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Most international traffic to Lithuania goes through Vilnius International Airport, however Kaunas, to the northwest of the capital Vilnius, is the destination for most budget airlines. The national carrier of Lithuania, Lithuanian Airlines (FlyLAL), suspended operations and declared bankruptcy in 2009 after suffering the effects of a price war with its major competitor airBaltic and amassing huge debts. The only native carrier operating scheduled services out of Lithuania now is the LCC Star1 Airlines, based at Vilnius International Airport.
Airports in Lithuania
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Latvia receives financial assistance for first round of standard gauge railroad project Rail Baltica
42 total articles
LOT Polish Airlines' plan to more than double passenger numbers to 10 million in 2020 will bring significant growth to its base airport, Warsaw Chopin. LOT's aspirations to be the hub carrier for the "New Europe" will elevate Chopin airport to competing with Budapest, Prague and Vienna to be a hub for Central Europe.
LOT's growth is important to Warsaw Chopin, but is not the sole story. Chopin grew traffic while LOT restructured, while passenger numbers declined and then stayed flat. Second largest carrier Wizz Air is growing its presence and could introduce connections. Ryanair meanwhile is at Warsaw's LCC airport, Modlin, contributing 60% growth in the first five months of 2015.
Although Warsaw Chopin finished an expansion programme in May-2015, further works are needed to support LOT's growth, especially with widebodies. Emirates will up-gauge its existing daily service before presumably later considering a second daily flight. The bigger challenge to LOT and Warsaw is Lufthansa and its German hubs, which have grown as LOT shrank, especially in secondary Polish cities.
In Mar-2015 CAPA published a report highlighting how Belgrade Airport, in tandem with Air Serbia, was working towards a re-balancing of power in central and eastern Europe, away from the traditional hubs of Vienna, Budapest and Prague, although it had a long way to go to achieve such an ambitious aim.
Belgrade Nikola Tesla Airport passenger numbers grew almost 32% in 2014 and Air Serbia underwent “one of the most amazing turnarounds in history,” as it joined the Etihad equity partnership. But not everyone is experiencing such blue skies.
This is an appropriate moment to review infrastructure investments and privatisation activities at airports throughout the entire region, where there are opportunities for investors through concessions, BOTs and IPOs. But as ever, caution is required.
Wizz Air CEO Josef Varadi told a recent meeting of the Aviation Club in London that he ran a very disciplined airline. "We never grow for growth's sake", he said, explaining that the airline had clear financial targets and that growth was an output from this process.
Earlier this year, Wizz Air pulled out of a planned initial public offering (IPO) of its shares, which would have seen it floated on the London Stock Exchange. Investor appetite was dulled by geopolitical issues, a fuel price spike and profit warnings from other airlines, rather than any problems at the airline itself. Indeed, its most recent accounts show that it is now one of Europe's most profitable airlines, with significant cash reserves. An IPO could come back onto the agenda, but, Mr Varadi said, "we are not desperate".
Its results have not always been strong in the 10 years since its 2004 launch, but our analysis of its accounts suggests that it is now on a firm footing, supporting Mr Varadi's claim that "financial performance is at the core of the airline – we are not doing it for charity".
airBaltic settles into Etihad partnership for Africa, Middle East & Asia – North America may be next
airBaltic is quietly pleased with initial performance from its partnership with Etihad Airways, under which airBaltic commenced Riga-Abu Dhabi service in Dec-2013. Less than three months on, airBaltic is still observing trends in the proportion of local versus connecting traffic, but Bangkok is an early popular onward destination. CEO Martin Gauss told CAPA that Latvia's growing portfolio of air service agreements can expand the number of codeshares it can place on Etihad flights, enabling airBaltic to sell flights from Riga to the Middle East, Africa and Asia – a potentially huge area it previously had no access to, with its local market base instead using competing airlines.
As Etihad rapidly digests its Darwin Airline and Jet Airways equity stakes and evaluates Alitalia, speculation has mounted on airBaltic being a potential equity partner. Mr Gauss says the first priority for the airline is growing the codeshare – which so far is more important to airBaltic than Etihad – but he does not rule out any possibilities. More concretely in the medium term is gaining better access to North America, with airBaltic considering if a North American carrier can serve Riga and partner with airBaltic, or if airBaltic should serve North America with its own metal. The trans-Atlantic market is appealing but also competitive with joint ventures, and Mr Gauss is not rushing to enter.
AirBaltic commenced a new codeshare with Etihad Airways on 16-Dec-2013, launching a four times weekly A319 service and linking its Riga hub with Etihad’s in Abu Dhabi. Riga is the Baltic region’s principal transfer point – the airport says that 33% of passengers in 2013 are transit/transfer traffic – and Abu Dhabi is rapidly emerging as an important hub for travellers flying between Europe and Asia.
Following airBaltic’s near bankruptcy in 2011 and its subsequent renationalisation and investment from the Latvian Government, the state has been on the look out for a private sector investor. Meanwhile, CEO Martin Gauss has been focusing on the carrier’s restructuring programme and expects to restore profitability in 2014 after achieving better than expected results for 9M2013.
An EU investigation into state aid received in 2011 is ongoing and could potentially lead to the carrier having to repay the funds received from the state. This would increase the pressure to secure fresh investment. Some observers have suggested that the Etihad partnership could be a stepping stone to a future equity relationship. The codeshare attests to some meeting of minds already.
Eastern European low-cost carrier group Wizz has unveiled plans to expand its Vilnius base in Lithuania and establish its third Ukrainian base in Lviv. The announcements follow other recent expansion announcements that will see Wizz expand its bases in Bulgaria and Macedonia.
In the Lithuanian capital Vilnius, Wizz Air will expand its fleet of A320s at the airport to three aircraft. The carrier will use the additional aircraft to launch three new routes and increase frequencies on five existing routes.
Meanwhile the group’s Ukrainian subsidiary Wizz Air Ukraine plans to base one A320 at Lviv from 30-Apr-2014. The aircraft will be used to launch five new routes from Lviv, which Wizz Air Ukraine now serves with three routes. The A320 to be based at Lviv Airport will be Wizz Air Ukraine’s fifth aircraft overall.