Greenland’s aviation industry is undergoing a transformative period with the opening of Nuuk International Airport, enabling Air Greenland to expand its international network. Air Greenland CEO Jacob Nitter Sørensen discusses the carrier’s future.
Please also check out David Casey's recent feature on Air Greenland.
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Transcript
David Casey: Hello, everyone, and thank you for joining us for Window Seat, our Aviation Week transport podcast. I'm David Casey, editor-in-chief of Routes. Welcome aboard. For this week's episode, I'm delighted to be joined by Jacob Nitter Sørensen, the CEO of Air Greenland. Now, Greenland is the world's largest island and a land of breathtaking landscapes, vast ice sheets, and an incredibly sparse population spread across its remote and rugged terrain. For years, it's been notoriously difficult to visit, with limited international air connectivity to link its isolated communities to the rest of the world, but all that is starting to change.
With the recent opening of Nuuk International Airport featuring a 2,200-meter runway, the new gateway opens doors to larger aircraft and direct flights, making Greenland more accessible than ever before. Air Greenland has already responded by adding new routes, while international carriers are taking note as well. With United set to launch flights from New York to Nuuk in summer 2025, and SAS returning to Greenland in June after an absence of nearly two decades, this increased connectivity is expected to unlock significant opportunities for trade and tourism. And it comes at a time of increased focus on Greenland, after the new US President Donald Trump expressed a desire for the US to buy the nation from Denmark, bringing global focus to Greenland's unique geographical and geopolitical importance.
On today's episode, we'll be discussing the changing aviation and tourism landscape in Greenland, the challenges of operating in one of the world's most remote regions, and what the future holds for Air Greenland. So, Jacob, thank you so much for joining us today on Window Seat.
Well, it's fair to say that it hasn't been a quiet few months for Greenland. Aside from the geopolitics, the opening of the airport in Nuuk has been a significant milestone. For any of our listeners who are perhaps unfamiliar with the aviation market in Greenland and the landscape of the country, perhaps you could just start by explaining what it means for connectivity and for the wider economy.
Jacob Nitter Sø...: Yeah, thank you very much David, for having me here and giving me the opportunity to tell the world a little bit about our beautiful island here, Greenland. So the prior system or the infrastructure of Greenland, up until the opening of Nuuk Airport, had the main hub or the main entrance gate to Greenland was an airport called Kangerlussuaq, or known as Sondrestrom, a former US military base built during World War II.
It's a very weather-stable airport, but nobody really lives there. So basically, we would take our [Airbus] A330 aircraft into Kangerlussuaq, unload the 305 passengers, and then distribute from there on with the commuter aircraft, [De Havilland] Dash 8 aircraft, because all the runways in the cities of Greenland have been very, very short. And that system was basically overloaded and was a bottleneck for both passengers, for cargo, and for the growth. So with the new airport opening in Nuuk, a big percentage of the passengers can now go directly to their final destination, and that creates the potential for growth, basically.
David Casey: Fantastic. Has that changed, then, your operating model in terms of how you structure your network? Obviously, you have the primary hub now in Nuuk. Have you moved into more of a hub-and-spoke model there?
Jacob Nitter Sø...: Yes, definitely. We've been preparing for this for many years, and so we have completely restructured the whole network and the way that we operate. Because as I mentioned earlier on, we would have to balance both the domestic flights within Greenland with distributing the passengers from the international network. Now, we can concentrate more on having a stable international feed, and also that frees up capacity for the domestic network. So we can actually offer now a better international schedule and a better domestic schedule, so we've basically changed the whole operating model around.
David Casey: And in terms of that international network then, I think this summer you've got a few new routes to Denmark, Billund, and Aalborg. What are your plans for exploring new markets? Obviously, you sit within a pretty unique geographical position between Europe and North America. We've obviously seen Iceland use Reykjavik as a connecting hub with stopover programs and things like that. Is that anything that you are looking to do? Obviously, you've got a much smaller fleet, and it's not quite as advanced as what Icelandair has, but are you looking for a similar operating model?
Jacob Nitter Sø...: I don't think we'll see sort of the full-scale similar operating model, simply because the new airport in Nuuk cannot handle more than one big aircraft at a time, and the hub-and-spoke model requires the airport to be able to accommodate a lot of aircraft at the same time. So that's one thing.
But having said that, obviously, Greenland is in a very, very unique position right now with a lot of interests from around the world, high demand. And our sort of core business has always been to Denmark and Copenhagen, and that is what we're trying to expand now. The main constraints for growth right now is actually not the airport, it's the onshore capacity, meaning hotels and tourism infrastructure. So the way I see it is that now we have the airport, now that constraint has been removed, and now we can organically grow. And we are already seeing investments in more hotel capacity. More tourist operators are popping up and starting businesses, so I think we'll see an explosion now basically in Greenland, and that will accommodate more demand. And building upon that, we will be able to expand the network.
So, we're starting with sort of the core business, going to Copenhagen. We're expanding with partnerships with Icelandair, working to establish a partnership with United Airlines, who are coming in from New York, and with SAS as well. And once the onshore capacity can handle it, I think we'll see a basis for more routes opening. Obviously, London would be a target destination. Germany also would be a target destination. But right now, there are still some constraints, but the main constraints of the airport's capacity has been removed, and now we're basically in a growth position.
David Casey: So mainly focusing more on the European market first, before looking to the US, would you say?
Jacob Nitter Sø...: Yes. And again, as I mentioned, we have always been looking at the US as a very interesting market, but with the current onshore capacity situation, we have been afraid that we would end up in a cannibalization, where we basically couldn't grow the market so we’d just shift the market because of lack of hotel beds. But it's going to be interesting to see now, with United actually making the move coming in. What's that going to do to the marketplace?
David Casey: Obviously, that's one of the more quirky routes that United have announced this summer. There's quite a few other ones like that. But Newark to Nuuk, I think, starts in, is it May or June this year? How is Greenland going to respond to that added competition? Are you doing anything to change your operation or to maintain market share?
Jacob Nitter Sø...: Yeah. As I mentioned earlier, we've been planning for this for quite some time, and I think when you're looking at our international operations, we are very cost-effective. When we compare our unit cost to the competitors, we're definitely competitive. Of course, we don't have the sales and marketing strengths as the big boys do, and that's why we're seeking partnerships as well. But I think when you look at both our schedule, I think Air Greenland offers the best schedule of any airline flying to Greenland. Also, in terms of connectivity, so with our new schedule, you can basically do same-day connections to most of the European capitals, both to and from Greenland. No one else offers that. With our partnership with Icelandair, we also connect to the North American market, and we offer the domestic schedules in Greenland.
So, the way we're trying to be competitive is—obviously, you have to match the price,—by offering the best schedule, and also offering very, very good service. I think we have a very good product in Air Greenland, and we take care of the passengers all the way. Today, there's a blizzard in Greenland. We have hurricane winds. Everything is canceled. And we're used to this kind of situation and we take care of the passengers, make sure that they get a hotel, get a taxi, get food, get a rebooking, and make sure that they go to their final destination, and they don't have to really think about it and worry about it. And I think that's part of the value proposition that makes Air Greenland competitive, because it is a very difficult operating environment.
David Casey: Yeah. Clearly, you are used to those conditions and used to operating in that environment. In terms of that domestic connectivity on your route network, how do you balance being a commercial airline with also being an essential service provider? You obviously are a lifeline to many communities in Greenland. With that dual role, how do you prioritize routes or services that might not be commercially viable but are critical for that connectivity of Greenland?
Jacob Nitter Sø...: That's a very, very good question, and it's a very difficult balancing act. So the way the system in Greenland operates is that all the helicopter scheduled routes are on government contracts, because you cannot operate helicopter scheduled flights commercially viable. For the domestic network with the Dash 8s, it's a full commercial operation, and we are not getting subsidies or anything from the government. That is also reflected in the prices, so a lot of people have experienced that it's pretty expensive to fly domestically in Greenland. And that is simply because of this balancing act, that it is a commercial operation and it's not subsidized.
It's difficult to balance, because when we're facing the competition from many airlines this summer, basically what they're doing is cherry-picking. So, if we lose too much of our core traffic, then that balancing act, it doesn't work anymore. And we will have to look at some of those routes and say, "Well, now we can't operate them anymore." And we will have to look to the government for grants or subsidies.
But until now, we've managed to actually fund all of those routes based on our commercial operation, and that's why it's been a little bit more expensive, maybe, to fly on the international routes, because they are also funding the domestic routes. And obviously, we can't do that in a competitive situation because we have to match the prices. So, it's going to be really interesting to see this summer how that's all going to play out.
David Casey: In terms of your fleet, then, you mentioned earlier you've got the A330-800. You've also got a fleet of Dash 8s as well, as well as the helicopters, too. In terms of the Dash 8s, they're an aging fleet, and obviously, electric aircraft is on the horizon, but it's still probably years away. What are the plans for your fleet development? Are you looking to add more Dash 8s, perhaps, to the fleet? Are you also looking for more widebody capacity?
Jacob Nitter Sø...: Yeah, it's a very good question. So, within the last five years, we have completely transformed the fleet. We've renewed all aircraft except the Dash 8, so it's a very new fleet, both on the helicopter side and on the fixed-wing side with a new A330neo. But for the Dash 8, as I mentioned earlier, the runways in Greenland are some of the shortest in the world, and we're operating them on winter runways. So right now, the Dash 8 is the only aircraft that can operate in and out of these runways, unless you're looking at much smaller aircraft, which don't have the range and the all-weather capabilities that we need. So right now, there is no replacement aircraft for the Dash 8 because ATR, they decided to cancel the ATR 42-600 STOL model. So right now, there is no replacement possible.
So, two things when we're talking Dash 8s. One is that with the new airport opening in Nuuk and later on in Ilulissat, that frees up Dash 8 capacity. So, that means that we'll be able to keep our current fleet going for longer. Also, we do long sectors, and the Dash 8 is limited on cycles. So we don't put many cycles on the aircraft as many of the other Dash 8 operators do. So cycle-wise, we can operate for many, many years. The other thing is that we're working with the government for a plan to extend the existing runways in Greenland, because that is the only way that we're going to, in time, be able to replace the Dash 8. So, that's the strategy for that part of the operation.
And for the international route, what we're doing is—of course we have the backbone of the A330 flying back and forth, and then we are using ACMI operators to build the other routes. And we have now reached a level where it makes sense to add another aircraft. So we're looking at adding a narrowbody aircraft, A320neo, to the fleet.
And basically, that's the game plan, to keep building up new routes based on ACMI. And then, when it reaches sort of a sustainable level, then we add another aircraft. Because we are a very small company, so we have to take it in small steps. But that's how we're doing it right now. So we're looking at adding an A320, which can be flown mixed-rating flying. The pilots and the cabin crew can operate both the 330 and 320 on the same license, which makes it a flexible platform for us.
David Casey: Do you expect to have the A320 for the forthcoming summer season?
Jacob Nitter Sø...: No. We're expecting to get it in late 2026, because then we can dispatch it when the airport in Ilulissat opens. And then, we'll have flexibility. We can switch between the 330 and the 320, because when we add frequencies with the 330, it's quite a lot. It's a big aircraft, 305 passengers. So that will also enable us to be more flexible in the way we make the schedule.
David Casey: In terms of then thinking about the tourism aspect, we've talked about increased capacity that's going to be coming into Greenland, particularly this summer, as you said with some of your new routes and United and SAS as well. Now I know Air Greenland is more than an airline. Your portfolio includes a tour operator business and a hotel. What's the plan for these in the next few years, particularly as Greenland becomes more accessible to tourists?
Jacob Nitter Sø...: Yeah. It's again a very good question and a relevant question. We need more hotels in Greenland. That's the short answer. And Air Greenland is also looking at expanding within the tourism sector. We are a fully integrated value chain company, as you mentioned, and we have been operating hotels and lodges for many years.
Our current situation is that with the increase in good prices on building material, we have made a lot of investments around the new airports in new hangar facilities, handling equipment, cargo facilities, [which] we have to prioritize as well. We cannot just build a number of hotels, because as I mentioned earlier, we're a small company. So, there is a limit to how much we can do, but we are looking at increasing the hotel capacity as well from the Air Greenland side, and we're hoping that other private investors will also get into the hotel business and start adding capacity. And I think we'll see that as soon as the airport in Ilulissat opens. We're already seeing it in Nuuk with a lot of projects in the pipeline. So, I'm pretty confident that even if Air Greenland cannot sort of take the whole expansion within the hotel business, there are a lot of investors right now who are working on projects, and that's positive.
David Casey: And what has been the reaction then from people within Greenland? Obviously, it's a relatively small, well, very small nation. I think it's 56,000-57,000 people live in Greenland. You're preparing for an increase in tourists. It's a very unspoiled beautiful country. How much does sustainability play into that? Are people worried about the potential challenges that increased tourism could bring?
Jacob Nitter Sø...: Yeah. The sustainability aspect of the tourism in Greenland is high on the agenda, and it's something that I think everyone in Greenland is very serious about. And it's actually reflected in the new Tourism Act that has just been passed by our Parliament, where they have introduced sort of a zonal system that defines where cruise ships can go and where they can't go. There's a lot of investment in micro-infrastructure like pathways and things like that so you don't ruin and shut down the nature. And everyone here is very conscious about not becoming a mass tourist destination, because, well, both the nature and the ecology here is very fragile. But the society is fragile as well, being so few people and the communities are very small. So, socially and culturally, we're also a fragile island country, so it's something that's very high on the agenda, definitely.
David Casey: And as we said at the start of the podcast, Greenland's garnered a lot of global attention in recent weeks after Donald's Trump's comments that he suggested that the US wanted to acquire the country from Denmark. Politics aside, has this attention impacted Greenland's aviation or tourism sectors in any way? Are you seeing increased demand perhaps or increased interest from potential passengers?
Jacob Nitter Sø...: Well, I think our national tourism organizations are seeing more visitors to the website. It's too early to say if that converts into a ticket spot. We're not seeing that at the moment. But I would say there's an old saying that there's no such thing as bad publicity, and I'm just thinking that, well, more people know about Greenland and are interested in Greenland now than they were two weeks ago. And I think that is something that must be a positive for Greenland.
Obviously, there is a little bit concern around the investor environment when there is this uncertainty. What is it really that the US wants? So obviously, you're very anxious or we're looking to see what's going to happen in the next few weeks and what is the real sort of interest and agenda here. But overall, I think it's a positive that the attention puts Greenland even more on the map, and we should be able to convert that into some sort of growth.
David Casey: Looking then five to 10 years down the line, what is your vision for Air Greenland and Greenland's aviation sector as a whole? How do you see it growing?
Jacob Nitter Sø...: I think that if we're looking down the line 10 years from now, we have increased. We have grown to a level where we have the necessary critical mass to sustain the whole aviation sector in Greenland. Air Greenland is obviously not the only operator going to Greenland, but we are still the critical infrastructure of Greenland. But we are able to utilize our network to make money for the country and keep being the biggest educational institution in Greenland so we can train our local Greenlanders to high standards and basically be an important pillar of the economy. Also, making sure that all tourism, the whole tourism sector in Greenland can prosper and that we basically have a schedule where you can go directly, obviously from Copenhagen still, but also we have hopefully one or two routes going into Europe and hopefully also to North America, being it seasonal or not. I don't know if you can hear, but that's the wind outside and the ice bashing the windows. Sorry about that.
David Casey: Well, Jacob, I will let you get back to the challenges of running an airline in such a hostile environment. I just want to say thanks for your time today. It's been fascinating to hear about your operations and where you see the sector in Greenland going. So, thanks for joining us today. Thank you also for our listeners for tuning in, and thanks to our producer, Cory Hitt. If you enjoyed this episode, don't forget to like, subscribe, and share. Until next time, this is David Casey disembarking from Window Seat.