for the future, the green transition and our position as Denmark’s international traffic hub,” Woldbye emphasises.

Confident about the future

Despite the year’s financial challenges, Woldbye emphasises that there is a sense of confidence about the future at CPH.

“Most of our travellers are back, and we’re well into our largest construction project for several decades: Developing the airside terminal area between gates C and B which will provide a lot of extra space for the baggage reclaim area, passenger areas and passport control,” says Woldbye.

The initial phases of the project are scheduled for completion in 2027.

The appetite for travelling is as strong as ever, and overall revenue is expected to grow by 10% in 2023. The growth rate will depend heavily on the number of passengers, which is expected to climb to more than 25 million this year.

If passenger numbers reach 25 million, CPH expects a pre-tax profit in the DKK 150–200 million range.  Growth in passenger traffic will have a positive effect, while increases in operating costs and interest rate levels relative to 2022 will detract.

Unacceptable delays

Unfortunately, several thousands of passengers have been inconvenienced by delays in their travels into and out of Copenhagen Airport during the past couple of weeks. The delays are due to staff shortages in the state-owned company Naviair, which is responsible for air traffic control in Denmark.

When Naviair reduces its capacity and is unable to handle the scheduled flights, it sets off a chain reaction of events that must be addressed. It causes delays and cancellations, disrupting many people’s travel plans.

“This is an extremely unsatisfactory situation, which has severe consequences for the passengers and airlines at Copenhagen Airport. It’s highly regrettable.  This is an untenable and completely unacceptable situation. I trust that Naviair and the air traffic controllers will resolve the situation as soon as possible,” says Woldbye.

You can download the announcement here.