SAS Brings Return of Newcastle’s Copenhagen Link

SAS Scandinavian Airlines is to relaunch service between Copenhagen and Newcastle from February 4, 2013, marking the return of scheduled services on the route following an eleven month closure. The carrier will operate an evening rotation every weekday using a 50-seat Bombardier CRJ200 wet-leased from its regional partner Cimber Sterling, renewing the strong links between these two Danish airlines and the airport in North East England.

The Scandinavian flag carrier has served this route on two separate occasions over the past 20 years. It entered the market in March 1996, ten years after Air UK had last served the route, and offered a twice daily Fokker 50 service. This only operated for a year before Cimber Air took over responsibility for the route from March 1997, when a third weekday rotation was also introduced. In April 1998 Gill Air took over the link in partnership with Muk Air using smaller Embraer EMB-120 Brasilia and Saab 340 turboprops but flights lasted four months.

It was then British Airways’ turn to try to make the route work: the airline introduced flights in May 1999 using a 50-seat Bombardier Dash 8 and successfully operated the route for a two year period until May 2011. There was then a 30-month hiatus before easyJet introduced daily low-cost flights in December 2003, while from November 2004 SAS made its return to the market in partnership with Cimber Air using a CRJ200, just a month before easyJet pulled off the route.

SAS and Cimber Air continued to jointly operate between Copenhagen and Newcastle through to September 2006, but in March 2007 Cimber Air returned, flying under its own name and from February 2008 under its revised Cimber Sterling brand, until services were suspended in March 2011. In the table below we highlight changes in capacity and the O&D demand on the route over the past five years.

Alongside the point-to-point demand, SAS says the scheduling of the flight will offer convenient onward connections to destinations across Scandinavia as well as the Nordic and Baltic regions. These include domestic Danish flights to Aalborg, Aarhus and Billund; Helsinki and Turku in Finland; Gothenburg and Stockholm in Sweden; Bergen and Oslo in Norway; Gdansk, Poznan, Warsaw and Wroclaw in Poland; Palanga in Lithuania and Moscow in Russia.

This network growth follows less than a week after it was revealed by Newcastle International Airport that global investment manager AMP Capital had been selected as its new business partner after Copenhagen Airports agreed to sell its 49% shareholding in the facility’s parent company NIAL Group Ltd. (NIAL). Alongside this deal, NIAL has also refinanced its existing group facility and secured new debt funding from its majority shareholders and AMP Capital. The airport is majority controlled by LA7, a group seven North East local authorities - South Tyneside, Newcastle, Sunderland, Gateshead, Northumberland, Durham and North Tyneside.

Under the refinancing transaction, six of the LA7 authorities (excludes North Tyneside) will invest a further £68 million in the airport while additional funding is now being provided by a collective of five banks, comprising Royal Bank of Scotland, Royal Bank of Canada, Barclays Bank, HSH Nord Bank and National Australia Bank. This new funding facility will support the growth plans of the airport, while by significantly reducing the level of debt in the business, will also reduce interest payments.

“AMP Capital submitted an exceptional proposal. We’re delighted to have them on board and look forward to working with them to maximise the potential of the Airport,” said Councillor Iain Malcolm, Leader of South Tyneside Council and Chairman of LA7. “The completion of the refinancing is also great news for the region.”

“The Airport is a major asset to the North East, generating millions of pounds for the local economy every year and supporting thousands of jobs. As a result we viewed the further investment by the local authorities as the right thing to do, not just for the Airport, but for the whole region,” he added.

AMP Capital has long-standing experience investing in airports with its first involvement taking place in 1997 when it invested in Melbourne Airport. It is a respected global infrastructure manager with experience in Australia, New Zealand, Asia, the United States and Europe and also holds an interest in Launceston Airport in Australia.