TIRANA, Sept. 20 – Albania’s Competition Authority has launched an inquiry into the Albanian subsidiary of Air BP, the specialized aviation division of British Petroleum oil giant, over its monopoly position in the supply of aviation fuel in Albania, increasing carriers’ costs at the country’s sole international airport which has one of the region’s highest ticket prices.
“Although the exclusiveness of aviation fuel trade at the Tirana international airport area expired in January 2015, this market remains a monopoly of Air BP company which is the only operator providing this service in the air passenger market,” says the Competition Authority.
The watchdog says the monopoly conditions under which the Tirana International Airport concessionaire and the aviation fuel company operate are increasing operating costs for airlines and affecting ticket prices.
Air BP Albania, which supplies Jet-A1 aviation fuel to airlines at the Tirana International Airport, is stripped of its obligation to pay excise tax and the carbon tax on fuel. The watchdog says the company’s profits are considerable higher compared to those in the Albanian fuel market. Air BP Albania posted profit before tax of 456 million lek (€3.3 mln) in 2014, according to Open Data research centre.
The Competition Authority’s probe covering the January 2014-June 2016 period comes after the Albanian Oil Association had previously complained over barriers and the inability of other operators to enter this market. AFT SHA is Air BP’s only rival, but is only involved in the supply of fuel to state-owned helicopters.
Five months after exclusive rights that the country’s sole international airport had been holding on international flights for a decade were lifted, the Kukes airport in northeastern Albania has not opened despite interest by low cost carriers to operate there. The operation of a new airport is expected to increase competition and allow the fight of low-cost carriers although the Kukes airport’s long distance from Tirana and its location in northern Albania far from the southern Riviera are not very promising.
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.
The newly expected operation of the Kukes airport near the Kosovo border extended TIA’s concession contract until April 2027.
Albania’s Competition Authority has okayed the takeover deal between the TIA airport concessionaire and China Everbright which will manage the country’s sole international airport for another 11 years for a reported €82 million.
The airport’s infrastructure, ground handling and commercial services will now be handled by Keen Dynamics Limited, a newly established offshore based in the Cayman Islands, formed between Chinese state-owned investment company China Everbright Limited which holds a 75 percent stake and Hong Kong-based Friedmann Pacific Asset Management Limited focusing on global airport investments.
Passenger numbers at Albania’s sole international airport hit a historic high of nearly 2 million in 2015, up 10 percent compared to 2014, the airport concessionaire says.
Some 14 airline companies operate in Tirana, all of which foreign-owned, linking Tirana to 22 foreign destinations through direct flights, mainly Italy.
