Air Greenland is well positioned for the future despite a turbulent 2022
Air Greenland delivers an annual result of DKK 58.6 million after tax in 2022. The result is satisfactory, especially considering that the airline has incurred expenses corresponding to approximately DKK 100 million in connection with cancellations and changes to flights during the year.
Air Greenland had a record-high turnover of almost DKK 1.5 billion in 2022, reflecting a sometimes hectic year with high activity.
The beginning of 2022 was characterized by Covid-19, with a strong spread of infection in society and thus low activity in the first months of the year. Nevertheless, the number of completed flights increased from just under 33,000 to 34,600, and the number of passengers almost reached the same level as in 2019 - the year before Covid-19 broke out.
"We had significantly fewer passengers in January and February, but overall, throughout the year, we had our aircraft in the air more and with more passengers than in the previous two years," says chairwoman Bodil Marie Damgaard, who at the same time does not hesitate to call 2022 an operationally extremely difficult year for Air Greenland.
“First of all, because of bad weather, which caused an extraordinary number of delays and cancellations, and secondly, because it was more difficult to obtain spare parts from Europe due to the aftermath of Covid 19 and the war in Ukraine. This affected in particular the technical regularity of the Dash 8 aircraft and the phasing-in of our H155 helicopters. These external factors, combined with a very large number of passengers, caused great inconvenience to customers, and put a lot of pressure on the entire organization. I am impressed by the many dedicated employees that Air Greenland has, who once again proved that even under really challenging conditions they managed to take care of the passengers. They have made a fantastic effort,” says Bodil Marie Damgaard.
In the event of cancelled flights due to weather, Air Greenland offers to accommodate passengers at the company's expense, even though it is not legally obliged to do so, nor is it the industry standard in the rest of the world.
“The cost of securing all customers in the event of cancellations and delays in 2022 was approximately DKK 100 million. It is a conscious choice to protect our customers throughout their journey. Both because it is of great importance to the individual traveler, but also because it is a way in which Air Greenland can help to take social responsibility, secure the individual passenger throughout the journey and ensure a well-functioning and coherent aviation infrastructure, she says.
2022 was a year where both a very rapid recovery from Covid-19 and extraordinary operational challenges put a lot of pressure on both Air Greenland and customers.
“Customers came back faster than expected while at the same time our capricious weather chose to make it difficult to operate aviation. On the positive side, we saw not only recovery, but progress in tourism with record numbers of tourists. This is good for society, but at the same time puts pressure on accommodation capacity when extra beds have to be found for stranded passengers,” says CEO Jacob Nitter Sørensen.
"The fact that we are now back on track, both in terms of employees and number of travelers, is healthy and gratifying for both us and Greenland. We can say with certainty that air traffic has recovered after Covid-19, and we have had a year with a positive increase in demand, he says.
The increase in demand has been particularly noticeable in the shoulder seasons, which is attributed to more tourists choosing to travel outside the peak season. The number of air passengers increased by 34% from 309,000 passengers in 2021 to 416,000 passengers in 2022.
“This is a positive development that emphasizes that Greenland is a destination that more people want to visit. The Air Greenland Group has invested in the value chain within the tourism segment to create "reason to go" products. Our subsidiaries have ensured this,” says Jacob Nitter Sørensen and mentions a few examples.
“In 2022, we facilitated the opening of the Michelin restaurant KOKS in Ilimanaq, where our subsidiary World of Greenland operates a lodge town, so-called lodges. Then we have launched the online platform "Arctic Excursions", which allows local tourism operators to promote their products to tourists as locals. An initiative that will help to improve the local offer and thus give travelers more opportunities to put together their experiences. These initiatives are also part of the capacity building that the country needs to develop the tourism sector,” the director points out.
Expanding the fleet
The year 2022 is a year that employees in particular will not soon forget. Not only because of the unusual irregularity of the year, but especially because Air Greenland's new flagship Tuukkaq came home to Greenland.
” The 2018 fleet strategy is now nearing completion. We put the biggest investment ever, a brand new Airbus 330neo, into service in December. In addition, five out of the seven H155 helicopters were phased in, which has not been an easy process. But we are confident that the helicopter will stand the test of time once modifications, training of technicians and pilots are finalized," he says.
In 2022, the board decided to purchase an additional Dash-8 aircraft to standby in case of technical issues, which will be deployed in May 2023, and the purchase of nine H125 helicopters to replace the AS350 helicopter type. These will be phased in from autumn into 2024.
”Despite the turbulent year, the Board of Directors is satisfied with the year's profit of DKK 58.6 million after tax. It is important that Air Greenland is well equipped as a group - also after 2022. We have local roots throughout the country and a strong focus on both opportunities and the development in tourism that we are part of.”
Air Greenland A/S will hold its Annual General Meeting on 12 May 2023.
FACTS: Highlights of the year
- COVID-19 caused low demand until March.
- The year was characterized by unusually unstable weather and a major shortage of flight spares.
- In May, Air Greenland received the international "European Editor's Deal of the year" award for the loan agreement in connection with the renewal of the aircraft fleet.
- Air Greenland signed a purchase agreement with Airbus Helicopters for the purchase of nine H125 helicopters.
- The phasing-in of the new H155 helicopters was almost completed.
- The Faroese internationally recognized Michelin restaurant KOKS opened in Ilimanaq.
- An opening ceremony was held in Air Greenland's hangar for the more than 400 participants at the travel fair Vestnorden.
- The partnership agreement with Visit Greenland was extended by three years.
- Air Greenland launched a new route from Billund to Kangerlussuaq.
- Air Greenland signed a main sponsorship agreement with the Greenland Sports Federation and entered into a new three-year main sponsorship agreement with Nunatta Isiginnaartitsisarfia - The National Theatre of Greenland.
- Five new collective agreements were signed with four labour unions.
- The Greenland Travel Agency received an award as Denmark's most recommended company by Relationwise.
- The Arctic Excursions portal was launched.
- Tuukkaq was put into operation.