TIRANA, Feb. 3 – The Albanian government seems to have finally reached a deal with the Tirana International Airport concessionaire over lifting its exclusive rights on international flights that would pave the way to the construction and operation of new airports and reduce current ticket prices, estimated among the region’s highest.
The deal although not officially confirmed by the TIA concessionaire was announced this week by Economy Minister Arben Ahmetaj in a repeated promise by government officials who have been having tough negotiations with TIA officials since last year.
“Exclusive rights have been lifted for a distance of 100 km. In this way, the Vlora and Kukes airports can be international. Starting this month, we expect bids from renowned international companies to build airports,” said Ahmetaj speaking at a parliamentary commission where he introduced the 2016-2018 programme of economic reforms.
The minister said the deal is pending approval by the concessionaire’s board of directors.
A spokesperson for the airport did not confirm the deal but said negotiations were on track.
” We are optimistic that we will soon have good news to announce regarding the negotiations,” a spokesperson told local media.
The Albanian economy and transport ministers have been lobbying since early 2015 to reach a deal with the concessionaire over its exclusive rights that would pave the way to the operation of the new United Arab Emirates-funded Kukes airport in northeastern Albania and the construction of a new airport in southern Albania serving the tourism industry.
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.
Passenger numbers at Albania’s sole international airport, slightly recovered for the second year in a row in 2014 but stood below their peak level in 2011 soon after Albania was granted visa free travel. Passenger numbers at TIA slightly rose by 3 percent to 1.81 million in 2014, but was down by 0.4 percent or 6,770 passengers compared to the airport’s most successful performance in 2011 soon after the visa regime in Schengen area was lifted for Albanians in December 2010.
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.
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.
