Macedonian government mulls fresh LCC subsidies


The Macedonian government is likely to continue offering subsidies to low cost carriers as the current three-year agreement with Wizz Air is set to end in late 2022. At a recent cabinet meeting, the government discussed the possibility of launching a new tender next year. It would mark the fourth consecutive time the state has offered subsidies for the launch of new routes, with all three previous tenders won by Wizz Air, which was the only one to apply for the financial assistance. The current subsidy contract had to be halted last year after Wizz Air was unable to deliver on the agreement as a result of the coronavirus pandemic. However, the budget airline is set to expand operations from its Skopje base with the stationing of a fifth aircraft and the launch of three new routes from mid-December. Furthermore, it will add a new destination from Ohrid as well.

The operator of the country’s two international airports, TAV Macedonia, has endorsed the policy. “State subsidies for low cost airlines were one of the foundations of growth and prosperity on the Macedonian aviation market prior to Covid-19. As an airport operator, we have supported this model from the very beginning of its implementation, because we believe this is the right tool for emerging markets, such as the Macedonian one”, Metin Batak, the General Manager of TAV Macedonia, recently said. He added, “Government subsidies, along with our efforts to attract new airlines, have resulted in a fourfold increase in passenger traffic within ten years, from 2010 to 2020. New destinations that were launched in the past ten years created a completely new category of passengers, who previously did not even consider air transport as an alternative to land transport. Therefore, we will continue to support government subsidies for low cost flights and continue to invest our global knowledge and skills in order to attract new airlines and expand our network of destinations from Skopje and Ohrid airports”.

On the other hand, Pristina Airport and Austrian Airlines have previously complained about the policy. The Austrian carrier said the subsidies provided by the Macedonian government to stimulate low cost airlines to operate flights to the country were unfair and distorted competition. At the time, the carrier noted it was difficult to compete in such an environment and under such circumstances. Pristina Airport had requested for the European Commission to investigate state subsidies offered to low cost airlines operating out of Skopje. Pristina Airport's General Manager, Haldun Fırat Kokturk, previously said, "We, as an airport operator, can compete with another airport operator - competition is normal, it is good. But we cannot compete with a government”. In its 2020 progress report on North Macedonia, the European Commission noted, “The financial incentive scheme for Skopje and Ohrid airports that grants financial support to domestic and foreign airline companies needs to be revised to confirm that it complies with the EU State aid acquis and the SAA [Stabilisation and Association Agreement]”.



Comments

  1. Anonymous09:02

    Meanwhile Wizz is suspending six routes from SKP from mid November to mid December.

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    Replies
    1. Anonymous09:05

      It was already written here. They are suspending flights from many bases.

      Delete
  2. Anonymous09:06

    With easyjet launching flights to SKP, hopefully they apply for the next tender.

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    Replies
    1. Anonymous09:15

      It is question will easyJet survive this winter

      Delete
    2. Anonymous10:52

      I dont think they will survive as Wizz Air plans to operate 10 times a week to Basel this winter, and many people are used to go to Geneva with a flight to Basel and then take a train / bus, same with Zurich. But if you check the website of easyJet, you will see that the planes are already fully booked.

      Delete
    3. Anonymous11:21

      The terms and conditions of the tender make it difficult for anyone to compete against a Wizz offer.

      Delete
    4. Anonymous12:08

      yeh right difficult ... to base one aircraft ... very difficult

      Delete
    5. Anonymous15:47

      For an airline basing a plane in a very low income country having a cost base of a very high income country is not a walk in the park, don't you think?

      Delete
    6. Anonymous17:36

      lol thats not under terms and conditions of the tender

      Delete
  3. Anonymous09:07

    Slovenia and Montenegro should have adopted this policy too.

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    Replies
    1. Anonymous09:48

      Why? Montenegro did ne carrier immedietly but in slovenia they don't want lcc as base. Because we need flights directly to fra, cdg and all airports like this, not the lcc airports.

      Delete
    2. Anonymous11:07

      Because it would have cost Montenegro less, while they would get more in return.

      Delete
  4. Anonymous09:18

    I can't blame PRN airport and Austrian for the critics. This just shows how heavily dependent SKP is to Wizzair and traffic is just because of the subsidies instead of being organic similar to SJJ or PRN.
    Plus, if NMK joins EU one day, not sure if it will still be legal to continue with them subsidies....

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    Replies
    1. Anonymous11:15

      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.

      Delete
    2. Anonymous12:10

      in the meantime VIE is giving more to Wizz then Macedonia ... funny.
      also PRN is giving incentives...

      Delete
  5. Anonymous10:01

    Let me guess, Wizz Air will get the money.

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  6. Anonymous10:02

    Let's hope it results in more new routes

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  7. Anonymous10:03

    What else can be launched by LCCs from SKP?

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    Replies
    1. Anonymous10:44

      Prague, Madrid, Ljubljana, Tel Aviv and Kyiv by Wizz Air since Windrose terminated SKP flights last week.

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    2. Anonymous11:06

      It has been mentioned a million times. Wizz Air can't launch flights to non-EU markets such as Tel Aviv and Kiev unless it is Switzerland, Norway and UK.

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    3. CDG by easyjet if they are successful! Fingers crossed!

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    4. 👍👍👍

      Delete
  8. Anonymous10:04

    More regular airlines with flights to actual hubs please.

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    Replies
    1. FRA, MUC, CDG, FCO, AMS...pls! These would be life savers for travel within Europe and beyond! Even SAS is good just give SKP and OHD the options!

      Delete
    2. Anonymous13:07

      Wizz air may change Frankfurt Hahn to FRA and Champino to Fiumicino, they already flew to FRA from other bases before the pandemic and they still fly to FCO, lets pray that those two will be changed. LH cant launch SKP flights since Wizz Air flies to 11 routes in Germany, and we already have LOT, Austrian, Edelweiss or Swiss and Turkish Airlines and that is enough for transit passengers for America, Africa and Asia. And i think that there isnt much demand from Skopje to Paris, since Wizz Air flies only twice a week there or once with the restrictions. Amsterdam is good option maybe Transavia or KLM can launch flights. Eurowings announced route from Munich to Skopje but the tickets were removed from sale soon after the route was announced.

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    3. SKP is the only city in the balkans not served by LH!.... So disappointing!

      Delete
  9. Anonymous10:35

    Garant opet dobija Wizz. Da se kladimo u 100 evra.

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  10. Anonymous11:09

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

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  11. Anonymous11:15

    Of course TAV supports the policy. They don't have to lift a finger yet they get the traffic.

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    Replies
    1. Anonymous11:22

      Bingo!

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    2. I kind of hope the the government will drop TAV and maybe go with FRAport if they have the option... I mean when you look at LJU they already brought major European carriers like AF, LH, KL, BA... and only SKP has wizz and a few others!

      Delete
    3. Anonymous12:20

      but they have alone more then 30 routes ...

      Delete
  12. Anonymous11:16

    So I'm guessing the government is no longer interested in setting up a national airline?

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    Replies
    1. Anonymous11:19

      It has been ruled out for a while now
      https://www.exyuaviation.com/2019/12/macedonia-rules-out-new-national-carrier.html

      Delete
    2. Anonymous11:19

      It would cost ten times more than these subsidies while the result would be questionable.

      Delete
  13. Anonymous11:17

    How much are the subsidies?

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    Replies
    1. Anonymous11:23

      I think around 3.5 million EUR for 3 years.

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    2. Anonymous16:41

      Thats peanuts .

      Delete
  14. Anonymous11:21

    Ryanair said recently it was interested in opening many new bases across Europe due to the number of planes they are getting. I'm hopeful they revisit their plans to open a base in Skopje which is what they wanted to do seven years ago until they were chased out by Wizz Air.

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    Replies
    1. Anonymous11:23

      Fingers crossed!

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  15. Anonymous11:22

    I think this strategy has been rather successful for MKD so I support it, especially in these sort of circumstances.

    ReplyDelete
  16. Anonymous11:24

    Plans for 6th plane by Wizz?

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    Replies
    1. Anonymous12:12

      why not and what should they do with their planes

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    2. Anonymous16:42

      I know where they could send their new planes to but that isnt todays topic ...

      Delete
  17. Anonymous12:18

    one possibility: Ohrid could become a Wizz base (they dont need to launch many new routes for that) and that will free up space for new routes from Skopje. win-win for both.

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    Replies
    1. Anonymous13:09

      Correct! Wizz Air can launch Ohrid - Warsaw, Katowice and Poznan service as well as flights to another Swedish destination, Eindhoven in Netherlands, Charleroi and two other routes in Germany. There is demand for these routes at least during the summer.

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    2. This comment has been removed by the author.

      Delete
  18. Anonymous12:47

    low cost destinations that could be launched by Wizz from SKP: LJU, PRG, MAD, KRK, SPU, Ancona, Bergen ... LPL(WizzUK)

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    Replies
    1. Anonymous13:10

      Yes, i think LJU, PRG and MAD are comming with the next tender.

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    2. Anonymous16:45

      But even bigger airports in the region dont have flights to Madrid ...

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    3. Anonymous17:32

      irrelevant.
      it was the same situation for BCN. look at Bologna or Turin

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    4. Anonymous21:55

      Which is the proof that without subsidies Wizz can not fly profitable from Skopje and not even from much bigger airports.

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    5. Anonymous10:00

      LOL Bologna, Turin and Billund were launched without subs. Subs for a route expire after 3 years.
      trolls gotta be trolling

      Delete
    6. Anonymous18:17

      If Wizz have launched destinations from SKP without subsidies, why is government thinking about wasting taxpayers millions on new subsidies? Is Wizz forcing them by giving government mafia-style offer they can't refuse - give us more subsidies or we'll base new planes somewhere else?

      Delete

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