Denmark’s third-largest airport, Aalborg, has turned a corner following the pandemic, moving back into the black as traffic surges
With over eight years of service at SAS on his CV, it is not surprising that Aalborg Airport CEO Niels Hemmingsen understands what airlines want from a regional airport.
His strategy since he was appointed CEO of Aalborg in November 2020, when the pandemic savaged all aviation enterprises, has been to couple his airline and business experience to return the airport to profitability, restore traffic and regain stability.
This has been no easy task as Aalborg, which is situated in northern Denmark in the Province of Jutland, must fight hard to gain attention from airlines that often think of Copenhagen first when looking at the Danish market. It is a challenge Denmark’s other main airports in Billund and Aarhus also face.
Gratifyingly, in 2023, Hemmingsen’s recovery strategy meant Aalborg turned the corner.
“I think what’s important is you can focus a lot on growth, which we do, and we have added a lot of routes, but we have been very much focused on getting back into positive numbers. That has been our biggest success,” said Hemmingsen. He could not give specific numbers as they have not been publicly announced, but he confirmed that Aalborg made a net profit in 2023.
Partnerships
To achieve this Hemmingsen has deployed a strategy that seeks to diversify Aalborg’s revenue streams and strike deals with carriers that promote growth and give the airport a decent return.
“You can get a lot of traffic, but you also must get traffic that is negotiated on reasonable terms,” he said. “I think the important thing is when we work with airlines up here in the north our focus is on creating partnerships.
“I am not looking for the short run, I am in for the long run. So basically, what we do with the airlines is to look at long-term agreements,” explained Hemmingsen.
His knowledge of airlines makes him fear their ability to remove capacity relatively easily. “My worst fear is if you’re too heavy with certain operators you risk that they come in and they leave in the short term or they switch to other priorities. This is one of the challenges for regional airports,” said Hemmingsen.
“That is why we spend most of our time trying to create these long-term partnerships,” he noted.
It is a strategy that is paying off with traffic growing by 4.8% in 2023 to 1.4 million passengers. That is just shy of its peak 2019 passenger record.
The plan to diversify revenue streams has seen Aalborg begin focusing on cargo, which was not a priority in the past, said Hemmingsen.
This area will develop further in 2024, and it is also hoped that an underused hangar at Aalborg could attract an aircraft maintenance provider to establish an operation. This would add to the two aircraft services providers working at the airport today.
“We have the facilities up here and are looking for someone more on the heavy aircraft maintenance side as we look at utilising our hangar in different ways,” said Hemmingsen.
Network development
Hemmingsen explained that Aalborg’s split between domestic and international traffic is 50:50. Its largest route is feeding the SAS hub in Copenhagen, which has up to 17 daily flights, while there are four daily services to Amsterdam feeding KLM.
Norwegian also has a substantial network out of Aalborg. It is one of the carriers serving routes to Spain; many Danes in Jutland own property in southern Spain, said Hemmingsen. Ryanair and Volotea are also present at Aalborg and there are significant charter operations too.
The financial restructuring with new owners at SAS is a topic of conversation for all Nordic airports as they wonder how it will impact their operations. “Everyone is looking into what the shift to the new ownership in SAS means, and also what their shift from Star Alliance to SkyTeam brings,” said Hemmingsen.
“One of the main questions is what it will mean in terms of hub concentration,” he noted, as Air France-KLM is one of the investors in SAS.
Airports expect more clarity during the first half of 2024 as the restructuring is put into place. For Hemmingsen, Aalborg already has strong co-operation with SAS, and he knows the carrier well.
“We have a good dialogue, and we have a lot of possibilities,” he stated.
In terms of new destinations, one of Hemmingsen’s big wishes is to add another hub to feed in addition to the traffic that flows from Aalborg to Amsterdam and Copenhagen. “I hope we can add more hubs in the future in terms of supporting even more business traffic and even leisure traffic in terms of connections to the wider world,” he explained.
Regional recovery
With Aalborg seeing strong growth in international traffic, which rose by 21% in 2023, Hemmingsen believes that regional airports are increasingly coming into airline growth plans, carriers having already restored their primary routes in the post-pandemic recovery phase.
“As a regional airport you are not top of the mind after a Covid-19 recovery plan,” said Hemmingsen. “But now we are seeing a second recovery phase where other point-to-point traffic possibilities are emerging. This is positive.”
New routes at Aalborg in 2023 included Alicante, Barcelona and Reykjavik, while this year Norwegian added Madeira in February and will launch Nice in June.
One interesting route that was inaugurated in 2023 was Aalborg to New York Newark, which SAS flew for the summer seeking to capture transatlantic business and leisure travellers using an
Airbus A321LR.
The route was not as successful as SAS hoped and is not on the schedule in 2024. “It has been a good test, and we have a lot of learnings from flying to New York,” said Hemmingsen, such as creating a product that can feed efficiently into the networks of the US majors. “Creating consumer awareness in the US is also something you cannot expect to happen overnight,” he noted.
“What remains is an achievement that created invaluable awareness of the region and the airport, which holds great value for the further development of new routes in collaboration with airlines,” said Hemmingsen.
So, what would a great 2024 look like for the former SAS man running Aalborg? “It would be basically even more routes to support the region and a big success would be if we would end up with an agreement or a plan for the next hub connection out of Aalborg,” said Hemmingsen.
He also has his sights set on an adventure in Greenland. “Hopefully this year we can finalise plans for connecting Aalborg with Greenland, in particular to the new airport in Nuuk,” said Hemmingsen. The new international airport for Greenland’s capital is expected to open by year-end.
“There are close connections [between Greenland and North Jutland] and there is also heavy cargo traffic between the regions,” said Hemmingsen. “It would be fantastic to open up maybe in summer 2025, but as we know, planning such services takes a lot of time”.
