Pristina moves against Skopje incentives



Kosovo has lodged a complaint with the European Commission and will take legal action over subsidies the Macedonian government is providing to low cost airlines at Skopje Alexander the Great Airport. The Kosovo Civil Aviation Authority says the incentives have created unfair competition in the region. The aviation regulator is convinced it will receive a favourable outcome. The Authority is basing its complaint on the Common Aviation Area Agreement, which the European Union has signed with countries in the Western Balkans. According to the Agreement, “This aviation area implies the adoption of the part of the Acquis containing the European aviation rules … The processes of market opening and regulatory convergence take place in parallel in order to promote fair competition and the implementation of common high safety, security, environmental and other standards”.





The Macedonian Ministry for Transport and Communication has been quick to respond to the complaint. In a statement, it said the incentives policy has been carefully analysed and is in accordance with EU rules and regulations. It added that in 2012 the Kosovan Ministry for Infrastructure was sent additional information on the subsidy policy which, it says, respects all international legal procedures. The Macedonian government launched a three-year subsidy scheme in 2012. It has proved successful with Wizz Air opening a base at Skopje Airport, which has in turn led to significant passenger and traffic growth. The Macedonian government will continue subsidising low cost flights to the country into 2015. This year the government offered 4.9 million euros in subsidies. Airlines have been given a one-off 40.000 euro cash injection for each new route launched for the first six destinations. Each subsequent route launch receives an additional 30.000 euro subsidy from the government and carriers are rewarded for the number of passenger they carry.





The complaint submitted by the Kosovo Civil Aviation Authority comes at a time when Pristina Airport has seen declining passenger numbers for an eleventh consecutive month in October. So far this year, the airport has welcomed 1.217.428 travellers, down 15.5% on 2013. Since the demise of the Pristina-based budget airline Belle Air Europe last November, Skopje has become a popular alternative for travellers from Kosovo seeking cheap flights. However, Kosovo has not been immune to offering subsidies and incentives itself either, making the legal action even more peculiar. On March 27, Pristina Airport introduced its new route development incentive. Airlines willing to operate flights from Pristina to unserved destinations are exempt from landing fees for the first year and enjoy a 50% discount in their second year of operations. Carriers operating at least one additional frequency to Pristina have been freed of landing fees for one year as well. Airlines which have handled over 50.000 passengers from the city in 2013 are now eligible for financial support. Pristina Airport provides 25.000 euros to carierrs which handled between 50.001 - 100.000 passengers last year and 200.000 euros to airlines carrying between 100.001 - 200.000 travellers. Airlines that handle over 200.000 passengers are provided with financial assistance ranging from 300.000 euros onwards. Finally, carriers with an average load factor of less than 50% on their flights to and from Pristina are now cleared of landing fees for a year. In addition, Pristina Airport provides support for marketing and promotion.