Tuesday, July 7, 2015

Macedonia in talks with low cost airlines

Macedonian government negotiating flights with high profile low cost carrier

The Macedonian government is in talks with low cost airlines to launch additional flights to both Skopje and Ohrid. According to the Macedonian Prime Minister, Nikola Gruevski, the country has entered negations with “one of the most prominent low cost airlines in the world”, believed to be Ryanair, which is eyeing services to Macedonia’s two international airports. The government is willing to offer subsidies and incentives to the low cost carrier, similar to the ones provided to Wizz Air, which saw it open a base in Skopje and launch services to Ohrid as well. “We are negotiating with one of the most prominent low cost airlines in the world to launch a range of services which will connect Skopje and Ohrid with various destinations in Europe and beyond”, the Prime Minister said.

Ryanair has a limited presence in the former Yugoslavia but has been on the lookout for new routes in the region over the past years. The no frills carrier has a seasonal summer base in Zadar. It also flies to Rijeka, Osijek and Pula in Croatia, as well as Podgorica in Montenegro. Two weeks ago it announced it would upgrade its seasonal service from Charleroi Airport to the Montenegrin capital to year-round operations. In 2007 Ryanair launched flights to Maribor, however, the service was cancelled due to poor loads after only a few months. Last October, the airline confirmed it had entered talks with Mostar Airport regarding the possible launch of flights from Germany and Scandinavia. However, in the end, these services never materialised.

Unlike its low cost rival, easyJet has ruled out services to Skopje in the near future. In an interview given to EX-YU Aviation News earlier this year, the airline said it would maintain a limited presence in the region for the time being and would focus primarily on Croatia. The Macedonian government is confident it will attract more tourists by subsiding low cost airlines. Last week, Wizz Air launched five new routes from Skopje and based its third aircraft in the city. As a result, Macedonia’s busiest airport anticipates for passenger growth to reach 25% this year. The Macedonian government has also said it is considering the creation of a new national carrier. A consultancy firm hired to seek out potential foreign partners to assist in creating the country's new national airline will deliver its findings to the Civil Aviation Directorate next month. The report will determine whether any reputable global carrier is interested in partnering up with the Macedonian government in order to create the new airline.

45 comments:

  1. I am not sure they can have both the national carrier and strong LCC presence. Of course anything can happen if they decide to splash the cash into aviation but they may need it for other things...

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  2. Ryanair would be great addition. Wizz Air won't be too happy.

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    1. Yes, just like in Budapest, Warsaw, Gdansk, Poznan, Wroclaw, Riga, Vilnius etc. An airline which had 17+ million pax in the last 12 months should not always watch at FR but should do their on job.

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    2. If this happens, Wizz Air could reject Skopje and move to Pristina right next door immediately and then Skopje will loose its current passengers, which bad for Skopje to get two low cost airlines in service on same time.

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    3. why PRN, which is expensive, when they can move to INI, which is dirth cheap?

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    4. And can not land all throug the winter for the lack of ILS...

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  3. This would be fantastic. More cheap flights :)

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  4. Zmaci FR planira da posle planova za AMS se prosiri i u SKP.
    Samo jedno pitanje za Makedonce jel moze SKP da dovodi druge LCC koji mogu da ugroze W6 ako postoji takav ugovor :)
    INN-NS

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  5. Spending money to subsidize LCC flights to SKP is probably a very good investment.

    A single tourist or gastarbajter making a trip that they would not have made without the LCC flights can bringin hundreds of euros into the country.

    In my opinion, this factor may be what makes potential JU transatlantic service worth it. The government could give a reasonable subsidy if it is concluded that these flights would increase the number of Serbs returning to visit.

    When an entire family makes a trip from USA to Serbia, it is common to spend at least a thousand euros by going to stay at a national park such as Tara and going to a lot of restaurants and attractions.

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    1. 'Gastarbajter' people from Europe will come (and spend some money) one way or another. The only question is whether they will use aircraft or bus as their transport. In all exYU countries there is fierce competition between bus operators and airliners for the 'gastarbajter' market. Therefore, Macedonia will profit nothing extra from the 'gastarbajter' population because they will come and visit and spend the same way they did for years.

      What may change is the share of the cake for airlines, namely LCCs. More people could choose them over bus carriers.

      This leaves tourists as the potential source of extra income, however tourists cannot just be brought to the country and left at the airport. The country should offer them something (cheap food, cheap fun, other cheap stuff that go well with cheap flights).

      By the way your example of a 1,000 euro spending by a family for a trip to a national park is by no means any general trend in the Balkans. It can only be an exception. And when such enthusiasts really insists on visiting their homeland to spend big cash it still does not mean they would fly the hypothetical ASL transatlantic service. What if they opt for LH, AF, KLM...? You would need thousands of such tourists so that ASL can claim their slice of the cake - and there are simply no such tourists.

      Any rise of LCCs in the Balkans is rather a redistribution of market share (vs buses and personal cars) then organic. The market is poor and it will stay poor for a long, long time.

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    2. G Aleksandre
      Ne razumem bas vas predlog da ASL A330 bude u LCC konfiguraciji ?
      INN-NS

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    3. That government subsidy you mention might be a problem if EU does not like it. USA-Serbia new bilateral does not support government subsidy if it keeps prices artificially low. If there is a way to ensure all parties (Angie M in particular?) are okay with it as a one-time or limited duration help to get this project off the ground then it might be okay. Project will be cash thirsty for some time and ASL likely won't have enough unless they get commerial loan from Etihad (more expensive) or government subsidy (better but politically more delicate). My 2 cents.

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    4. Exactly, and that goes for all exyu republics

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    5. AnonymousJuly 7, 2015 at 12:49 PM

      If people can fly for a price that is similar to taking a bus, they will travel much more often for brief trips such as weddings, graduations, long weekends, even cheap dental appointments. Travelling back becomes a monthly thing rather than something that only happens for Christmas or summer break.

      There is a big difference between diaspora in North America and diaspora/gasterbajteri in Europe. Diaspora from America travels much less often but when they do, they spend a lot of money. Spending 1000 euros for a family is certainly the rule, not the exception.

      Diaspora in North America is rather wealthy. Many are there since the 70s or 80s.

      INN-NSJuly 7, 2015 at 12:52 PM

      ASL won't have long haul LCC because they are not an LCC carrier, but if it was up to me, I would certainly make Air Serbia an LCC like Norwegian. Low price is the easiest way to capture market share, plus low fares unlocks air travel to more and more people from our region.

      I think the best for JU would be to have A330-300s in about 18 lie flat business seats, and then the rest would be a mix of economy plus at 2-4-2 with 34 inch pitch and economy at 3-3-3 with 31 inch pitch.

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    6. ASL won't have long haul LCC because they won't have long haul at all. Low yields, highest seasonality, still undeveloped feed network, with even decreasing tendency, lack of infrastructure at BEG, and finally "bad times politically" because of the "war" MEB3-USAB3. Last but by no means least, long haul in ASL as it is today is ONLY and exclusively announced by POLITICIANS, not aviation experts. And we shouldn't forget that politicians very often have very short duration. Therefore, you can freely stop considering wether LCC or classical long haul model would be better for ASL, because as I have already said : There would be no long haul in ASL, no matter how big INN.NS wish and wet dream that is.

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    7. Aleksandre hvala na odgovoru.
      @10:30 PM
      ASL ce imati preko okeanske letove a to su rekle osobe koje dosad nisu slagale 80 % stvari .
      A videcemo sta ce biti posle Avgusta kad ce se znati tacne promene linija i svega za 2016:
      INN-NS

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    8. A330 with 9 across@31in seat pitch for a 10 hour flight? That's like Air Transat, Air Asia X if not worse. Really sadistic, no thanks!

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    9. 9 abreast at 31 inches takes up 19% less room than 8 abreast at 34 inches. South East Europe is a very price sensitive market, and this is the only method for Air Serbia to break into the market. There is no chance that they can compete against the established players other than on price.

      Think of it as more of an economy minus for those who are the most price sensitive and who could not afford to fly otherwise.

      Air Serbia has already tried to capture the European market with superior service and a good product. It hasn't turned out too well for them because as soon as they end their price dumping, the passengers go back to the airlines they flew before.

      The only way for Air Serbia to be profitable and expand is to greatly cut costs and lower fares as much as possible.

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    10. Budapest could be quite an example in support of your theory.

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    11. Tuzla, Nis, Skopje, all the secondary airports in Poland and Romania, and many more cities and airports in Central and South Europe have started to thrive once LCCs have started operations.

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  6. The next potential new routes could be : Verona,Karlsruhe(Baden-Baden), Berlin Schonefeld,Turku(Finland ) and Hannover.These destinations are searched from PRN and SKP can steal pax from PRN with its LCC.I am not really sure about Hannover if its an acceptable airport to operate by wizz or ryan about taxes but if not,,,,, Bremen is the best alternative to cover it..

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  7. Another good way to attract passengers from Pristina while its sleeping

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  8. Interesting how it says "destinations in Europe and beyond". Ryanair just announced it is launching flights from Tel Aviv to a couple of European cities. Maybe we finally get Skopje-Tel Aviv route. Just maybe.

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    1. Ryanair will not flight to Tel-Aviv but to Ovda (where it will be subsidied with 45 EUR/passenger)...

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  9. Ryan air would be very welcome. Does anyone know how Wizz Air is doing on their new Skopje - Barcelona route?

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  10. Ryanair wanted to fly from Niš airport(talks were held a month ago), but they wanted for flights to be subsidiesed... since there are no money in the budget this wasn't realized.

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    1. That makes sense. That's why the went to SKP after they couldn't get subsidies in Nis.

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    2. if airline A has annual 50k pax and pays 3eur fee per pax, airport gets 150k eur

      if airline B has annual 50k pax, pays 10 eur fee per pax and gets 200k eur in subsidies, airport nets 300k eur

      subsidies alone mean nothing without whole picture

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    3. First, what makes you think Airline B agreed to pay 10 euro fee per pax? Maybe they wanted 3 euro fee as well? Maybe they wanted zero fees + subsidies?

      Second, even if Airline B agrees to pay 10 euro per pax and the airport nets 300k euro, subsidies still have to come from the government - which does not have the money.

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  11. Ryanair left MBX because its own demand about lowering fees at the MBX. This fees were totally unexceptional for MBX. Load factor was 90%.

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  12. OT for all of people here who were very much "concerned" about the future of Skygreece and their ZAG flights, because of the Greece financial crisis : Today's Toronto landed in Zagreb 20 minutes ahead of scheduled, and departure to Athens was 20 minutes ahead of schedule, too. Like the last time, some 200 passengers disembarked at ZAG. Tomorrow's flight is expected to operate on schedule, no modifications, no cancellations, no delays.

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    1. No need for quotes around concerned, customers are genuinely concerned. SkyGreece announced cancellation of July 7 ATH-JFK and JFK-ATH flights. Because of financial crisis beyond SkyGreece control, things are still on a day to day basis.

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    2. all Friday Athens-NYC and back flights are no longer in the system for the rest of the summer. thats not one time financial crisis related.

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    3. But if the flights are selling well then is it safe to assume that OU and LH are feeling the pinch? We are talking about 200 passengers to a relatively small airport, I am sure they are going to feel the difference, no?

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    4. once a week 200 pax oneway?
      bigger impact has the daily BA LHR and AF/KL service

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    5. @12:43
      I wouldn't be surprised to see Friday flights switched to ZAG

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  13. Tonight BEG-AUH 40 pax.

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    1. During June-September period that route should have a minimum of 80-90 pax per flight.....

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    2. Yes, it is really disappointing and LF is abysmal. I'd blame the pricing for that. Also some flights such as the night flight from Paris don't even connect onto the flight to AUH.

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    3. For some strange reason, BEG airport website isn't displaying more than 3 codeshares on a single flight. When thinking about why the EY flight fills much better than JU one, take a look at this (copied from Abu Dhabi airport website):

      20:20
      Belgrade
      EY072
      Etihad Airways
      20:20
      Belgrade
      9W6490
      Jet Airways
      20:20
      Belgrade
      JU8080
      Air Serbia
      20:20
      Belgrade
      UL2472
      Srilankan Airlines
      20:20
      Belgrade
      HM5049
      Air Seychelles
      20:20
      Belgrade
      VA7072
      Virgin Australia

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  14. I would speculate that it is Norwegian, rather than Ryanair. Rationale: "Beyond Europe" means "intercontinental". Macedonian government has declared their intention to establish intercontinental flights from Skopje (mainly North America), and at present the only LCC [in Europe] that does long haul is Norwegian. I hope that we shall see Dreamliner at SKP soon.

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    1. you are joking, right? Norwegian struggles with long haul from their main airports, and you think they'll be successful form SKP? you're just like INN-NS

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    2. I believe Dremaliner in SKP will remain dream

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    3. Why? 777 is probably are a dream, A380 / 747 for sure, but some of 787, 767, A330 or A350 one day will fly SKP regularly.

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