LCCs eye new Macedonian subsidies


European low cost carriers (LCCs) are assessing new opportunities in Macedonia as the country prepares to launch a tender later this month to stimulate budget airlines to introduce new routes to the country over a three-year period. It will be the third time that Macedonia will be offering incentives to no frills carriers, following the policy's success in 2012 and 2015, from which Wizz Air was the sole beneficiary. However, the exact terms and conditions of the upcoming tender are yet to be finalised. "A public call will be announced very soon, where all interested low cost airlines will be able to apply. They will receive state support for the launch of unserved routes. We are currently analysing the funding model and drafting the conditions of the tender", the Minister for Transport and Communications, Goran Sugareski, said.

Wizz Air is in prime position to apply and collect the latest round of state subsidies, which have been valued at 1.7 million euros. The low cost airline, which dominates in Macedonia with a market share of over 50% and with 1.8 million seats for sale from the country this year, has put a greater emphasis on Ohrid recently. This is in line with the government's policy to generate passenger growth at St Paul the Apostle Airport, with Mr Sugareski noting that the focus of the upcoming state support for LCCs will be on the development of traffic at Ohrid Airport. Apart from the planned launch of flights from Vienna to Ohrid this November, Wizz Air is also upgrading its seasonal summer service between London Luton and the lakeside town, which will now run twice per week throughout the year.

Norwegian Air Shuttle, which has been expanding rapidly over the past five years, said, "Macedonia is definitely of interest to us in the future. We always explore the possibility to add new destinations to our network. This is a very important market for Norwegian. We’ve had scheduled flights to the Balkans since 2004 and our presence and network has grown every year". The no frills airline currently maintains year-round services to Belgrade, Zagreb, Pristina and Sarajevo, as well as seasonal flights to Dubrovnik, Rijeka, Pula, Split and Tivat. On the other hand, easyJet has said it is unfazed by Wizz Air's expansion on the Macedonian market and will only launch flights to the country if there is sufficient demand. “easyJet is focused on its successful strategy to expand across Europe and operates in the best interests of the company and its customers ensuring the attractiveness of its network. This means the airline concentrates its efforts on maintaining and developing routes which prove popular with passengers. We consider competition only in regards of tactic opportunities that can be complementary to our strategy”, the airline said.

In 2015 Ryanair confirmed it would introduce flights to Skopje and noted it was negotiating with the Macedonian government over a range of routes. This was quickly followed up by Wizz Air announcing several new services to Skopje from Ryanair bases. Ultimately, Europe's busiest budget carrier shelved its plans to enter the Macedonian market. The CEO of Turkey's TAV, which runs Macedonia's two airports, Sani Sener, recently said that despite being a Wizz Air stronghold, there is room for more low cost players in the country. "Skopje is already a successful Wizz Air base, but we think there is considerable opportunity for more low cost operators", Mr Sener said. Commenting on Ryanair's shift towards the east, the airline's Chief Marketing Officer, Kenny Jacobs, noted last year, “It’s going to be more Ryanair and Wizz going head to head. It’s going to get harder [for Wizz], given our scale, our cost advantage, and our fare advantage. It’ll be an interesting scrap in the coming years”.

The Macedonian government has said that the upcoming tender to stimulate low cost airlines to launch new routes to the country will be fully transparent.

Comments

  1. I think this is a good policy. The subsidies are not too big but it will lead to new routes.

    ReplyDelete
    Replies
    1. This is totally against the concession agreement between TAV and Macedonia state. State is unfairly donating the airlines to reduce the concession fee and losing money.

      Delete
    2. TAV could be only happy about this.

      Delete
    3. Agree with anon 9.04
      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 past year except replace some secondary airport with more prominent airports.

      Delete
    4. Governments should not be allowed to distort the market. If Skopje and Ohrid want to attract airlines then it should come from their own pockets. They were given up for concession for a reason.

      Delete
    5. I think they did the right thing here. They managed to lure Wizz Air to base 4 planes and most subsidies have now expired. That's a good deal.

      Delete
    6. I have mixed feeling about this policy. I am happy that there are so many new routes from Skopje and this policy has revived the airport, created a completely new market and increased connectivity. BUT I think they should stop at one point. The market has to become self sustainable at one point.

      Delete
    7. For now the policy is working. The amount of money invested in the last 6 years is something like 10 million euros. Setting up a new national airline would have cost triple that amount at least.

      Delete
    8. This policy is one of past governments better ones. The passenger growth speaks for itself really. I support that they continue with this.

      Delete
    9. 10 mio in 6 years is not that much if we are being honest

      Delete
  2. Weren't past subsidies something like 5 million euros?

    ReplyDelete
    Replies
    1. Yes I think they have reduced them each time.

      Delete
    2. But is it 1.7 million for the entire 3 years or 1.7 million just for this year?

      Delete
    3. My understanding is that it is actually for each year for 3 years. So in total that is 5 million euros in total like the previous subsidies.

      Delete
    4. That makes more sense then.

      Delete
  3. Does anyone know what were the terms of the tender in the past? As far as I remember only Wizz Air ever applied.

    ReplyDelete
  4. "Apart from the planned launch of flights from Vienna to Ohrid this November, Wizz Air is also upgrading its seasonal summer service between London Luton and the lakeside town, which will now run twice per week throughout the year."

    Wow this is great news!

    ReplyDelete
    Replies
    1. Nice about London. They first operated this route year round, then they downgraded to seasonal and now year round again. Tickets can already be booked for winter.

      Delete
    2. It's good news but I don't know what makes them think that they will make it successful now during winter if they couldn't before.

      Delete
    3. where do you see this?? There are no tickets for winter season

      Delete
    4. Yes there is. You can book it on their website. In November there is return fare for just 50 euros :)

      Delete
    5. Yep they are bookable for me too in winter at wizz.com.

      Delete
    6. i just looked for it O_o. there arent

      Delete
    7. I can book them too. Don't know why it doesn't work for you.

      Here is a print screen for booking in January 2019

      https://image.ibb.co/nHdwhH/ohd.png

      Delete
    8. thats spooky!!! but thx and great news indeed!

      Delete
    9. Macedonia and Budapest were amongst the first winter 2018 destinations. I think W6 is scared of FR arriving to SKP/OHD.

      Delete
    10. @11:44 perhaps try deleting your browser cache and then try again.

      Delete
  5. I like that OHD might be getting some new traffic from these subsidies. I would like to see more Ryanair but more reasonable is EasyJet to start operating.

    ReplyDelete
  6. Good news. But I hope we finally see another airline using these subsidies. Wizz Air needs some competition.

    ReplyDelete
    Replies
    1. It will be Wizz Air again.

      Delete
    2. They are acting more and more like a monopolist. They chased away Ryan. I don't understand why the government doesn't allow another major LCC, even to compete on the same routes. It would benefit us passengers.

      Delete
  7. Norwegian would be a great addition in Skopje and could offer good connections to the US too.

    ReplyDelete
    Replies
    1. I don't see which route they could start that isn't already covered from Skopje by Wizz Air.

      Delete
    2. They can compete, W6 has become expensive on most routes.

      Delete
    3. The subsidies are only for unserved routes.

      Delete
    4. Well they can try Oslo - Skopje. I'm sure it would perform better than Sandefjord - Skopje. The airport Wizz Air flies from is 170KM from Oslo Airport!

      Delete
    5. Norwegian has a heap of basis they could operate from to Skopje that are not served by Wizz. For example Helsinki, London Gatwick, Madrid. Not to mention that they fly from main airports from places like Stockholm.

      Delete
    6. Agree with last anon. Barcelona has been surprisingly successful for Wizz in Skopje. A good opportunity for DY to try MAD-SKP.

      Delete
    7. In terms of service and friendliness DY is light years ahead of Wizz. I would love to see them in Macedonia. Even in Ohrid, they could try some flights from Scandinavia for tourists.

      Delete
    8. One of DY's biggest advantages is that it flies to primary airports.

      Delete
    9. Wizz Air is flying to more and more main airports from Skopje too. They just moved from Bergamo to Malpensa.

      Delete
    10. I think this airline will eventually collapse. They are expanding all over the place while the amount of debt they have accumulated only keeps on increasing.

      Delete
    11. There finances certainly are a shambles. They announced that they expects to lose 2.6bn NOK before tax in the first quarter of 2018, compared with 1.8bn NOK in the same period last year. Also Norwegian is buying so many planes that net debt is growing too. It is now 22bn NOK.

      Delete
  8. How about subsidizing Norwegian to start flights to JFK and ORD? ;)

    ReplyDelete
    Replies
    1. Didn't JAT do some charters from Ohrid to the US back in the day?

      Delete
    2. Can a DC10 land in OHD?

      Delete
  9. Macedonian government should sponsor someone like Ryanair to come to Skopje. That way we might have a fight between two LCCs like in Sofia and passenger numbers would explode while more and more routes would be offered.

    ReplyDelete
    Replies
    1. Bulgaria is a much larger market and can sustain two LCCs competing (although less and less and more routes are being suspended) so I don't think this is a realistic option for Skopje.

      Delete
    2. Routes in Bulgaria were suspended due different reasons than competition. Ryan have suspended some routes because of the shortage of pilots while Wizz Air have quit most of it's UK routes due to the Brexit which is going to happen next year.

      Delete
    3. Yes, but FR and W6 are "fighting" on the busiest routes such as MAD, MIL, FCO and BRU but in general both airlines offer different destinations where they don't compete directly such as LIS, DUB, etc.
      If FR penetrates MK market, they must select either a very busy route and new ones such as Israel, Jordan, Portugal. This is the only way it will work for MK.

      Delete
    4. when you compare W6&FR price out of SOF and W6 of SKP you become jealous how cheap they are

      Delete
    5. I'm assuming they are cheaper from SOF?

      Delete
    6. FR can't offer flights from SKP to Jordan or Israel. They can fly only to EU countries. Also Jordan is already covered by FR from SOF

      Delete
    7. FR can try initially with STN and DUB to SKP, I think DUB will work out well - 2 weekly.

      Delete
    8. why do u think DUB would work out?
      there is no significant Macedonian diaspora in Ireland

      Delete
    9. Because it's becoming a more business and study place especially after Brexit. Many Croats are now there.

      Delete
    10. cheap flights (and they dont charge for visas) can boost tourism

      Delete
    11. You can't really compare Macedonia to Bulgaria. Both Wizz and Ryan have 2 bases there. Wizz in Sofia and Varna, while Ryan have in Sofia and Burgas. Total amount of based planes: 13 - Wizz 9 planes, Ryan 4 planes.

      Delete
  10. Итс гоинг ту би Уиз Ер аген. Браво Скопие!
    Уиз Ер ньо капитал оф Македонja

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

    ReplyDelete
    Replies
    1. TAV has some incentive program too. I don't know if they qualify for that.

      Delete
  12. Great news for Ohrid. I think we might see a few new routes by Wizz there next summer.

    ReplyDelete
    Replies
    1. OHD is booming and well deserved. Is it a rich region compared to other parts of Macedonia?

      Delete
    2. Not really. Skopje region and Southeast (Strumica, Gevgelija, Valandovo) have higher than average GDP. These are the latest available data from regional MK GDP
      http://www.stat.gov.mk/pdf/2017/3.1.17.06.pdf

      Delete
    3. We can open airport in Gevgelija and attract casino moguls :D

      Delete
    4. casino moguls and tomato shipping :D win-win

      Delete
    5. Thanks, the report is nicely made. So basically, it's the part next to Greece, makes sense. It's the same with Bulgaria, the capital and south.

      Delete
  13. Pristina won't be happy at all.

    ReplyDelete
    Replies
    1. If Skopje and Nis both managed to get LCCs without complaining then Pristina should too. They tried complaining to the EU and they got turned away.

      Delete
    2. PRN has a very nice mix of legacy, hybrid LCC and ULCC such as W6. Reminds of TIA which is one of the few Balkan cities served by BA.

      Delete
    3. Exactly. PRN should focus more on lowering fees and attracting LCC if it wants to be competitive rather than complaining about others.

      Delete
  14. What sort of attitude is that from easyJet? I don't understand that they don't see any interest in serving Macedonia. Together with Bosnia it's the only market they don't serve in ex-Yu.

    ReplyDelete
    Replies
    1. It could have something to do with the fact that easy Jet is pretty much Greek owned. Or at least owned by a Greek guy ;)

      Delete
    2. There was a nice lineup of easyjet planes in Skopje last month when Kavala Airport was closed because of bad weather and they couldn't land in Thessaloniki because of runway reconstruction.

      Delete
    3. Here is a photo :)

      https://image.ibb.co/cAyexc/28424033_1823406937671426_4660499903203568625_o.jpg

      Delete
    4. Nice! Tnx for the photo.

      Delete
    5. Easy Jet already flies to Pristina. That's the problem.

      Delete
    6. So? Wizz flies to Skopje but they also fly to Pristina too.

      Delete
    7. Wizz are LOL-ing at Easy Jet for letting them a cash cow like the Switzerland-Macedonia market

      even Germania Flug has 5 weekly ZRH flights

      Its the moment when politics made you dumb and stuborn

      Delete
    8. Amen to that last anon

      Delete
    9. U2 also doesn't serve Romania, which is very strange.

      Delete
    10. Wow I didn't realize that. Strange indeed.

      Delete
    11. Anyone knows why? Did they fly there before and then stopped?

      Delete
    12. Yes, they flew OTP-LGW in 2013 but dropped it 2 years later. Not sure why.
      Oddly enough, the SOF route was much more successful especially in winter. They also launched VAR last year. I think SKP has chance indeed to launch GVA or LGW.

      Delete
  15. Much better than wasting money into a national airline.

    ReplyDelete
    Replies
    1. A national airline has its positive sides too. It can serve routes that Wizz can't - like to Russia for example. It employs locals and the money stays in the country and also you don't have the risk that they will pack and leave, which Wizz can do at any point in time.

      Delete
    2. Wizz employs locals too.
      At least on BTS-SKP-BTS the crew is always Macedonian + the pilots/1st officers are also from the region.

      Delete
    3. cabin crew is Macedonian on any SKP basec aircraft. same for TZL (Bosnian)

      kudos to both. they are doing their job great!

      Delete
    4. If only so many resources would be put into joining the EU, which would enable any airline to fly virtually any route. Open market is always better for customers.

      Take a look at SOF... EU capital, with higher salaries, a lot of foreign investments in the country, and yet ticket prices are lower than in SKP (as somebody above mentioned). This is what open market and competition does to prices...

      But of course, you are not a proper exyu country if you don’t have a loss-making national carrier run by political-affiliated people who couldn’t get work in a private company.

      Delete
  16. Good news but Macedonia must allow new players in the market.

    ReplyDelete
  17. I would love to see Transavia start flights to Macedonia. Also I think there is potential for Ukraine International to launch seasonal flights from Kiev to Ohrid.

    ReplyDelete
    Replies
    1. Air Baltic to Ohrid too.

      Delete
    2. Transavia is a good one!

      AMS over EIN any time

      Delete
    3. Transavia was flying to OHD before it was meant to be cool.. I remember they were flying AMS twice weekly in the early 2000's. In that period also good old MAT was flying OHD-AMS.
      Hope some of both are back one day.

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

    ReplyDelete
    Replies
    1. LOT from 1st June.

      Delete
    2. Aegean should come too.

      Delete
    3. forget about the hypocrites

      Delete
  19. LCCs that would fly to Pristina but don't because of high fees should consider the opportunity for subsidies. SKP growth has much to do with the Kosovo market and is not purely generated from the local demand.

    ReplyDelete
    Replies
    1. Umm Pristina has more LCCs than Skopje. Apart from Wizz it has Norwegian and easy Jet. It is true that PRN is not an airline base but from what I see more LCCs are picking Pristina over Skopje.

      Delete
    2. Kosovo has similar routes as Skopje (Stockholm, Malmo, Oslo, Basel, Zurich, London etc)

      Delete
  20. This might be an opportunity for Eurowings again.

    ReplyDelete
    Replies
    1. Eurowings has become so unreliable. And they were already selling tickets to Skopje and then stopped. I hope they DON'T come back.

      Delete
    2. Maybe Lufti SKP-MUC daily with a CR9 would be a better option?

      Delete
    3. i see more chances for FRA tbh

      Delete
  21. Easyjet must be very stupid if they don't use this chance. They missed so many cash cows like Basel-Skopje beacuse of irrational nationalism (druven by the greek origin of its owner).
    By the way for all moaninig about Swiss in Skopje, Edelweiss flies this season 7 p/w plus Germania operates 6 p/w on Zrh-Skp.
    Yesterday my mom was flying Germania to Zrh with A321 and there were 208 pax on board.
    As destinations that could be launched I would propose:
    SKP-AMS
    SKP-HEL
    SKP-MAD
    SKP-MAN
    SKP-LYS
    SKP-LIS
    SKP-TLV
    OHD-CGN/DUS
    OHD-AMS
    OHD-CPH/MMX
    OHD-GOT
    OHD-HEL
    OHD-VCE/TSF

    ReplyDelete
    Replies
    1. Yeah ... I highly doubt easyJet is staying away from SKP because the founder is Cypriot. They've only started expanding in Belgrade now meaning the whole region, with the exception of the Croatian coast, was not their priority.

      Delete
    2. sorry but they started PRN years ago. they know about the region and the gastarbeiters in SWI

      Delete
    3. So? How long did it take them to seriously dedicate themselves to BEG? easyJet is not the most adventurous airline out there.

      Wizz entered this market much earlier because they had to.

      Delete
    4. i think you should know that flights from germania and edelweiss in skp airport are organized from travel agencies (from kosovo) air prishtina and kosova arlines (flyksa)

      Delete
  22. think that more focus for year round flights should be put on SKP and many seasonal routes should be add from OHD for tourists even tough tourists are visiting SKP much more than OHD. Anyway here are some of the routes that i think some LCC should start after the subsidies:
    Wizz air (Lisbon, Tel Aviv, Dubai - Al Maktoum, Bari, Bologna a d i think Moscow - Vnukovo

    ReplyDelete
    Replies
    1. darling, Wizz can only launch EU-routes from SKP or OHD

      Delete
  23. also for wizz Sofia and BUcharest should work good for them
    Ryanair (Dublin, Madrid, and maybe Nice seasonally)
    Easy jet ( Geneva, Basel and London Gatwick are more realistic)
    Norwegian (Oslo - Gardermoen, Helsinki, and obviously if they won the subsidies they should start flights to New York and Chicago)
    Eurowings (maybe Vienna or Munich, Stuttgart)

    ReplyDelete
    Replies
    1. Wizz: SOF can be daily and OTP x2
      Ryan: DUB x2, MAD x2, LGW daily, Nice - I don't think it can work
      Easy: I don't see them coming
      Norwegian: Oslo 3x, HEL - I don't think there is really big demand
      Eurowings: Stuttgart 2x, Vienna -possibly, and Munich - I don't think they will launch it

      Delete
  24. I'm surprised that so many LCCs flies to/from SKP. Hoping that soon we'll see return of LCCs to ZAG :)

    ReplyDelete

Post a Comment

EX-YU Aviation News does not tolerate insults, excessive swearing, racist, homophobic or any other chauvinist remarks or provocative posts with the intention of creating further arguments. A full list of comment guidelines can be found here. Thank you for your cooperation.