Marius Gelžinis, CEO, Lithuanian Airports.
“The year 2018 will be recorded among the best aviation years for Lithuanian Airports, since new records were reached – 6.3 million passengers were served and 61 thousand flights were conducted”.
Last August, Lithuanian Airports appointed new directors for the Vilnius, Kaunas and Palanga airports. What are their main medium-term challenges for the coming future?
The main goals of the airport managers are to improve passenger satisfaction indicators, also to carry out investments, develop the projects planned in branches, as well as to motivate employees and enhance their engagement.
Blitz sessions is the new initiative from Lithuanian Airports to generate change and open up possibilities for Vilnius, Kaunas and Palanga airports to strengthen the demand for new routes. How and why has this project emerged?
In order to attract a new airline or direction, competition is great indeed. In order to compete successively with all European airports, i.e., considerably larger markets in terms of residents, economic development, subsistence level, the contribution of state authorities, municipal organizations, entrepreneur associations and separate companies in both financial support and other means is of special importance for the entry of new airlines into the market or launching of new directions.
When considering the launching a new flight, airlines most often choose not an airport which they will conduct flights to, but assess the country or the city, i.e., the market size, demand for tourism and business flights, planned profitability of the direction, operational possibilities, and other important indicators.
We have no doubt that the Blitz initiative will contribute to successful competition with other airports since the mobilisation of different stakeholders for a common aim will increase the possibilities of attracting the new direction.
New flights have been attracted so far by applying discounts to airport fees and granting airlines de minimis support of up to EUR 200 thousand for 3 years.
Lithuanian Airports already have several examples of successful cooperation with partners – together with the financial support of Kaunas City Municipality, the Polish carrier LOT changed the image of Kaunas airport as a cheap flight airport upon launching flights to Warsaw. The Klaipėda region municipalities association has successfully contributed to the attraction of flights from Palanga to London Luton Airport and Dortmund.
Blitz sessions have been received by the participating airlines well; therefore, we expect that soon we will see the results of this initiative.
LOT Polish Airlines have recently won an international public contest of Lithuanian Airports and will connect Lithuania and the United Kingdom in order to promote investment. This is the first case in the EU when the flight mechanism aimed at attracting business passengers will be supported by the state. What other measures will be implemented to foster the growth of travellers?
Currently, Lithuanian Airports offer a wide range of incentive schemes to attract new routes and boost growth in passenger numbers:
- New Route Incentive Scheme at VNO and PLQ which is based on discount for landing, disembarking passengers, and parking charges. Discounts are valid for the first 3 years of operations.
- Carried Passenger Volume Incentive at KUN. It applies to all airlines which carry more than 5,000 passengers (embarking and disembarking) during the operational year.
- Network Incentive Scheme which might be of benefit to the airlines operating in more than two Lithuanian airports.
- Marketing de minimis support for a new route or additional frequencies for the maximum amount of EUR 200,000 for a 3-year period.
During 2018, Lithuanian Airports provided almost 9 million euros based on 4 aforementioned support mechanisms.
Passenger numbers increased by 10 percent at Vilnius, Kaunas, and Palanga airports in 2017. They serviced 5.2 million passengers and 55 thousand flights. What about figures for 2018?
The year 2018 will be recorded among the best aviation years for Lithuanian Airports, since new records were reached – 6.3 million passengers were served and 61 thousand flights were conducted. The biggest breakthrough occurred at the main airport of the country – Vilnius Airport, however, the year was also very intensive for Kaunas and Palanga branches.
The growth of passengers is 19 percent and the growth of flights is 11 percent.
The biggest flow in its history, 4.9 million passengers, was successfully served by Vilnius Airport which exceeded the result of 2017 by more than one million passengers or 30 percent.
Kaunas Airport opened a new and important page in its history in 2018 by expanding its business profile. The first traditional airline commenced operation at this airport – LOT Polish Airlines which allowed offering even more services to customers requesting business flights. Near the year-end, Kaunas Airport announced its impressive results –the threshold of 1 million passengers served was exceeded. During the previous year, this was achieved only due to the reconstruction of Vilnius Airport runway when the biggest passenger flows had been directed to Kaunas for over a month.
Palanga Airport also had a record. More than 316 thousand travellers were served, i.e., more by 7 percent than a year before.
Lithuania’s government estimates that around 700 million euros will be invested into the expansion of the airports in Vilnius, Kaunas and Palanga by 2028. What are the main guidelines for this strategic plan?
These plans are not finalised yet. Lithuanian Airports is a state-owned company; therefore, all large investments have to be responsibly considered at the highest level of government. As long as we do not have any final solutions, we cannot detail any strategic changes of the infrastructure.