TIA suggests presence of home-based low-cost airline

Tirana Times
By Tirana Times February 6, 2015 09:50

TIA suggests presence of home-based low-cost airline

Story Highlights

  • “It is easier to carry passengers from home rather than have a slot in different and busy airports across Europe. Albania needs a home-based carrier to balance the requests with the needs of the small market,” says TIA CEO Rolf Castro-Vasquez

TIRANA, Feb. 4 – One year after the bankruptcy of Belle Air company which controlled more than half of the Albanian market, the Tirana International Airport, Albania’s only international airport which since 2005 has been managed by a private consortium under a 20-year concession contract, has recommended the presence of a home-based low-cost airline.

Rolf Castro-Vasquez, the Chief Executive Officer of TIA, says such an airline would facilitate flights and give extra services to Albanian passengers, especially to non-niche destinations.

“It is easier to carry passengers from home rather than have a slot in different and busy airports across Europe. Usually low-cost airlines have a clear view of their schedule for at least the following two years. Albania needs a home-based carrier to balance the requests with the needs of the small market,” he says in an interview published on TIA’s website.

Asked about TIA’s reportedly high charges, the airport executive said “Tirana International Airport applies moderate charges for ground handling for airline companies, but I would not consider these charges as high as often claimed.”

“The charges applied to an airline company by TIA constitute a maximum of 15 percent of the total cost that the airline has to spend for a route and destination. It is obvious and must be stressed that this percentage cannot determine or influence the air ticket price offered by an airline company; there are other determining factors that define directly and indirectly the total ticket price, such as the internal airfare policy of the airline company, and includes destination airport charges, fuelling, aircraft maintenance charges, crew and staff, marketing and other related costs,” he says.

TIA is also concerned over what it calls the discriminatory the 10 Euro border tariff that is still applied on the air ticket as this affects the total ticket price.

“This is a discriminatory tariff as it is levied on air passengers only, whereas passengers crossing blue and green [sea and land, respectively] borders are excluded from such a tariff. The 10 Euro border tariff is collected by the Airport on behalf of and for the benefit of the Albanian government. This tariff, we suggest, should be removed,” says Castro-Vasquez.

By contrast, in neighbouring Macedonia the government pays a subvention for each incoming tourist at the airport in order to promote tourism which TIA officials say explains the low air ticked prices offered to passengers there.

Almost one year after the bankruptcy of Albania’s Belle Air which controlled more than half of the Albanian market, Italy’s Alitalia and its Air One subsidiary have gained control in the Albanian air transport market.

From a market share of only 9 percent at the end of 2013, Alitalia, which has now phased out its Air One brand, has increased its market share to around 40 percent, reports Italy’s ANSAMed agency.

While several new airlines have entered Albania after the bankruptcy of Belle Air in late 2013, ticket prices to European destinations remain high for a country such as Albania where GDP per capita is among the lowest in the region. The bankruptcy of Belle Air, which had a market share of around 50 percent and was considered a monopoly, temporarily lowered ticket prices especially because of the entrance of new carriers targeting to gain market shares. However, tickets to European destinations, mainly Italy, where most Albanians travel, are back to their previous levels ranging from 100 to 150 Euros for a single ticket.

Experts and airline carriers blame the situation on the high tariffs charged by the Tirana International Airport (TIA) concessionaire, which has been in charge of the airport since April 2005 under a 20-year concession contract.

The tariffs are considerably higher compared to regional countries and even some EU countries.

With ten years having already operated TIA, the concessionaire retains the exclusiveness of international flights in Albania which is barrier for the opening of new airports in Albania.

Since April 2005, the airport has been managed by TIA, a consortium led by Germany’s Hochtief AirPort GmbH (HTA), one of the leading private airport investors in the world, which has won a 20-year concession to be in charge of the airport’s activities.

However, in May 2013, Germany’s Hochtief, which has majority stakes in leading airports in five countries, including Albania’s Tirana International Airport (TIA) sold its shares to Canada’s Public Sector Pension Investment Board (PSP Investments) for Euro 1.5 billion.

Tirana Times
By Tirana Times February 6, 2015 09:50