FlyerTalker01565

Well, the market is the collective of everyone's view, to simplify things. Why should CPH sell lounge space to SK at a discount below whatever discount they already have if it doesn't increase CPH's overall utility?

If shops can pay higher rents, it's because people are willing to put their money there and not into the higher airfare associated with increased costs for operating a lounge.

In its purest form, you guys are arguing that someone should not get the chance to purchase a product they enjoy more than you would enjoy the extra lounge space (as measured in willingness to pay). I find that rather narcissist.

CPH-Flyer

Or does the airport see a potential financial benefit for them if they can have people waiting longer in a shopping center rather than providing a more efficient airport flow?

FlyerTalker01565

Unfortunately, you keep running into the same barrier of economics. I can't and you can't escape the fact that if wealth is maximized by the current setup, things are probably working as intended.

If having a place to sit down with free peanuts is of great importance, why not put some pressure on SK? The beauty of the market is that money works (even if that might be offensive to people used to this kind of hilarious economics).

CPH-Flyer

The airport is a monopoly to begin with, so your free market is already suspended.

Passengers don't have a choice of airports to exercise their side of the free market. Once we are in there, the airport can optimise their profits freely rather than anything else.

FlyerTalker01565

That's not quite how it works. That's like saying "oh, the IFE didn't work, so the plane couldn't fly". The airport space would be exactly the same, probably, with a free market for airports. Which we somewhat do have, mind you - you can go to MMX if you don't like CPH.

That's besides the point, as there's most certainly a free market operating within the space that is CPH. Nothing about CPH not having a competitor right on its doorstep matters in terms of competing for limited resources within CPH itself. And would pax go to that next door neighbor anyway? No, the allure of airports is also the network economics.

SK could simply pay more money to give you free peanuts more places in CPH. And they might, if those of you for whom this is important do something about it. It's much easier to ask for an umbrella than to complain about water being wet.

CPH-Flyer

If you ignore the full picture, there is indeed a free market within the space of the airport terminal. However, when someone tried to establish an alternative terminal within the confines of the current airport area, that was quickly squashed by CPH. But as I said, the free market works from a certain point of view.

I could indeed go to MMX, I would not be in Copenhagen, nor even in Denmark, though. And a routing from Tokyo to MMX would be surprisingly complex to achieve. Shortest connection would be via IST and ARN at 25 hours according to Google flights. So more than just airport free market comes in to play here.

The IFE example is just a smoke screen it has zero relevance to the discussion

FlyerTalker01565

So you agree we should stay on topic: GUWonder said the reason there's not more lounge space is because of a moral deficiency in the airport authority. I say that's not how things work - SK could pay more money to get more lounge space.

Do you agree SK could pay more money to get more lounge space?

CPH-Flyer

I never disputed that part, they can. I merely pointed out that the airport has a far higher earning potential from retail space and thus are more interested in retail space.

SK could of course, you argued, pay the same price as the retail earning potential. Which is hardly economically viable for them. Which, as you also argued, is the market at work. I claim that CPH is a monopoly and thus superceeds the market. And that is where we disagree! Is it free market dynamics or not?

GUWonder

The fact is that the above claim is wrong in its attempted characterization of my words. It's no mischaracterization to state this economic reality:

Whether greed is good or bad doesn't change the situation with a moral deficiency, but the attempt to insulate the CPH airport owner from criticism is apparently a moral effort. Who appoints the patron saint of CPH's greedy airport owner and the anti-competitive, anti-free market dynamics in play with an airport like this?

CPH airport is no paragon of a free, fully competitive marketplace for its customers, passengers or not. And even if the airport were, the following words still aren't rendered inapplicable:

"If the airport weren't so greedy for retail sales related revenue, perhaps they could convert some of that shopping mall space into another lounge or more comfortable seating area."

FlyerTalker01565

That's still a rudimentary understanding of market forces at best. Alas, I can explain it to you - I can't understand it for you. However, I fundamentally agree that the existence of a local monopoly is true in terms of airport v. airport (and it should've never been privatized - Danes are much better at owning our own infrastructure than Americans or Australians).

@CPH-Flyer: That just doesn't mean anything for the lounge space and the competition within the terminals. Finite resources (in this case space in the terminal) is a premise for all competition. What exactly would a non-monopoly look like? SK having a lounge in the competing airport in, say, Køge?

GUWonder

If retail sales revenue weren't so lucrative for the greedy airport owner, then the owner's opportunity cost for more and more comfortable seating at the airport wouldn't be so high as it is. And SK's costs for expanding lounge space at CPH (or even for Fast Track at CPH) would be lower, ceteris paribus, due to the market dynamics applicable to the airport owner.

CPH-Flyer

It is probably not possible to create a non monopoly situation for an airport, which is why it should not have been privatised to begin with. As you also point out, and I agree with.
However, the terminal A project could maybe have helped a bit in that direction. It was probably the closest we could get to a competitive situation for CPH.

The situation is the safeguarding of the pensions of Canadian teachers combined with monopolistic finite resources vs. the interests of travellers. The pensions are going to win in the long run.

An extra SK lounge may not be the best example of a change that the travelling public would want in the airport. Admittedly. But maybe the travelling public might want more space when walking from A to B, rather than being cramped in by retail. (literally A to B, not figuratively).

As a different example could you imagine having two security checks, a CPH one and a different operator one? Which ever one you chose would get the payment for the processing. That might squeeze CPH in to some improvements. Unfortunately, we can't have two parallel terminals in the same way.

GUWonder

KBHL still has the Danish government as a very large shareholder, even as it's not a majority shareholder. Given the cap table for the airport, the cap table for KBHL's majority shareholder and the public float, blaming Americans or Australians for the worst parts of the CPH airport experience just defies reason -- emotionally satisfying as the "blame the foreigners" card may be to some.

If the airport were not so hooked to retail revenue cash grabs, I would have a better passenger experience at the airport. The retail space use at CPH makes the place into more of a zoo in parts. Not that the airside zoo can always compare to the landslide zoo at CPH that is encountered when going from the Hilton CPH/Metro/trains to airline check-in counters.

FlyerTalker01565

Yes. So. More money = more lounge space. This is SK's problem, not CPH's problem.

GUWonder

SK's problem is a creature of CPH's making.

Less retail revenue at the airport for CPH => less money needed from SK to pay for more lounge space.

CPH's "problem" is not divorced from SK's "problem".

CPH management gets rewarded by its shareholders for being greedy.

The way CPH management gets more rewarded for being greedy comes via increased retail revenue for the airport.

If the CPH shopping mall flopped, then SK's costs for more lounge space would involve less money per square meter from SK than it currently does. That too would not make CPH management and its shareholders very happy.