Tuesday, September 23, 2014

Macedonia’s low cost boom coming to an end?

New national carrier could affect low cost travel in Macedonia

Skopje Alexander the Great Airport is heading for an all time passenger high this year, with low cost airlines fuelling the growth. It comes two years after the Macedonian government first offered subsidies to budget carriers as an incentive to launch flights to the country. However, as the government prepares to set up a new national carrier together with a foreign partner, questions have been raised whether these subsidies will be on offer to the likes of Wizz Air and Flydubai next year. In 2012, the state forked out 1.4 million euros for low fare carriers to set up services to and from Skopje, a move which proved successful as Wizz Air opened a base in the Macedonian capital shortly after and is now the country’s busiest airline. This year the government upped the stakes, offering 4.9 million euros in subsidies. Airlines have been offered a one-off 40.000 euro cash injection for each new route launched for the first six destinations. Each subsequent route launch receives an additional 30.000 euro subsidy from the government. The new subsidy scheme also rewards each carrier for the number of passenger they carry.

In 2013, low cost airlines handled 440.127 passengers to and from Skopje Airport, a massive increase of 240% compared to the year before. Of those, Wizz Air carried 358.003 passengers, followed by Pegasus Airlines with 57.075 and Flydubai with a further 25.049 travellers. In comparison, 481.809 passengers used the services of full fare carriers, with Turkish Airlines the most popular. However, experts believe it is unlikely the government will be able to keep subsidising cheap flights to the same extent while at the same time managing a flag carrier. “A national airline would bring benefits such as employment, GDP growth and new destinations which would improve ties. Establishing a national airline would cost less than the subsidies currently provided to Wizz Air”, former CEO of Macedonia’s first national airline, Palair, Vanja Bitoljanu, says.

Despite the exceptional growth, spearheaded by low cost airlines, TAV, which manages Macedonia’s two international airports, warns the boom could come to an end if a national airline is not established. “TAV wants to compete with airports in neighbouring countries and attract foreign airlines. If you do not have a national carrier, then you miss out on the opportunity to attract airlines from other countries. This is because of commitments outlined in bilateral agreements. We are trying to attract foreign airlines to Macedonia and establish a national carrier, otherwise air traffic in the country will stall”, TAV said in a recent statement. Istanbul is currently the most popular destination out of Skopje, followed by Vienna, Zurich, London, Basel and Malmo, with the latter three all served by Wizz Air.

39 comments:

  1. Can someone give me an example of another country where the government directly gives subsidies to low-cost airlines? I have heard of airports giving subsidies but never it being a government policy.

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    Replies
    1. Istria Region does the same for Ryan.

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    2. Riga airport, Brussels second Airport, Cherloai or something rather, Verona in Italy, Florence, 2nd Milan airport, Krakow Airport, Katowice Airport...
      Endless list of airports in the EU, all subsidies illegally Ryan Air or some other airline, Budapest Airport might be at it as well.

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    3. sorry my bad, jut re read your question, no Government gives subsidies, local airports and authorities do.

      Delete
  2. Of course. . Romania (wizz), Croatia (Ryanair), Spain (Ryanair)... etc.etc...

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    1. The Croatian government gives Ryanair subsidies? I don't think so. It's local authorities and airports.

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    2. Yrah but aren't they getting money from the Croatian government as in from the national budget?

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    3. No, just from local authorities (Zadar Tourist Board and the city of Zadar).

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    4. 50% if Zadar Tourist Board and local tourist boards (city of Biograd, Zadar, Nin, Pag...)

      50% is Croatian tourist Board (but it is not money from taxes because Croatian tourist Board is finances from tourist fee, not from budget of Republic of Croatia)

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    5. What i meant was that the Zadar Tourist Board gets its funding from the Croatian budget, no? So they have to justify these expenses.

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    6. NO!

      Tourist board are financed from hotel fee (paid by every toursit wile lodged), membership fee (hotels, travel agencies etc.) and their own income (whan they sell tourist products, have some rights, provision, action where other subjects are participaing like marketing, tourist fairs etc.).

      Tourist boards are not financed from Croatian budget.

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    7. Just because they're financed through a para-fiscal tax doesn't mean it doesn't come from the budget. It's just another form of taxation, which is the same thing in the end as a budget transfer.

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    8. It is like that in all world. Tax is something that tourist is paid to hotel, and than hotel to tourist board for perpos of promotion tourisam.

      If you say that this is same as budget than passenger tax for airliners are also parafical tax same as budget. And of courese it is not. First state does not have control on that money, second it can not be used for something else (hospitals, schools etc.), third bodey that control money is totaly independent from state (espetialy on local level). What more if one party rule in national level local tourist board is usualy against it espetialy if local another party is on power, and usualy is.

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  3. Could this be the reason why Wizz Air is opnening up Nis? The government probably told them that they won't be getting any money next year.

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    1. Pretty much. If Niš plays it right, they could get Wizz to relocate there and act as their base.

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    2. Grohotom se smijem :)

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    3. And you think they won't get money if they move to Nis? C'mon! :-D

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    4. Претпостављам да си се исто тако смејао када су најавили да Етихад намерава да купи Јат Ервејз.

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    5. Јефтин покушај замене теза.

      Нема везе, бусај се и даље у груди, шта би друго. Није Виз Ер "дођем ти" компанија, а Нишки аеродром је још увек далеко од задовољавајуће оперативног. Један од нас двојице уствари ради за добробит Српске и остале ексЈу авијације, ал ће ти можда требати мало времена да искапираш ко је то.

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    6. Супер, док радиш на томе, што не издвојиш мало времена да научиш правопис српског језика?

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    7. Иди се покриј ушима..

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  4. Well as the article says they probably won't be getting the same amount of money but they will probably continue some form of subsidies. From what I understand, Macedonia wanted to attract Easy Jet with these new subsidies earlier this year but now they have decided to make an airline. I'm still very skeptical about that whole project but I wish them luck.

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  5. i think the majority of the Wizz routes out of SKP will work well without subsidies (its mostly VFR routes,and the planes are full)

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    Replies
    1. +1

      potvrda iz centrale..

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    2. I think so too, maybe some of the newer routes would end but the most popular would remain as listed in the article.

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  6. ot!
    Vrlo jeftino u New York iz Beograda 51385 dinara/435 €!! bit.ly/1tVXI4s

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  7. I really don't think Wizzair will leave Macedonia, almost every route has a LF of around 85-90% even during the low season...
    Today Wizzair took of from Skopje to Stockholm Skavsta with 170 passengers, not bad!

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  8. It seem Air Serbia's flight JU 552 to Ataturk is having a technical malfunction- it has been circling for a long time now and it's squawk is 7222.

    Anyone got more info?

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    1. From what i can see they are not the only ones circling. A number of other flights is also circling around them. Maybe something at IST happened since a lot of flights has been delayed and has circled around...

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    2. But the thing is that they are the only ones with that squawk 7000. Maybe they are running low on fuel?

      DBV diverted to TGD, what's up with that?

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    3. Thats, also what kinda confused me, but i believe that there was a one more THY flight with squawk 74xx. I did a brief search on squawk codes and only 7700,7600 and 7500 are the ones indicating a major emergency. Anyway someone with more knowledge can probably tell us more about specific squawk code meanings. Important thing is they landed safely.

      Cheers

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    4. Oh... this afternoon wave will not be funny. Three A319 are going to be late, Tirana, Dubrovnik and Istanbul. Hope for the best.

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  9. Any idea what happend with the Zagreb web-cam?

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  10. How is airSerbia and Alitalia doing in Skopje?

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  11. First of all although the government is pushing this project it needs a lot of time to develop. There aren't trained pilots and crews for Boeing NG or Airbus 319/320 in the country.
    Second you need time for marketing and promotion which takes a lot of time in the aviation before taking to the skies.
    It is very difficult to set up code share agreements for start-up airlines even if the government or TK (still only speculation) is backing up. So you don't use the advantages in the beginning even if you land on LHR or CDG because you aren't able to offer competitive connections with partners.
    Fourth, Wizz Air is very popular among young people and disapora in Macedonia which means they have really created a brand here. This gives them a big advantage. Unlike in Serbia, where although JAT was a disaster of an airlines, it had still an emotional value for lot of Serbs.

    All in all this possible new national carrier can not be functional, if materializes, at least till 2016.

    Btw. I 've heard rumors that one of the former MAT owner's is planning to set up a new airline in Skopje... Admin some info?
    Fourth

    ReplyDelete
    Replies
    1. They aren't enough pilots and crew in the country for 737NG and 320 family - that it pretty much.Because they all went abroad after the succes with Meta Aviotransport, Avioimpex, MAT.
      These all went down most because of bad management (even in conditions of allmost no competition and flying mostly to hub or "diaspora" destinations like ZRH,GVA,VIE,FRA,HAM,CGN,SXF,CPH,GOT,OSL,FCO,PSA,AMS,MST,IST,BRU,SVO) and having SKP/OHD not as their homeland/hub but were on level as foreign companies.
      Now the government want to make a project that will be "something similar''? :D

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  12. Za Makedoniju bi bilo najbolje da kupe nove F120 sto upravo Fokker razvija nebi bilo lose ili neki Embraer E190.
    Nevrujem da bi na pocetku bili sposobni za A320 ili B738 =D
    A i tesko je bez saradnje sve bi islo na IST ili ako bi napravili saradnju sa LH to bi bilo najgore po njih kao sto mozemo0 videti na JP-CTN .
    INN-NS

    ReplyDelete
    Replies
    1. A da probaš samo da citaš postove?

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    2. Fokker went bankrupt in 1996; the company is defunct.

      Delete

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