Friday, December 9, 2016

Macedonia to keep controversial airline subsidies


The Macedonian Minister for Transport and Communication, Vlado Misajlovski, has confirmed that the government will continue to subsidise low cost carriers, a move which will not sit well with authorities in Kosovo who say the policy has distorted competition in the region. Speaking in an interview, Mr Misajlovski said, "The benefits of the subsidies are visible and will continue. We have generated 34 direct routes, 24 of which are within Europe with very reasonable fares. We are currently negotiating with several other airlines which are interested in entering the Macedonian market, which will open up new destinations. As a result of this policy, passenger numbers at Skopje Airport have grown by 20% each month". The Macedonian government launched a three-year subsidy scheme in 2012. It proved 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.

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. However, the Kosovo Civil Aviation Authority has filed a complaint with the European Commission, while Pristina Airport says it is unacceptable for the state to provide these subsidies, and argues they should come in form of incentives from the airport operator itself. Mr Misajlovski notes that the policy has proven extremely successful. "In 2015 we had only ten to fifteen destinations. Now we have direct flights to London, Venice, Basel, Malmo, Eindhoven, Dortmund, Milan, Munich, Memmingen, Stockholm, Gothenburg, Brussels, Frankfurt, Cologne, Paris, Barcelona, Oslo, Nuremberg, Hamburg, Friedrichshafen, Berlin, Copenhagen, Bratislava, Zagreb, Geneva, Prague, Dubai, Belgrade, Ljubljana, Rome, Istanbul, Vienna and Zurich", the Minister said, adding that Wizz Air recently launched a new service to Hannover, while Qatar Airways will soon introduce flights from Doha.

Speaking to EX-YU Aviation News last week, a European Commission spokesperson said, "The Commission is aware of concerns raised about the financial incentives' scheme granted by the Government of Macedonia since 2012 to both domestic and foreign airlines to fly from the "Alexander the Great" Airport. It could possibly distort competition between airports in the area and indirectly between the airlines concerned. DG MOVE [Directorate-General for Mobility and Transport] is in contact with the competent Macedonian authorities to get all necessary information to examine this matter. This is taking place in the framework of the European Common Aviation Area Agreement, which was signed in 2006. While this Agreement is not in force yet, it is applied administratively". In its most recent annual progress report on Macedonia in the area of air transport, the European Commission said that "concerns about possible state aid in the aviation sector need to be addressed".

98 comments:

  1. 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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    1. Oh hypocrisy, your name is Wizz air.

      The subsidies are all good, because "free market" Wizz is receiving them. Everyone knows that taxpayers from poor countries like nothing better than giving foreign rich people their hard earned money. There is nothing else in Macedonia that needs this investment.

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    2. Actually, this is the only reasonable investment the Macedonian government has made lately, and it's been a great success really, beyond any doubt. Have you seen all those monuments?

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    3. No.

      At least these building will stay and can serve some purpose.

      The money invested in Wizz Air will just fly away one day. Literally.

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    4. Actually it's gone beyond that point. 3 W6 a/c = 3 FR a/c = 2 U2 a/c. No subsidies necessary for established destinations and developed markets. Anyone exposed to financial maturity of new routes would understand this.

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    5. Compare SKP to LJU...

      Macedonian government invested some money, and now majority (not all) routes from SKP are self-sustainable and they have a lot of routes.

      Now, Slovenia invested tens of millions of EUR into Adria Airways and the result is less and less routes from LJU every year.

      Delete
  2. 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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    1. Ah, but they don't want to. They want to keep on milking the cow and bully whoever challenges it.

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    2. Wizz milking taxpayers again?!

      You don't say!

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  3. Governments should not be allowed to distort the market. If SKP wants to attract airlines then it should come from their own pockets. They were given up for concession for a reason.

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    1. Zadar and many other airports around Europe support new destinations through tourist organizations funding. Same thing.

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    2. So why then does the EU Commission have an issue with this and not Zadar?

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    3. EU doesn't have an issue with it. It's 'news' only because PRN is complaining. It's been a long time now that there's no real news around it since it's all covered by an EU framework. ZAD is just lucky not to be in PRN's targeted catchment.

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    4. The EU Commission has been probing this for almost 3 years now. They obviously don't care they just want to appear as if they do.

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    5. Well it suits them. If this involved an airline like MAT they would have already ordered them to pay back all the subsidies. But since it's one of their own - Wizz Air - then all is good.

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    6. Yeah, let's fall back to conspiracy theories. The local specialty.

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    7. In the latest report about progress of Macedonia European Commission has harshly criticized these subsidies.

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    8. Frivolous interpretation of facts. See above and below. No wonder there is no actual action for three years now.

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    9. There is no actual action because Macedonia is not a part of EU. It complies with EU standards on voluntary basis.

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    10. Oh, well then this whole argument is pretty much a waste of time, isn't it? :)

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    11. It is a waste of time. We all know the unquestionable dogma: subsidies for Wizz and Ryan are good and beneficent investment of taxpayers money. Subsidies for everyone else is shameless waste of taxpayers money.

      It sound illogical and hypocritical, but it is hard to see that if your job depends on not noticing it.

      Delete
    12. I guess this was never intended to be a proper and fair argument, was it?

      It's not a waste of time. It challenges the misinformation and hypocrisy. I'm happy to spend some time doing that.

      Delete
    13. Alen Šćuric PurgerDecember 9, 2016 at 12:34 PM

      Ryanair was ordered to pay back multi-million amount of EUR till now because of illegal subvention.

      Just few days ago they have to give back some 3 million. In 2015. just in France Ryanair payed back almost 10 million EUR to 3 French airports. This year EC ordered Ryanair to pay back 2 million in Austria. Etc. etc...

      Subsidies are OK if they are PSO by very strict rules of EU.

      But, like everywhere else, big players find way how to do it anyhow. So it is not subside but paying articles in Ryanair (other companies) web pages and publications. On that way one can not forbid airport, tourist organization or other institution to promote destination. If they can do that in newspaper read by 200.000 readers, for sure they can do that in Ryanair publications read by 50+ million readers. We all know that it is not about advertisement or promotion, but about subsidies, but they find "hole in law".

      But to say that there are different standards and that Ryanair is immune to same thing EU want to force in nonEU countries is at least not true. One more time, till now Ryanair have to give back multi-million amount of EUR.

      Delete
  4. The key to this whole debate is that subsidies are offered for new destinations only, something that is well within anyone's right to do, within the signed-off framework.

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    1. The key is that the government is offering them and not the airport.

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    2. And what about tourist boards, city councils, etc? It's all a form of government.

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    3. Oh, and by the way, I would add that this article is misleading. The subsidies are open to any interested party, not to LCCs only - anyone who is interested to open new destinations under the offered terms. Unlike Budapest's recent one, SKP's tenders have been pretty transparent and open - the main reason why this is a 'no news' item in the end.

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    4. A policy which is being investigated by the EU and has been criticized by the EU in every progress report in the past 2 years and a minister saying how they will keep going is no news only to you.

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    5. @9.24
      Completely false that these subsidiez are open to all airlines. They are only open to low cost airlines and that has been a condition from day 1.

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    6. False and false. A pretty frivolous interpretation of events. A wannabe news item by PRN and LCC haters.

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    7. @9:28

      False. Link the tender text for all to see. LCC has never been mentioned once. It's however a fact that the terms have only suited Wizz Air - it was way too little money for anyone else.

      Delete
    8. No YOU are wrong. I have nothing against LCC or Wizz or Skopje. But you are wrong that these are offered to Qatar Airways, Adria, Croatia Airlines. They are offered ONLY to low cost airlines. It has been that way from the start and repeated in last year's tender.

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    9. Further to refuting the above claim - there is no way to enforce an 'LCC' classification. It's just an interpretation of a business model. Shows how far labeling has been embedded in the local mindset.

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    10. @9.28 are you claiming it's false that the EU has not mentioned this in every recent progress report. Apart from it being quoted in the text you can easily find each progress report for Macedonia on the net.

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    11. Sorry to say mate, the fact is there's neither a way to enforce it nor has it been mentioned anywhere. It's just a repetitive argument around here that it's been hardwired to the perception of SKP development case.

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    12. @9:33

      It's nice that you've shifted the original argument from 'as been criticized by the EU in every progress report in the past 2 years' to 'are you claiming it's false that the EU has not mentioned this in every recent progress report'. Zamena teza much?

      Nothing wrong with what you said right there. Still doesn't make it a valid infraction.

      Delete
    13. By the way, I personally find it being mentioned at all completely hypocritical by the EU, since the whole process was fully aligned with them, but hey, I guess we'll all agree on our view of how they apply their moral standards.

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    14. It is true. Macedonia was criticized for these subsidies.

      I wonder how some people immediately fill with rage if someone proposes subsidies to national airlines, owned by the respective states, but have no problem whatsoever when a country subsidizes foreign company that can tomorrow decide to go somewhere else.

      Please Wizz guys help me understand.

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    15. As you will certainly know, the devil's in the details. And by details I mean what it's been intended for, whether it's a level playing field, and of course the total amount invested.

      I'm sure you will find Wizz vs national airlines cases vary significantly in all of the above categories. If you're really interested in a reasonable debate. I know I am :)

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    16. It seems only people here are not aware that these subsidies are aimed only at LCC

      http://www.independent.mk/articles/10262/Macedonias+Transport+Minister+Announces+New+Call+to+Subsidize+Low-cost+Airlines

      https://seenews.com/news/analysis-macedonia-to-rely-on-subsidies-low-cost-carriers-to-improve-air-links-with-europe-199085

      http://www.mia.mk/en/Inside/RenderSingleNews/289/133198740

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    17. Funny there's no links to the actual tender, which is what this argument is about. :)

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    18. And of course, the argument has spun out towards hyperbole in the lack of arguments.. :(

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    19. Tender was never made public as far as I know.

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    20. Of course it was. In English as well. With some digging you'd probably even find proper links on this board..

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  5. "LCC haters" hahaha gosh. There are some people who can't handle any criticism of beloved Wizz Air. Same as fans of another airline in the region ;)

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    1. How else are they gonna justify the hundreds of millions siphoned into murky local projects? Attack is the best defense, hence the 'LCC haters' label. Cheers.

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  6. Well we were hearing here many many time that there are no more subsidies to Wizz in SKP, called delusional and liars.

    Well, well, well...

    We were right, and people calling us delusional are actual liars.

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    1. Another spin attempt. Geez guys. Is it fun distorting the facts to support your own cause and smear the others? Effing hell.

      Repeating ad nauseam: Only new destinations are supported, 2.5 out of the 3 aircraft are self-sustainable. Is it that hard to remember?

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    2. Nis has a leveled playing field.
      Not SKP.

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    3. Kudos to Nis. Also kudos to SKP.

      An apples to oranges comparison, since INI started from 0 traffic and has had a history of unsuccessful subsidies, but kudos nonetheless.

      Delete
  7. So that is the secret of Wizz success in Skopje.
    I am not surprised. Wizz likes nothing better than taxpayers money in their pockets.

    You know, free market, bla, bla, bla... is good for others. Parasitism is the Wizz way.

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    Replies
    1. I guess the sandwich eaters have arrived to work.

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    2. you are the same person @9.46

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    3. I still don't get why should Macedonian taxpayers invest hundreds of thousands of euros in a foreign company for years when that can leave tomorrow with all their investments.

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    4. Because it's investment in connectivity and proving there's a viable market. If W6 left tomorrow FR will step in the next minute.

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    5. Didn't they prove it already?


      This is actually an indirect support to airport owners, who can brag how profitable they are while the government foots their bill.

      Delete
    6. @10:20

      2nd paragraph: Bull's eye, bro, bull's eye!

      And I agree about having proven it. That's why I don't necessarily agree another supported W6/FR aircraft is a step in the right direction. The above response was answering to the logic of the investments made so far.

      Delete
  8. I think they did the right thing here. They managed to lure Wizz Air to base 3 planes and most subsidies have now expired. That's a good deal.

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    Replies
    1. +1

      Mind you, the bang for buck (return of investment) is incomparable to any other deal, even compared to all of Europe.

      Delete
  9. not gonna check the comments today. there is enough hate in the world already

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  10. Apart from subsidies on some routes, does Wizz get other incentives for handling, landing, use of gates?

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    Replies
    1. No additional support from TAV. No incentives. A good question to be asked.

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  11. It's only 10am and there are already 50 comments *gets popcorn*

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    1. haha my thoughts exactly. At 10.35 there were 70...

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  12. Well elections are being held in Macedonia this weekend so who knows if this minister will be in power by next month.

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    Replies
    1. The best comment so far. +1

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    2. I think it's safe to say the minister's party will.

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  13. I have a bit of mixed feeling about this policy. I am very happy that there are so many new routes from Skopje and this policy has revived the airport and increased connectivity. BUT I think they should stop at one point. A few legacy airlines have already left and while I fly LCC often it is good to have diversified offer on the market.

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    1. +1

      I wonder if another W6 / FR aircraft is the best next investment. I'd rather if they found a way to connect daily to a big hub (AMS, FRA, others) for a one-stop connection to the world.

      Delete
  14. OT

    Some days ago:

    ADRIA Airways
    LJU - AMS
    CRJ900
    50/84
    LF: 60%

    Haplek

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    Replies
    1. Not bad for this time of the year. Do they offer any connections at LJU?

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    2. How do you mean connections at LJU?
      You can transfer in LJU on Adrua flights for sure.

      Haplek

      Delete
  15. The whole idea of giving SKP to Turks was to make them invest in traffic and development.

    Now we here hat the Macedonian government does it still.

    Crazy.

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  16. It would be interesting to see how much the government of Macedonia sets aside for subsidies each year. It might not be that much.

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    Replies
    1. Initial tender was budgeted for EUR 5 mil over three years.

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    2. A blast from the past:

      http://www.exyuaviation.com/2012/05/six-new-routes-from-skopje.html#comment-form

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    3. From the above link: 1.1 mil for projected 120k in the first year. Seems in line with the 5 mil for a full a/c over three years.

      Funny reading some of those comments from today's perspective. Someone mentioned 'Of course JU declined the offer, they don't have aircraft to base there'.

      Delete
  17. Doubt much will come out of the EU proble into this. They have already said theit incestigation so far was "inconclusive".

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  18. Seems to have been overlooked in this subsidy hype but the text quotes the minister saying they are talking to a few airlines. Anyone know which ones? We read about Norwegian being interested. Any other contenders?

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    Replies
    1. Easy jet maybe? Though they do fly to Pristina and now they are apparently considering Nis too.

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  19. I really don't see a problem here (except of course for some persons in Pristina who seem to think the entire region must obey them).

    And the taxpayer argument should formally be forbidden to use on this blog.

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    Replies
    1. So you complain about PRN because they want everyone to obey them yet you demand for the taxpayer argument to be banned? Interesting.

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    2. Yes. These two are not mutually exclusive.

      The taxpayer argument is widely misused and manipulated on this blog. It does not make any contribution to discussion - it only flames it. Not to mention that the overwhelming majority of the posters who use that argument pay no taxes to the countries they are so much worried about. Hence my idea to ban that quasi argument.

      Nothing to do with Kosovan authorities who think the entire galaxy spins around them.

      Delete
  20. O.T. JU ON-TIME performance really far from where it needs to be for a boutique airline. Not a single flight departed BEG on time today!!! ....

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    Replies
    1. !!!!

      What happened my friend?

      Delete
    2. Ah yes, the usual "ALL FLIGHTS DELAYED, ALL FLIGHTS DELAYED" mantra followed with three exclamations... Authentic and correct as this guy's famous claims of cancelled flights to SVO.
      One can never be wrong with this sensationalist: the more exclamation signs in his posts, the less they have something to do with truth and reality.

      Delete
    3. To be honest, JU departures, at least the ones from BEG, are mostly punctual. And that's not surprise since they perform some 35 to 38 flights daily with 21 aircraft.

      Delete
  21. Breaking news: BEG doesn't reach 5M pax - it's Lufthansa's fault!!!

    Prime Minister of Serbian has just declared that it's LH's fault that Belgrade airport hasn't hit the 5 million pax milestone in 2016. It's all due to Lufthansa and its strikes this year.

    WOW.

    http://www.b92.net/biz/vesti/srbija.php?yyyy=2016&mm=12&dd=09&nav_id=1208347

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    1. this guy talks crappy stuff as always. passengers used the other offered alternatives while LH was on strike. the ceo of the airport is also out of his mind as he advised him to talk on that directon...

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    2. Hahahah this is as hilarious as his comment regarding pregnant women. Maybe, just maybe if JU had more night flights we would have hit that 5 million mark. Just sayin'.

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    3. There goes Anon 12:44 flaming the blog and trolling the discussion as usual.

      No, of course Serbian PM did not declare anything "LH's fault". What he did say is that BEG would have reached 5M if there wasn't for LH's strikes.

      Yes that is an utterly stupid thing to say but it does NOT say that something is "LH's fault". The "fault" is the interpretation and projection of anon 12:44 and this is why he used three exclamation signs to enhance his projection. The original statement of the PM - as stupid as it is - does not sound nearly as aggressive and intimidating as anon 12:44 wants to project with his creative translation and a lot of exclamations.

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    4. Prime-minister:
      1. BEG will not have 5 million this year. 100.000 deference is not just few passengers.

      2. Lufthansa passengers use alternatives. That is why other carrier, Air Serbia included would have much better LF to BEG this month.

      3. Even if non of passenger would fly on alternatives that was not more than 2.500 passengers in that 6 days. And that number is nothing for BEG.

      Let me remind you of genial statements of Mr. Vučić:

      - Belgrade airport will be bigger than Budapest in no time

      - Belgrade is the biggest airport in Balkans (but fact is it was 6th on that time, today it is 7th)

      - Even Athens does not have routes to USA and BEG will have those (fact is ATH has 6 routes to USA)

      - Air Serbia is bigger than all other carrier from ex YU together (Adria, Croatia, Trade Air, ECA, Limitless, Montenegro), and it is not even near to the truth

      etc.

      But this one is no 1 in his funny statements.

      Delete
    5. Smesno je da se sve sto neko kaze ili se nasalio mora objaviti i praviti se da je to kao ne znam ni ja sta.
      ATH ima samo sezonske letove a BEG ima preko cele godine letove za USA.
      I jos ne zmam zato se stalno mora o tome komentarisati.
      INN-NS

      Delete
    6. How many daily flights does LH have to/from BEG?

      Delete
  22. So PRN still fuming lol. If Skopje and Nis both managed to get LCCs without complaining then Pristina should too.

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  23. I'm not a supporter of the current government in any way but this policy is one of their better ones. The passenger growth speaks for itself really. I support that they continue with this.

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  24. Trebali su se vise potruditi da dovedu full service carrier kao sto su KL koji bi im doneo dosta toga ne samo LCC .
    Ali svakako su ostvari i tako dobre rezultate.
    INN-NS

    ReplyDelete