Macedonia to modify airline subsidy rules


The Macedonian government has adopted plans to launch a third tender for the granting of financial support to an airline to launch new routes from the country, following two failed attempts earlier this year. Tender procedures are expected to begin soon, however, the state noted that the terms and condition will be simplified this time around in order for a winning bid to be secured. Wizz Air was the only carrier to apply for the incentives during the previous two attempts, however, was rejected on both occasions due to alleged shortcomings with its application. A similar subsidy policy was enforced both in 2012 and 2015, with the no frills airline being the sole beneficiary.

In a statement, government spokesman, Mile Bosnjakovski, said, "This will be the third public call to choose an airline that will receive financial support. This time we eased the conditions, so the airline should establish two new routes from Skopje and two from Ohrid Airport by March 26, 2019. The previous deadline was January 10. The first two calls were unsuccessful due to the bidder's failure to meet the requirements of the tender procedure. We expect this third call to be successful in the interest of the citizens in order for them to be able to fully benefit from low cost flights". The three-year incentives program is valued at five million euros.

The Macedonian Minister for Transport and Communications, Goran Sugareski, noted, "These are good times for air traffic in Macedonia. We have a continuous increase in the number of passengers, we have an increase in the number of airlines operating to the country and an increase in flights compared to previous years, which gives us the right to expect that these figures will only grow further in the coming period". He added, "We will not give up on our strategic interests which includes the development of Ohrid Airport. In the coming months, we will continue to work in order to improve air traffic and provide both the general public and the business community with a wide network of destinations in accordance with their needs". Skopje and Ohrid airports handled a combined total of 2.019.205 passengers during the January - October period, representing an increase of 16.6% on last year. In October alone, the two welcomed 197.074 travellers, up 7.1%.

Comments

  1. The telenovela continues.

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  2. If this is paired with removing the requirement for a based aircraft and if the support can go to multiple companies, we might be in for some variety (aka better times).

    March 26th is still pretty tight though, especially since winter season ends on March 29th. Seems a bit random.

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    Replies
    1. Yes, why not just make it from the summer season onward.

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    2. I wouldn't be surprised if it's just incompetence. March 26th 2018 was the first Monday of S18.

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    3. Wizz Air has become too strong in SKP while the market isn't big enough for LCCs to dominate. W6 will be ruthless in defending its turf. I mean BUD or RIX weren't big enough for several players so I doubt SKP will be.

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    4. A new seasonal time table always starts on Sundays (time is moved from Sat to Sun night).

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  3. So, if I'm correct, an airline will no longer be required to have a base in Macedonia like it was required before?

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    Replies
    1. nobody has seen the text yet

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  4. Let's hope it's third time lucky.

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    Replies
    1. For who? Wizz Air or Macedonia?

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    2. The whole region!

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  5. Koja praonica loveeee

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  6. I dont want to go deep into politics but I doubt they are keen on giving money to a hungarian company after last week's scandal. (especially knowing that airline company had a somehow close relationship with mr.fugitive's gov. )

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    1. What scandal is that?
      Thamks for all info.

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    2. Google 'Hungary' and 'Macedonia'. Click 'News'.

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    3. Indicted former PM of Macedonia fleeing the country to Hungary where he has received asylum.

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    4. But what does that have to do with Wizz Air?

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    5. Nothing, but it just wouldn't be a good look giving it to them at the moment.

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  7. They said they would start the tender last week but nothing happened. I doubt they will start it this weeks either,

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  8. If they want someone other than Wizz to launch new routes they should just go into direct negotiations with them and offer them these subsidies. They don't need to have fake tenders.

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    1. That'd be illegal though.

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    2. explain illegal

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    3. Why would it be illegal? Macedonia is the first country I have ever heard that organizes a tender to give out subsidies. I mean local authorities that give out incentives to airlines just talk directly to an airline and give them the money if they agree to their terms.

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    4. EU regulations. I'd be interested in examples of the direct deals you're describing, sounds pretty shady.

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    5. so, is Banja Luka 's Ryanair affair then illegal ?

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    6. "explain illegal" you ask.

      Market Distortion
      https://www.investopedia.com/terms/m/marketdistortion.asp

      You're welcome.

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    7. Diskutabilno.

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  9. We will see how wide ranging these changes are. I don't understand because if they don't want Wizz Air to win the tender, why make all the requirements benefit only Wizz Air?

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  10. Why isn’t anyone else interested in the tender?

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    Replies
    1. basing an aircraft in the next 3 months .... bit tight dont you think?

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    2. I hope they get rid of that requirement in the new tender.

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    3. No one was interested in teh past either, the market is simply not there. Not worth fighting over with W6 for a market they are serving now. Also, W6 cutting routes and PRN booming are not rally boosting confidence all around.

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  11. I just don't get where the rift with Wizz occurred? I mean first you reject them because of an envelop, second time you reject them because they plan to start four routes from a holiday leisure destination in August instead of the middle of the dead season in January.

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    1. Maybe because Wizz flights to Macedonia are the former government's pet project. Just guessing.

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    2. I would imagine this gov't doesn't develop / maintain relationships the way the previous one did. Whatever that means. :)

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    3. I agree with above anon. I think Wizz had a very cozy relationship with the former administration and it didn't just include the subsidies they received through these tenders.

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    4. these routes are supposed to be year round so it doesnt matter when you start them (just look at VIE-OHD started this weekend). Even if the envelope was correct their offer woud have been rejected because they couldnt offer a based aircraft before August

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  12. If Wizz wants subsidies they should bring HIM back with the existing direct flight BUD-SKP

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    Replies
    1. Maybe they can't because the direct flight is sold out?

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  13. And where is TAV in all of this? Are they doing anything?

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    Replies
    1. Everything they ever did. Sponsoring PR to make them look good without actually doing anything positive. Just cashing in.

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    2. haha TAV. you will see in ZAG soon how TAV works :D

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    3. Well why would they? If the government in the country they are operating in is willing to organize tenders and give out cash to airlines, why would they be bothered to do anything other than cash in? They came to Macedonia, like with any other market, with the sole intention of making money.

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    4. Because they made a commitment to develop the market and did nothing.

      The gov't realized they hadn't put in proper control mechanisms to make TAV stay true to what they signed up for so they blinked first. And the beat goes on.

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    5. there should be an investigation how TAV won the tender.

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    6. @9:49

      + even more than that, there should be an investigation why and how they were let off the hook so lightly, including the Shtip airport commitment.

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    7. TAV is also providing incentives. This is a joint support mechanism with the Government.

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    8. I hope TAV management will work on bringing more legacies: Lufthansa, Air France, SAS..

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    9. @10:21

      Sure they are :))))))))))))))

      If it weren't for TAV's 'support', Ryanair would've already been flying from SKP.

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    10. @10:44

      Of course they are. Do you think its that easy to get 5 mio from a Government? The negotiations took more than a year to establish this joint support mechanism.

      Ryanair is a different case. They want to fly almost for free.

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    11. INI was smarter and quickly attracted 5 FR destinations and this definitely hit SKP and decreased its chances of attracting one of the biggest airlines in Europe.
      Ryanair are most likely to launch at least 3 more destinations to INI.

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    12. which are the 3 destinations? Overlaps with SKP or completely new ones?

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    13. Most likely ones: HAM, BVA & CIA

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    14. this would hit SKP realy hard

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    15. HAM, BVA & CIA are actually hardly 6 weekly rotations at SKP

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  14. I hope MK doesn't rely too much on W6.
    FR is currently expanding in KBP and SKP just missed the opportunity!!
    They launched Kyiv-Atina and Sofija yesterday and SKP was not included :(

    Ukraine is an extremely important market and I still wonder why the GoMK did not interfere and launch a route to the Ukrainian capital! Besides Kyiv has not one, but 2 international airports.

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    1. Wizz Air deploys 10+ a/c every year mate, KBP is just a random blip. It's happening all the time, everywhere.

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    2. bit random since Wizz is allowed to fly only UKR-EU

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    3. yeah INI - KBP and SKP - KBP are the biggest missed oppotunities for Wizz lol

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    4. Doesn't MKD have an openskies agreement with Ukraine?
      Windrose may fly to SKP
      Also Ukraine International or the new LCC SkyUp.

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    5. Anon 10.13

      Why are you bringing INI into this? Why not TZL or OSI while you are at it? So sad.

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    6. He'll probably stop when INI has no traffic again

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    7. A 14:46
      Coz INI is the direct competitor of SKP. They are quite close to each other.
      And no, not sad..this was once an airport with a traffic of barely 20 thousand per year and now almost on the track of half a million.

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    8. INI has 7 times less traffic than SKP- thats hardly a competitor.

      and as for this half a million, im sure you will read very soon that this will remain nothing more than wishful thinking

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    9. Why wishful thinking? Why do you feel so much hate and bitterness when it comes to INI? SKP is shedding frequencies and destinations as PRN is giving it blow after blow.

      INI will have at least 400.000 passengers this year.

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  15. Air Albania launching Zurich and Paris :)

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    1. I wouldn't be surprised if the government gives them subsidies to fly from Ohrid.

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    2. ajdee rekla kazala

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    3. :D
      I am sure the albanian part of the government is cheering for Air Albania. There is a reason why Wizz was kicked out of the previous tenders for nothing

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    4. and you have never read the tender rules i guess

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  16. Sure with changed conditions they will attract well known airlines like Alba Star, White Lines Airways, Orange2fly, Adria Airways, Air Koshketau, Borat Air...

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    Replies
    1. i spilled my coffee over the keyboard...
      (not fair to put JP in that league)

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  17. This is just going to drag on and on.

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    Replies
    1. It would be embarrassing if for the third time no winner is declared.

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    2. I think thats why they put it on hold. Especially after last mondays shock. I could imagine they are negotiating directly with airlines this time

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  18. Well it would be stupid for them not to change some of the rules if they failed to get an airline to meet those obligations.

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  19. What a never-ending story, losing all interest now - and I can imagine Wizz Air is probably getting tired too. I can completely understand that the current government is reluctant to support anything related to the previous administration (statues, ferris wheels, corruption, phone tapping - the list goes scarily on), but allowing Wizz Air in was one of the few things that did wonders for Skopje/Macedonia.

    Unless they are successful in courting Ryanair to take over all the routes overnight, it will be the public that suffers over this indecisiveness.

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  20. And in December they annul it for a third time.

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    Replies
    1. After the third time no one applies (because Wizz will probably give up) then they will say there is no interest for this kind of incentives and money will be used for something else.

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    2. Maybe they will use the money to set up their own national airline.

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  21. Does anyone know when the new tender will be issued?

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    Replies
    1. there were rumours for last week but thats obv. been delayed.

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  22. Instead of dealing with regional subsidies, why does't SKP try applying BEG's long-haul model and try to focus on far away / transatlantic destinations? JFK, YYZ/YUL/YVR, PEK, IKA, etc

    https://www.exyuaviation.com/2017/09/skopje-airport-to-support-transatlantic.html

    There will be huge demand for sure, similar to the Wizz routes.

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    Replies
    1. SKP is not as rich as BEG in spending tens of millions for something with less than crystal clear ROI. 5M/three years for a European expansion is their ballpark.

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  23. Wizz Air needs some competition in Macedonia.

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    Replies
    1. I hope we will see more choice from SKP and OHD soon.

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    2. hopefully its EasyJet or Norwegian

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    3. There is nothing to compete for.

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  24. Wizz should get a Macedonian AOC to continue benefiting from Macedonian tax payers.

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    Replies
    1. That way they could open flights to non-Eu markets from Macedonia like Russia and Israel.

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    2. What's hilarious?

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    3. @10:37 is.

      Entitled and disconnected from reality.

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    4. But what is not true? Who is funding these subsidies?

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    5. EKV, with their song 'Crno-bijeli svijet'.

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    6. Hmm yes, in the end you will say Wizz isn't even getting the money.

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    7. @tranquilizer poor music knowledge buddy ... you should stick to aviation

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    8. Funny. It's Prljavo Kazaliste, I just happened to be listening to EKV at the moment..

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    9. @11:56

      Indeed. As someone lurking around here I'm sure you've seen this statement thrown around a number of times, and not without a good reason.

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  25. Unless that government talks directly to airlines I doubt we will see anyone other than Wizz Air apply again.

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  26. What a sham this whole process has been.

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  27. they should give long term financial support to the air navigation for increased wages of employees and this decision should have positive impact for all airlines in macedonia.

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    Replies
    1. Especially given the composition of M-NAV employees and their spotless professional background.

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  28. Whenever there is a new government in Ex Yu you can bet they will attack any business deal that was done by the former one. And then you have all these NGOs that rabidly attack everything in the name of fight against corruption and justice bla bla ...only to mess things up.
    When there will be a regime change in Serbia i already know there will be a crusade against Etihad deal and Belgrade concession. Big cry - all deals will get suspended and of course Vucich and his crew will have to go to jail .Putting the former government in jail will even become a pre condition for EU-membership . Dont we live in good times ?

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  29. Why Bulgaria Air is not applying for it?

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