In a year of rising costs, Air Greenland generates passenger growth and increased revenue, and thus the Air Greenland Group delivers a satisfactory result for 2023. Several initiatives to create stable operations have had a positive effect, while climate change continues to challenge flight operations. Air Greenland is preparing for the commissioning of new runways and the investments these will entail in the future

Air Greenland Group Chair of the Board Bodil Marie Damgaard and CEO Jacob Nitter Sørensen presented the annual results at the upcoming Annual General Meeting on 13 May 2024, but unveiled the key developments underlying the results.

“The Air Greenland Group's annual result for 2023 totalled DKK 84.5 million before tax, which is DKK 8 million better than the previous year in 2022, but lower than we expected for the year. Overall, net revenue has increased to almost DKK 1,777 million and has developed as planned, but it is particularly noteworthy that the revenue comes from the increase in passengers from 416,000 in 2022 to 459,000 in 2023”, says Bodil Marie Damgaard.

Other revenue in the areas of freight, mail and charter has remained stable along with revenue from the service contracts with the Government of Denmark, which ensures public transport in parts of the country all year round. The rising costs in 2023 have been under control and reflect higher activity levels and especially increased fuel prices. The cost of board and lodging for cancellations is still a high-cost item in 2023, reaching DKK 80 million in 2023.

“Most of the cancellations are due to the erratic weather at home in Greenland, which we can begin to attribute to climate change. The icing of the fjords, the movement of the big ice, fog, storm systems that come more often affect flight operations, and we must cancel more flights than before,” says Bodil Marie Damgaard, and emphasises that cancellations affect customers' time.

In 2022, the cost of board and lodging for customers due to cancellations was DKK 100 million, which was unusually high. This also included some cancellations due to a lack of spare parts for planes and helicopters, which created longer waiting times, which was not nearly as pronounced in 2023.

"To create a more stable operation, we acquired an extra Dash-8 aircraft, which was put into operation in June 2023. This has alleviated the bottlenecks we had previously, as we can pick up stranded passengers faster after a cancellation," says Jacob Nitter Sørensen and highlights the good cooperation with Greenland Airports, Mittarfeqarfiit.

 "It is important to emphasise that we have been able to extend the opening hours at the airports and this requires good dialogue with our partners, especially Mittarfeqarfiit.

The stable operations initiative has also contributed to increased employee satisfaction at Air Greenland in 2023, as increased production and cancellations put pressure on the organisation. This pleases Bodil Marie Damgaard, who has sat at the board table since 2016 and the last four years as chairwoman.

"As we also learnt in 2022, it was important to have more employees for the increased production - and especially during irregularities in flight operations.  Therefore, it was a great pleasure that the response rate in the annual employee satisfaction survey reached 85 per cent, because we could see positive signs of improvement, which can also be attributed to the stable operations initiative," she says.

The survey showed that job satisfaction increased significantly by 8 per cent in 2023, as did loyalty to the workplace, which increased by 6 per cent. The number of full-time employees in Air Greenland totalled 561 in 2023.

The CEO agrees with her observation.

"I know that our employees are resilient, and we need to ensure that we are good for each other, employer and employee, because we need each other in the future we are heading towards," says Jacob Nitter Sørensen.

It has now been announced that the 2,200-metre runway in Nuuk will be put into operation on 28 November 2024, which will significantly change the infrastructure in many areas. Air Greenland's station in Kangerlussuaq will be closed and the route network will be changed to Nuuk as the traffic hub, which over time will be combined with the upcoming new runways in Ilulissat and Qaqortoq.

Air Greenland has built staff housing in Nuuk to accommodate the relocation of employees, where most employees will be based in Nuuk, while some will move to Ilulissat when the runway opens. The construction of staff housing, expansion of the cargo terminal in Nuuk, construction of hangars in Ilulissat and Qaqortoq, new handling equipment, etc. are also important in this year's results and in the coming years as well, Bodil Marie Damgaard elaborates.

"When we look at cash and cash equivalents, they have decreased by 48 per cent to DKK 204.7 million, which is due to the continued fleet renewal and capital investments totalling DKK 349 million. "Therefore, in 2024, we have expanded the borrowing limit by DKK 275 million, which will both cover capital investments in 2024 and strengthen the group going forward," she points out.

The Group's balance sheet continues to grow, but there is a solvency of 33 per cent, which is a strengthening compared to previous years.

"The equity of DKK 747.0 million is now back at the same level as before the change of ownership in 2019, when the Air Greenland Group became 100 per cent owned by the Government of Greenland. At that time, DKK 461 million was paid out in dividends to finance the purchase of the shares from SAS and the Danish State, Bodil Marie Damgaard adds. 

The chairwoman of the board wants the Air Greenland Group to stand strong in a future competitive situation but points out that there will be a natural change in the traffic structure.

"Most routes are operated on a commercial basis and one route in particular will lack earnings from after 28 November 2024. November 2024, namely the route between Kangerlussuaq and Nuuk. Production on this route will be discontinued, but in return, international travellers with destinations from Sisimiut and northwards will travel further, and therefore the total Dash 8 production is expected to be almost the same, but without the revenue from Kangerlussuaq - Nuuk. This will apply until the new airport in Ilulissat opens", says Bodil Marie Damgaard.

Jacob Nitter Sørensen points out the measures that have been taken to strengthen Air Greenland in near future.

"We are doing what we can to keep unit costs down, which, incidentally, have developed in line with inflation in 2023. We have taken steps to improve earnings and utilisation of the cabin factor, among other things by offering more of the restrictive and thus cheaper ticket types, Fly n' Sleep, Takuss' and Ilik for sports, culture and school classes," he mentions and continues.

"But we will be taking more initiatives to better utilise flight capacity, and the investments that have been and will be made will benefit the competitive situation going forward," says Jacob Nitter Sørensen.

"More people are looking at what is being done to mitigate climate change and enhance biodiversity. We can already proudly mention the investment to reduce CO2 emissions from our flights, the new A330neo Tuukkaq aircraft and its fuel-efficient engines. In 2023, total CO2 emissions from flying decreased by 3,102 tonnes compared to the previous year, despite the fleet having more flight hours in the air."

The displacement of CO2 emissions due to Air Greenland's purchase agreement for 5 per cent bio-based aviation fuel, Sustainable Aviation Fuel, in 2023 is not included in the CO2 accounts. However, the purchase agreement was the direct cause of the introduction of bio-based aviation fuel in the aviation fuel infrastructure at Copenhagen Airport.

"It has been particularly noticed abroad that the 'small airline in the Arctic' took the lead and purchased the largest amount of SAF proportionally and thus made it available at Denmark's largest airport. We can be proud of that," says Bodil Marie Damgaard.

When asked about the highlights of 2023, both agree that it was when Tuukkaq's predecessor, the A330-200 Norsaq, flew over Nuuk on 10 March, which both mentioned as a very special experience. But it flew its last commercial flight on 16 February 2023 after just over 20 years as an Atlantic aircraft on the route between Greenland and Denmark. The B212 helicopter also stands out as a memory, as the last B212 helicopter arrived in Nuuk on 27 April after 42 years of service. 

"How time flies! Considering everything that has happened over the past few years, I have no doubt that the Air Greenland Group will do its best to be ready when the competition arises. But at the same time, we constantly remind everyone that the investments and initiatives we make benefit society in the end," says Jacob Nitter Sørensen.

"The Air Greenland Group is rooted in Greenland and is building competences and capacity that will contribute to sustainable development, both socially and economically.  Therefore, it is important to remember that when choosing whether you want to fly to and from abroad in the future on a red, yellow, green or blue aircraft, that if you choose Air Greenland, the money will circulate in this country and help - not only to create growth, but to build competences and not least cohesion throughout the country, says Bodil Marie Damgaard, chairwoman of the board, in conclusion.