Thursday, June 30, 2016

Skopje Airport subsidy probe "inconclusive"


The European Commission (EC) has said its investigation into subsidies provided by the Macedonian government to low cost airlines, primarily Wizz Air, at Skopje Alexander the Great Airport since 2012, have so far been inconclusive. The Commission launched an investigation in late 2014 after a complaint was made by the Kosovo Civil Aviation Authority, which claims the incentives have created unfair competition in the region. The EC notes it is keeping in contact with relevant authorities in both Macedonia and Kosovo but that the probe has not led to a firm conclusion on the matter. It adds it wants to put the issue of fair and transparent market conditions into context. Pristina Airport, which is busier than its counterpart in Skopje, was overtaken by the Macedonian airport in monthly passenger figures this May for the first time in over ten years.

The Macedonian Ministry for Transport and Communication says its incentives policy has been carefully analysed and is in accordance with EU rules and regulations. It adds that in 2012 the Kosovan Ministry for Infrastructure was sent additional information on the subsidy program which, it says, respects all international legal procedures. The Macedonian government launched a three-year subsidy scheme in 2012. It has proven successful with Wizz Air opening a base at Skopje Airport, which has in turn led to significant passenger and traffic growth. A fresh round of subsidies was offered last year, which led to Wizz Air basing a third aircraft in the Macedonian capital, launching a handful of new routes and introducing services from Ohrid as well.

Wizz Air says the subsidies it receives from the Macedonian government are in line with EU regulations. “Financial support is provided on a transparent basis through public tenders. We are fine and we have no issues with Brussels”, Wizz Air’s CEO, Jozsef Varadi, said. However, the head of Pristina Airport insists, “In this competitive environment we cannot catch significant growth without the support of the government. We can do our best with incentives, but in the end the government has to support it”. The Kosovo Civil Aviation Authority has based its complaint against Macedonia on the Common Aviation Area Agreement, which the European Union has signed with countries in the western Balkans. According to the Agreement, “This aviation area implies the adoption of the part of the Acquis containing the European aviation rules … The processes of market opening and regulatory convergence take place in parallel in order to promote fair competition and the implementation of common high safety, security, environmental and other standards”. Pristina Airport itself is offering a range of subsidies to stimulate traffic and passenger growth, however, these are being offered by the airport’s operator, rather than the government, as is the case in Macedonia.

65 comments:

  1. Why am I not surprised that nothing has come of this? PRN should focus more on lowering fees and attracting LCC if it wants to be competitive rather than complaining about others.

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  2. I really don't see an issue with these subsidies. If I remember correctly they were open to all low cost airlines and were offered on a tender. Obviously selecting Wizz Air was a smart choice since they have opened so many routes and based aircraft in SKP. As far as I'm aware they haven't dropped a single route in these 4 years (except replace Lubeck with Hamburg because of operational reasons).

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  3. The problem with Pristina is that the government sets the fees, not the airport operator and they want the government to do more. I think they actually hoped for this outcome so they can now go and tell the government that the EC has no issue with Macedonia so Kosovo should do the same.

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  4. This part of the world is an ongoing Benny Hill sketch

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  5. What a bunch of whiners! Macedonia offered the incentives to all airlines. Any airline could have taken advantage.

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    1. Oh please. It was pretty much created specifically for Wizz Air. Like the recent tender in Budapest for flights to Ex-Yu.

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    2. Anon @ 9:15 is obviously privy to some info not available to the European Commission.

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    3. Of course the Commission won't have a problem. It concerns Wizz Air after all - an EU registered airline.

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    4. When finding solid facts and arguments fails, let's turn to Balkan's favorite pastime - conspiracy theories. Let me get my popcorn.

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    5. Yeah its a massive EU conspiracy against Prishtina Airport. Please...

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    6. Haha first 9.40 seems like we posted at the same time with the same thought.

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    7. As if Malev, Sabena and SkyEurope weren't EU registered airlines... Swissair surely wasn't, so now we really know why it ultimately failed.

      Now seriously, I suggest a Youtube search for "Grounding: The Last Days Of Swissair (2006)" - if you haven't seen it, it's worthy of your time.

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    8. AnonymousJune 30, 2016 at 9:40 AM
      Yeah its a massive EU conspiracy against Prishtina Airport. Please...

      hahahahahahaah... i like this, im from PRN but this is a nice one.

      just to be clear, lazy ass people in our gov willing to blame their lazy ass...

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  6. I'm interested to see how June will turn out for PRN and SKP. Anyone have any preliminary figures or a general estimate?

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  7. But the question is why has Skopje never diversified its offering? I'm sure Wizz Air was not the only low cost airline interested in operating flights to Macedonia yet it seems they are the only ones that do.

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    1. Why fix something that isn't broken?

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    2. Because over 50% of your traffic is being generated by a single airline. Look at Ljubljana or Belgrade and you will see what happens when you overly on one carrier and how much it affects the airport when they cut only one or two routes.

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    3. They have, it's just that what they could offer wasn't good enough for Ryanair etc.. yet. 2017 might be a different story.

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    4. Any hints on what could happen in 2017?

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    5. That's no secret - there's been a plan for a Ryanair based aircraft for some time now.

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    6. Yeah but those plans haven't advanced for a year now.

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    7. The question is for 2017, isn't it?

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    8. Concerning the fact that Ryanair start war against Wizz in Sofia, Timisoara, Bucharest, Niš... for sure in near future it will start war in Skopje. It is just about capacity, so how fast they will get planes. Trust me, as there is 3 based Wizz planes in Skopje, Ryanair will start with at least 2 planes and Wizz will than bring one more extra. And that will happen in next 1-2 years.

      Only scenario that this will not happened is if Wizzair have some secret understanding with Macedonian government or TAP, and than is not so unreal.

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  8. I think PRN is just a bit annoyed they didn't think of it first ;)

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  9. Apart from subsidies on some routes, does Wizz get other incentives for handling, landing, use of gates? I remember they were receiving a whole lot of things from BEG a few years ago.

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    1. No. Just a single digit EUR per pax kickback on the new routes launched when the 3rd ac was announced. Anything prior to this has already expired and anything after (CPH, SXF, BTS) does not benefit from the scheme.

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    2. They easily could because the subsidies we are discussing here are from the government and not from the airport. So the airport could give them additional incentives for handling so many passengers each year, starting new routes etc.

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    3. If they don't TAV has one of the sweetest deals around.

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    4. Bingo. TAV are just milking the gov't for all it's worth. On top of this they are pushing for a Turkish funded national carrier. The cheek.

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    5. I remember reading in a Macedonian newspaper a few years ago that TAV was giving Turkish Airlines quite favorable terms at SKP.

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  10. Knew nothing would come of this.

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    1. Don't rush! The article is recycling a two weeks old statement from an EC spokesman, who was caught off guard on the matter after a question from a MK journalist. EC is formally investigating the case and the parties are frantically submitting documents to prove their position. Wait and see. I wouldn't feel good if I were in the shoes of MK Gov.

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    2. Nice spin attempt!

      Too bad there are no facts to support PRN's case.

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    3. Wait and see :) Btw, easyJet has started today sales of PRN-CDG tickets. As of autumn, easyJet is adding the fourth destination from PRN. I would bet on PRN strategy with easyJet rather than MK GOV-Wizz love affairs.

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    4. Really happy for a new EZY route! Good luck!

      I don't see an easyJet 'strategy' to be honest. Merely an effect of PRN's charge strategy and milking existing traffic with no real idea how to attract new airlines. Pretty much what TAV did until the Mk govt got involved. CDG is just another new route after a few years. easyJet is not a natural partner for this type of market really. It's only surviving due to the over-inflated charges at PRN. Once they feel the heat from SKP surpassing them and this 'investigation' failing, we might actually see some proper development. Looking forward to it really. The visa question being resolved would be the cherry on top of course.

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  11. I'm certain all of this will go away the minute Wizz Air announces flights to Pristina.

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  12. The problem here is that more and more people from Kosovo are using Skopje and Ohrid. Fu*k logic.

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  13. Kosovo has similar routes as Skopje so I fail to see why they are complaining.

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    1. Precisely because they have similar routes.

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  14. Already happened. Wizz will launch first flights from Budapest this autumn but I doubt SKP will surpass PRN this year. PRN has high figures in the summer. Lets see!

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    1. PRN can keep momentum with Skopje if a LCC bases an aircraft there. But there are two main isses:
      1. Visas
      2. High fees although this has been dealt with Pristina's own subsidy scheme.

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  15. easyJet just put on sale tickets PRN-CDG starting from Winter 2016.

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    1. Wicked. Good luck!

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    2. Yeah, too bad their market research teams have not consulted you before the decision to introduce PRN-CDG was teken :)

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    3. RKS - Why, do you reckon there were better picks than CDG?

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    4. Tranquilis, I was joking :) Paris will do very good. KS diaspora + plus the new profile of pax after visa lib - middle class KS backpackers and young couple with or without kids going to Paris for fun.

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    5. I think the misunderstanding was primarily about "wicked". It's a positive thing :)

      Congrats on new flights. BEG would really use alternative to JU on CDG routes.

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    6. BEG has Wizz on flights to Beauvais.

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    7. Sure it does, I was intentionally referring to CDG.

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    8. As any proper Frenchie will tell you, BVA is not really PAR. ;-)

      Too bad it's a D3-D6 schedule as compared to SKP-BVA's D3-D7. D1-D5 or D2-D6 would've been perfect.

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    9. But even if Air France would launch Belgrade, they would set up a duopoly with JU and nothing would really change.

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    10. As if anybody from Kosovo would get visa abolition.
      Does anybody listen to news?
      Now after Brexit nobody will take in immigrants that take away jobs from own people, especially in France where next year are elections with Mrs Le Pen as candidate.
      And hopefully a referendum in the Netherlands.

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    11. What referendum in the Netherlands? There is nothing about it in Dutch media.

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  16. Don't get the hate between these two airports.

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  17. Hopefully Pistina starts taking care of its own business. Expected this outcome.

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  18. Are any legacy carriers planning to start flights to SKP?

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  19. "Inconclusive" - bureaucratic term for "something is obviously not right there, but we did not collect (yet) enough evidence to prove it beyond doubt.

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  20. OT flew last night's AMS-BEG, JU365, YU-APD, filled to capacity, I'd say 60% transits, many went off to TIA, SKP, ATH, SKG, BEY, AUH...

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    1. I zato moj let u subotu BEG-AMS kosta skoro 55000 povratna... LoL

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    2. OT: Airliners.net trip report-JU500 part 2 is now out.
      Only one single person in business class to New York.

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    3. You mean JU501...

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    4. According to the reviewer, the Air Serbia "wow" inter-European service exceeds competition. They need, however, to improve slightly service to US, and more importantly to get better slots at JFK to improve connectivity JFK-BEG-Western Europe and to attract more business passengers. But generally very positive review. I hope that Air Serbia would think about his suggestions.

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    5. And how will they get better slots?

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    6. Either by trading slots with other airlines or by being granted new slots as time goes by and other airlines leave or abandon their slots.

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