Macedonia launches third airline subsidy tender


The Macedonian Ministry for Transport and Communications has, for a third time this year, relaunched a tender for the granting of financial support to an airline for the introduction of new routes. Two previous attempts at awarding the financial stimulus were annulled. On both occasions, low cost carrier Wizz Air, which has benefited from similar incentives between 2012 and 2018, was the only one to apply. However, the Ministry noted that the airline first failed to clearly write its name and address on the submitted envelop, while on its second attempt it refused to introduce new routes from Ohrid immediately and instead planned to do so from next summer season, which was contrary to the tender brief at the time.

The newly offered incentives will be provided to the winning airline between 2019 and 2022. Those applying must have carried at least ten million passengers in 2017 and recorded a net profit of 25 million euros. The selected airline must establish and/or maintain a base with at least one aircraft in Skopje or Ohrid by March 26, 2019 at the latest for the duration of the financial support program. Furthermore, the carrier in question must launch at least two new routes from Skopje by March 26 and four new routes from Ohrid, the first two by late March 2019 and the rest within a year of being granted state support.

The newly launched routes from Skopje and Ohrid cannot be served from the other airport and cannot have been served over the past two seasons. In addition, every new destination introduced at Macedonia's two international airports must be run at least twice per week throughout the year. Applicants are free to introduce additional new services, with the Ministry noting that the winner will be chosen based on the number of new destinations proposed. If two carriers commit to the same number of routes, the winner will be determined based on the number of frequencies.

The financial support includes a one-time payment of 40.000 euros for each new route launched, as well as nine euros per passengers for each new destination from Skopje for the first year, eight euros during the second year and seven during the third. On the other hand, the carrier will receive thirteen euros per passenger during the first year of operations on a new route out of Ohrid, twelve during the second and eleven euros per traveller in the third year. Commenting on the tender, Wizz Air's CEO Jozsef Varadi, told EX-YU Aviation News last week, "If the government decides to launch a bid for a new process, we would certainly consider it and we would likely apply because we are the incumbent carrier".

Interested airlines have until December 21 to submit their bids.

Comments

  1. What excuse will they think of this time to annul tender?

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  2. Good luck to Wizz Air.

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  3. Well now the tender is perfect for W6. They got everything they wanted.

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    1. No actually. In the last one they said Wizz wanted to start flights from Ohrid in high season (I think they said July or August). Here they are asking for two new routes by 26th March. So same problem as last time (although last time they asked for 2 new routes from OHD by early January in the middle of winter which was ludicrous).

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    2. I see, interesting. But if they annul it again, eventually they will get to launching routes from Ohrid in August :D

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  4. Third time lucky.

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  5. It's obvious that those claims that the tender is being fixed for Air Albania we're completely false.

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  6. This is turning into such a messy affair.

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  7. observations:

    - they changed one requirement: from two years to two IATA-seasons, that paves way for example PRG to be one of the destinations
    - I dont see how Wizz can start two routes out of Ohrid til late of March when they obv can do it as early as August, this was the reason the previous tender got annuled two months ago. bit sceptical about this one

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    1. Wizz barely has flights to Prague.

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    2. Wizz didnt flew to Basel either

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  8. What's the point of this tender? Just give it to Wizz Air. Which airline in their right mind will base a plane in the next 4 months time? If you are making a tender for Wizz to win, what was the point of the entire farse with the annulments?

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  9. I don't get how this process was quite easy and quick in 2012 and 2015 and now it is taking half a year to complete.

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    1. ask that guy in BUD ( lemme tell you how the first tender looked like, one of the requirements was flights to Spain or Portugal, Wizz won that tender with no flights to Spain or Port, similar to TAV winning the tender for airports and no Stip cargo in the end.... criminal banda)

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    2. So the problem is the new government wants to be transparent and follow procedure.

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    3. Comment at 9.42 on point +100

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  10. I'm still hoping that magically either Ryan or easyJet apply. It would be great for Skopje Airport.

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    1. Don't hold your breath.

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    2. I would love to see a legacy airline like Turkish apply for this. They wold have no problem basing a plane at such short notice and they could really do wonders for the market.

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    3. They wouldn't have rights to fly fifth freedom to other European destinations.

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    4. If TK wanted they could register an airline in Macedonia and make it a Macedonian national airline. They are powerful enough to persuade the government to give them support and TAV would give them everything for free at the airport anyway.

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    5. They chose Albania in the end.

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    6. What a 'success' that has been... It will end up like B&H.

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  11. TAV really needs to get its act together. Regardless of these subsidies and their outcome, there are no new routes announced from Skopje next year.

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    1. They should work to attract Lufthansa.

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    2. +1
      A new airline (or new routes) are necessary. Growth will soon slow to 2 or 3%.

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    3. Agree with @10.21. It would be nice to see Lufthansa at least seasonally from Munich and Frankfurt, like they will start Tivat.

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    4. As said previously, they wanted to start flights through Eurowings last winter but cancelled them because of poor sales.

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    5. They should also try to attract SAS and Air France.

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    6. BA would be welcome too.

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  12. So what is the total value of the subsidy?

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    1. €5 million

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    2. That's good. The subsidies are not too big but it will lead to new routes.

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    3. Maybe if they gave a bit more money there would be more bidders.

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    4. They've offered more than enough. Let's say they open 4 routes and handle around 130,000 passengers on those 4. That's already 1,170,000 euros in the first year plus the one off payment of 40,000 euros.

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  13. Does anyone know which routes Wizz proposed at the last tender they applied for?

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    1. I hope for SKP-MAD.

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    2. In my opinion potential routes are MAD, OTP and LIS from Skopje (they will only launch two from SKP). And from Ohrid maybe KTW, SOF and AMS...

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  14. They have given less time for airlines to apply this time around. Less than a month.

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    1. Considering absolutely no one is interested other than Wizz Air I don't see why they would need more time.

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    2. Great. I'm happy that that there are only 10 days more left of the tender, so we will see the benefits of it very soon.

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  15. People are going to throw rocks and stones at me for saying this but I think this shows the state of the Macedonian aviation market and it does not paint a pretty picture. Government has been handing out money for new routes for 6 years (and plans for another three). It has organised four tenders up until now (this is the fifth one). Only one single airline has ever even submitted an offer to these tenders (Wizz). So what does it say about the market if airlines, particularly low cost, are not even remotely interested in these subsidies or starting flights to Macedonia, be it with state support or without. And reading that interview with Varadi, I don't think for a second he was bluffing when he pretty much said there would be no market in Macedonia with these subsidies or that they would consider very hard if they would launch new routes without them.

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    1. thats why they commited to base two additional aircrafts and 12 new route out of SKP&OHD in the first annuled envelope-tender...

      What you're trying to say is can a second lowcost airline exist parallel to Wizz? Probably only on few certain routes. Remmember what Wizz did when they found out Ryan was sniffing around, they opened the routes by themselves

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    2. Other airlines are not applying because it is very difficult to compete against Wizz Air at this point. My guess is they will have a 70% share in passengers this year which is huge for any European market.

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    3. Also worth noting that the current tender is made that way that really limits anyone other than Wizz applying. No airline will instantly open bases in SKP and OHD as they request. So it will be Wizz with one base in SKP already and operations in OHD.

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    4. a 2.3 mio market is not good enough?

      The thing is everybody else underestimated the MK market and now its too late to catch up with Wizz. Wizz is in no urge to open new routes and can relax and wait for money. like a spolied singleton

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  16. It's great that they are including Ohrid too. So Wizz will open a base there if they win.

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  17. Will it work this time or will they annul it again? The soap continues.

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    1. I think Wizz will win this time and they can start implementing these new routes from the new year.

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  18. If these routes launch as planned next year, what sort of passenger growth could we see at Skopje Airport?

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    1. My guess is around 15%. Skopje will also see nice growth for first few months of next year thanks to bigger capacity aircraft - 2 A321s from Wizz which have been based there since May.

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    2. forget it. the growth in winter season so far is around 5%. 15% means one aircraft and 6 routes for the whole year

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    3. Well if they get new subsidies, my guess is that Wizz will base a sixth plane in Skopje.

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    4. Sorry I meant fifth plane.

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  19. I personally think SKP is kinda lost in space and needs to find a direction and a clear strategy of what it wants.
    The Turks came, they fixed the airports and the government gave money to the Hungarians.
    The Hungarians became greedy and want more, but Macedonia is not Switzerland with eternal bank accounts.
    What Skopje needs to do is to consult with more experienced cities such as Belgrade or Dubrovnik when it comes to launching new routes or long haul.
    The idea of this persistent LCC mentality is toxic. Macedonians desereve a decent and first class product and not anothe typical regional gasto airport. The Macedonian needs to travel and explore NEW places.

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    1. The world of full of entitled people with no money to show for their hard opinions...

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

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  21. Hope it is successful this time.

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  22. Has anyone noticed that Wizz Air has an absolute monopoly on every single route from Skopje and Ohrid? Why? Because they have a deal with TAV not to go head to head with any airline. This includes them not launching any route that would compete with legacy. That's why there is no Skopje-Vienna but Ohrid-Vienna. And I'm not making this up. The former CEO of TAV Macedonia who is now on the TAV board publicly said so himself.

    This is really bad because as Wizz become ever more expensive, they will do little and have done little to decrease fares by other airlines.

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    1. Wizz is expensive in high summer and Christmas (they cannot sell only 10 EUR tickets...), otherwise dirt cheap, stop yelling

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  23. By the way, does anyone know why the base in Skopje only employs ethnic Macedonians, even tho the majority of the passengers flying with wizz from Skopje are Albanians (from Macedonia and Kosovo). I’ve flown Malmö-Skopje loads of times and never had an Albanian flight attendant.

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