Albanian company takes on the concession for Tirana Rinas Airport


Tirana’s Rinas Airport performance over the last decade or so must have come as a surprise to many. It has grown passenger traffic steadily since it was first concessioned in 2005, as tourism into Albania has also increased.

Although available traffic data shows that in only one of the years 2009-2019 (2012) was there negative passenger growth. In all other years it ranged from a low of +3% to +19.8%, and with an average growth rate over those 11 years of +9.4%. There are few airports in Europe that can boast that consistency of growth.

Tirana Rinas Airport was described as “a model concession”, and that it could be “considered a success story, somewhat against the odds.” (CAPA analysis report, Jul-2015)

Now, after one change of concessionaire already, involving a Chinese joint venture, including a large international fund, the concession has changed hands again.

This time the airport is ‘coming home’ to a local conglomerate with strong ties to the government.


  • An Albanian conglomerate takes over the concession of Tirana Rinas Airport.
  • The facility has performed strongly over 15 years, since a concession in 2005.
  • That three-party consortium transaction was a risky venture for the participants.
  • In between, a Chinese joint venture took control.
  • This transaction could be interpreted as a form of renationalisation, which would have come anyway in 2017.
  • The Albanian economy and political landscape are now comparatively sound, and prospects for long haul tourism can improve
  • New airport to be built for concession at Vlora - only the country's second  

This report refers to Tirana Rinas Airport, also known as Tirana International Airport, Tirana Nënë Tereza (TIA) Airport and Tirana Mother Teresa Airport.

Biggest industrial/commercial group takes over the airport from a Chinese JV 

The Albanian Kastrati Group, named after one of the country’s original tribes, acquired the management concession for Tirana (the capital) Rinas Airport from Real Fortress Private Limited (China Everbright) in early Dec-2020. The transaction was valued at EUR71 million.

Kastrati is the largest group in Albania. Its activities include sales of oil and fuel, but in recent years it has diversified its operations, mainly in insurance, construction and the tourism sector. The group is known for the government’s favourable approach to its projects. In 2019 the group's annual turnover totalled approximately EUR730 million, marking its best historical year, and after an increase in revenue of about 5%.

Its aim is “to support long-term economic growth, social stability, prosperity and progress in the regions where we operate, as well as caring for the environment and ensuring sustainable use of natural resources.”

Hochtief took a jump into the unknown with the Rinas Airport

The sustainability parts of that aim are not the aspirations that one would normally expect in a country that was once a hot bed of communism, and which is still regarded as something of a backwater, perhaps unfairly.

But they are representative of the strides forward that Albania has made during the last decade, and are testimony to Germany’s Hochtief AirPort (now AviAlliance), which was the western operator first to take on the operating part of a concession of what was then an ailing airport, and turn it around.

Technically speaking it was a BOOT (Build, Own, Operate, Transfer) concession, in which the ‘Build’ part referred to a construction requirement, mainly for terminal space that the consortium owned and could do what it liked with until it was eventually transferred to the government. That sort of concession is rarer these days, having been often replaced by public-private partnerships that are more conducive to the needs of the ‘public’ side of the equation from the start.

Hochtief took a 47% share in the Tirana Airport Partners consortium that took over the management of the Rinas airport in Apr-2005 under a 20-year concession, together with Deutsche Investitions- und Entwicklungsgesellschaft (31.7%) and the Albanian American Enterprise Fund (21.3%). The airport company had the title Tirana International Airport SHPK (TIA).

At the end of the concession the airport would be returned to the government for an unspecified fee.

Albania had – and has – been the surprise success story in Eastern Europe

Passenger traffic grew quickly, prompting a new terminal in 2007 and expansion to be put into operation as soon as 2009, raising capacity to 1.8 million ppa.

Although available traffic data is available only from that year, it shows that in only one of the years 2009-2019 (2012) was there negative passenger growth. In all other years it ranged from a low of +3% to +19.8%, and with an average growth rate over those 11 years of +9.4%. There are few airports in Europe that can boast that consistency of growth.

Passenger traffic did fall by 60.7% in 2020 but – as with everywhere else – uncontrollable external factors accounted for that.

Tirana Rinas Airport: annual passenger numbers, 2009-2020

In Jul-2015 CAPA published a report into ‘Airport investment in Eastern Europe’, with the subtitle ‘Opportunities abound but caution needed amid changing markets’.

In it, Tirana Rinas Airport was described as “a model concession”, and that it could be “considered a success story, somewhat against the odds.”

The text below is taken from that report.

(For the full report, see Airport investment in Eastern Europe: opportunities abound but caution needed amid changing markets).

‘The airport company had set itself the goal of steadily optimising operations at the new airport and making it into one of Albania's most up-to-date infrastructure facilities. A new passenger terminal was constructed and inaugurated in 2007.

There were certain risks associated with the project. Albania was still in a state of political and economic transition in 2005. General elections in 2009 and 2013 brought stability through coalition governments and there was a period of economic growth that has since slowed but an open market economy has been established in what was once a closed and centrally planned state. Inward FDI has significantly increased in recent years. Albania has since become a candidate state for EU membership and is a member of NATO. One fly in the ointment is potential exposure to banking sector ties with Italy and, more importantly, Greece.

By most measures the airport is a success. In 2005, TIA took over Rinas Airport when it was serving about 600,000 passengers per annum, since increasing to 1.8 million passengers in 2014 despite a slight stutter in 2012.

There is a broad mix of carriers, most of them based in neighbouring countries in all directions, and 86% of capacity is currently on full service carriers. This suggests ample potential growth in the LCC segment (currently 7.9%) if and when Albania does join the EU, assuming that the management does actually wish to attract them. It might be forced to.

There are a few other airports in Albania that could handle commercial flights[,] but the 20-year deal under which TIA is operated is also a monopoly on airspace in the country. There have been negotiations to revise those terms of the contract[,] but no changes as yet.

Meanwhile the airport is almost perfectly balanced between SkyTeam and Star Alliance[,] with about one third of capacity each, with little presence so far from oneworld.

The airport can be considered one of Europe’s more successful concessions[,] and a benchmark for others in the east of the continent in particular.’

The operating company had "changed the image of Albania in the eyes of visitors and tourists into that of an open, stable and dynamic country for domestic and foreign investment", in the words of an award made to it in 2008 by the government.

Chinese acquisition came in tandem with a slight extension to the concession period

Then, in 2016, 11 years into the concession, Tirana Rinas Airport received a USD90 million bid for its acquisition by China's Everbright Global Airport and Investment Fund.

On 25-Apr-2016 China Everbright Limited announced that Keen Dynamics Limited, its JV with Friedmann Pacific Asset Management Limited (Hong Kong), had signed an agreement to acquire Tirana International Airport SHPK. Upon closing of the deal, KDL would take over Tirana’s airport concession until 2025 (with two years extension to 2027 – pending the Albanian government’s approval, which was given – and in exchange for the opening of Kukës Airport to international flights).

Finally, in Oct-2016, China Everbright Ltd announced that it had acquired 100% of the airport’s concession. And that was the situation until Dec-2020 and this most recent transaction.

Is the Kastrati concession acquisition a shift back towards public sector ownership?

China Everbright moved to offload the concession as it was nearing its conclusion anyway, and faced several difficult years trying to regain lost traffic.

Has it reverted to the public sector early as it would have done by default under the initial agreement? In a way, perhaps.

Founded by Shefqet Kastrati around the same time as the original Hochtief concession on the airport, Kastrati is a private unlisted conglomerate with interests ranging from petroleum to car dealerships to real estate to tourism, but it has close ties to the government. That will inevitably aid the transition of this successful airport back to government control while keeping future transactions within Albania.

As for the China Everbright Fund, it signals its exit from the airport sector – for now, at least.

Kastrati takes over an airport in good shape, with the exception of long haul and alliance routes

So what sort of airport does Kastrati inherit?

In comparison with the 2015 CAPA report referred to above, the LCC capacity share has grown from 7.9% to 45.7%.  There is an almost perfect capacity split between six main airlines, but there has been a decline in alliance airline capacity, with more than three quarters of seats being on unaligned carriers.

There are no services outside Europe (counting Turkey).

Tirana Rinas Airport: seats by business model, week commencing 11-Jan-2021

Tirana Rinas Airport: seat capacity by airline, week commencing 11-Jan-2021

Tirana Rinas Airport: seats by alliance, week commencing 11-Jan-2021

Usage of the airport (arriving/departing seats by hour) is patchy, with capacity spread over 15 hours on some days, but 10 hours or less on others. No two days are the same.

COVID-19 has had a relatively moderate impact

With respect to the impact of COVID on operations, as the chart below shows the reduction in seat capacity was in stages in the period Jan-2020 to May-2020, after which it picked up strongly until the end of July, at which stage there were almost as many seats available per week as in January.

It then tailed off again throughout the ‘second wave’, and at the beginning of Jan-2021 the weekly capacity level is 34% of what it was a year ago in 2020.

Tirana Rinas Airport: weekly total seat capacity, 2018-2021*

Politically and economically sounder than it was; EU accession is a slow process

Looking at the wider economic position, Albania is a settled democracy now (technically a constitutional republic like the USA, which is slightly different), and with an incumbent Prime Minister since 2013. Some questions remain about the degree of ‘democracy’.

Albania remains an official applicant to the European Union and has been since 2014, having been recognised as a "potential candidate country" as long ago as 2000. Until 2020 the nation received EUR1.2 billion of developmental aid from the Instrument for Pre-Accession Assistance, which is a funding mechanism for EU candidate countries.

Albania's EU accession is bundled with North Macedonia's EU accession. Albania was given certain preconditions for starting the accession negotiations, such as passing reforms in the justice system, instituting a new electoral law, opening trials for corrupt judges, and implementing respect of human rights for its Greek minority.

On 25-Mar-2020 the Council of the European Union decided to open accession negotiations, which was endorsed by the European Council the following day. Talks still haven’t started.

In any case, membership of the EU is not the yardstick it once was, even if Brussels could be expected to throw money at Albania if it became a member. Since 2014 more countries have left the Union than have joined.

Generally speaking Albania's once centralised, now market-based economy is in reasonable shape, with GDP growth of 3.8% (2017 est.); 4.07% (2018 est.); and 2.24% (2019 est.) That economy is split between agriculture: 21.7% (2017 est.); industry: 24.2% (2017 est.) and services: 54.1% (2017 est.)

The unemployment rate hovers between 5% and 7%.

The country continues to undergo macroeconomic reform, led by the IMF and the World Bank.

The tourism sector has much promise

Tourism has been a notable source of national income, particularly during the summer months. With over 3.8 million tourists annually, tourism generates revenue in excess of EUR1.5 billion. Albania is ranked among the top 25 most popular tourist destinations in Europe, and in 2014 it was voted one of the world's top tourism destinations by The New York Times and Lonely Planet.

As in the case of passenger numbers at Rinas Airport, in only one year of 10 was there a reduction in visitor numbers; otherwise growth was in double digits in all but one year, with two years recording more than 30% growth.

Albania annual tourism: visitor arrivals, 2009-2018

One problem – or opportunity, depending on how you look at it – is that 90% of all visitors are from Europe.

Long haul tourism remains to be developed, and that will be very difficult for the next few years. Technically speaking, a 2750m x 45m runway should be adequate for the type of aircraft likely to fly any mid to long haul route into the airport.

Breaking - new investment programme and extension contract...

On 27-Jan-2021 Tirana Rinas Airport announced plans to launch a new investment programme as part of the amendment of its existing concession contract, following the takeover of TIA by Kastrati Group.

The new operator will launch a EUR100 million investment programme aimed at expanding airport capacity to six million passengers per annum. Works will include a runway extension project, airport infrastructure overhauls and improvements to the quality of service.

On 09-Feb-2021 Albania's Parliamentary Assembly approved the extension of Kastrati Group's concession contract for the airport by 13 years from 2027 to 2040, further reinforcing the suspicion that it is a state-favoured concession. 

...and a new airport to be constructed near Vlora under concession terms

Currently, the Rinas airport is Albania's only operational airport.

However, in early Feb-2021 Albania's infrastructure minister Belinda Balluku revealed that the government had received two offers for a concession contract for the construction, operation and maintenance of an international airport near the southwestern port city of Vlora.

The Tender Commission will now evaluate the offers with a view to announcing the winning bid in Mar-2021.

The construction of the airport is expected to start at the beginning of April. Ms Balluku previously revealed (Dec-2019) that the proposed term of the concession contract would be 35 years. 

Albania’s government reopened the tender for the concession in Nov-2020, after several delays because of the COVID-19 pandemic. The tender was launched in late 2019, after the Albanian government failed to conclude negotiations with a Turkish consortium for the construction of the airport, an investment estimated at EUR100 million (USD120.4 million).

The transaction is likely to be of a traditional Build-Operate-Transfer (BOT) nature.

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