Air Greenland lands a satisfactory annual result

Despite a significant drop in passenger numbers in the first half of 2021, Air Greenland managed to land a satisfactory annual result thanks to record demand and high capacity utilisation in the second half.

The beginning of 2021 looked bleak for Air Greenland, as public service flights across the Atlantic and tight restrictions in Greenland due to Covid-19 were still a reality, which was also reflected in the half-year result, which ended with a deficit of DKK 14.1 million. Nevertheless, the company ended the year with a profit of DKK 153.6 million before tax, which is DKK 121 million higher than the annual result for 2020.

Due to Covid-19, in 2020, the company’s management reduced the number of employees by 15% and adjusted the timetables to provide a sufficient service between Greenland and Denmark and domestically. The reduced capacity continued in the first half of 2021, while during the same period, it was necessary to increase fares on flights by an average of 6% due to the low capacity. During the second half of the year, capacity was gradually increased as travel restrictions were relaxed due to the roll-out of the vaccination programme in the country and Denmark in particular. In addition to presenting a negative PCR test, travellers had to present a Corona passport as proof of vaccination. This measure made travelling feel safer, and the desire to travel returned steadily.

The restrictive and cheaper Takuss ticket was put back on sale, along with a new low-cost ‘Fly n’ Sleep’ ticket product between Greenland and Denmark to further boost sales. Customers welcomed these initiatives, and, together with a pent-up travel demand both at home and abroad, Air Greenland experienced historically high demand - also in the autumn and winter months. The extraordinary level of activity in the second half of the year resulted in an increase in turnover of DKK 154 million compared to 2020, which was mainly generated by a high occupancy rate on the Atlantic route between Greenland and Denmark. Sales of tourism products increased by 33% in the fourth quarter, indicating that interest in Greenland as a destination is also growing outside the high season. 

The Group’s net revenue in 2021 increased by DKK 121.7 million, of which passenger revenue increased by DKK 119.2 million. Net revenue in 2021 is still DKK 146.4 million below net revenue in 2019. Income from charters decreased by DKK 124.3 million due to lower activity levels in the mineral exploration industry and the emergency preparedness agreements entered into with the Government of Greenland in 2020, where the agreements were continuously adjusted in 2021 concerning the maintained emergency preparedness.

The number of employees in the Group increased in line with the level of activity, but at the end of 2021, there were 5% fewer full-time employees due to the capacity adjustment in 2020. Staff costs were reduced by just over DKK 20 million in 2021. Therefore, the company has had to work intensively to find solutions and adapt operations to complete production. The need and effort for accessible customer service in the Group were high during and after Covid-19, moving from selling trips to changing or cancelling them and informing customers of travel restrictions to selling trips again in the second half of the year. Staff numbers are expected to increase in 2022 to meet demand, which currently looks set to be high.

Other external costs increased by DKK 45.9 million in the Group. This is due to increased activity, including the impact of the new service contracts and the Search and Rescue agreement with the Danish Ministry of Defence.

The annual result of DKK 153.6 million before tax will help future-proof the investments in modernising the aircraft fleet, which will strengthen Air Greenland for increased competition when the new runways come into use in 2024 and 2025, respectively. In recent years, Air Greenland has invested in a new transatlantic Airbus 330neo, which will be delivered by the end of 2022. The old Bell212 and S-61 helicopters have been phased out and replaced by the more modern H155 and H225 helicopters. The financing of these has been possible after the company secured DKK 1.16 billion from US investors in spring 2021 by issuing corporate bonds at attractive interest terms.

In 2022 and in the coming years, the Air Greenland Group will intensify sustainable tourism initiatives together with local tourism stakeholders. Work to reduce airfares on domestic and transatlantic flights is also a priority, challenged by the current sharp rise in fuel prices.

Air Greenland A/S will hold its Annual General Meeting on 11 May 2022.