CPH plans to cut back operations and postpone projects & investments
Copenhagen Airport (CPH) is reportedly planning to cut back operations in the upcoming period, due to the ongoing health crisis caused by the coronavirus outbreak. The company will also put several large and small projects as well as investment plans on hold.
CPH airport is known for effectively serving Copenhagen, whole region of Zealand and Oresund, as well as a large part of Southern Sweden. However, it has been facing adverse impacts, such as reduced traffic of several airlines including SAS, which are traveling in and out of the airport. Passenger traffic has already reduced to around 70%, with the possibility of further reduction over the next few days.
Due to a sharp drop in operations, the airport is reportedly planning to temporarily send home nearly 1,500 out of the total 2,600 employees, over the next few weeks. To fulfill the minimum operation target, it has discussed possible measures with the union representatives. For this initiative, the airport is planning to use the wage compensation package offered by the Danish government and labor market parties for the employees that will potentially be sent home. These initiatives will lead to CAPEX savings in CPH’s 400-700 million Danish Kroner investments for the remainder of the year.
According to Thomas Woldbye, Copenhagen Airport’s CEO, in an attempt to manage the unusual and grave crisis that is currently being faced by the airport, it will adopt the wage compensation scheme. This will help navigate the entire situation with a view of avoiding long-term negative impact, which, in turn, would effectively reduce redundancies and stabilize the situation.
Sources familiar with the matter have identified CPH’s potential savings in current operating costs of approximately 250-350 million Danish Kroner in the remainder of the year, including consulting services, external contracts, marketing, as well as reduced staff costs, without counting the wage compensation scheme’s effects.
However, due to uncertainty and rising coronavirus concerns, a realistic assessment of the financial impact cannot be offered by the airport, including profit before tax, revenue and total investments.
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