TALLINN - It would seem that the sky really is the limit when it comes to the continual take-off of the Baltic airline market. According to Estonian Air President Erki Urva, an increase in the purchasing power of people and growing competition among carriers are the two propelling forces.
As far as discount airlines, which broke into the Baltic market this fall, there are still more to come. Ryannis Capodistrias, EasyJet's marketing manager for Greece, Italy, Hungary, Slovenia and Estonia, said that the company hoped to serve 185,000 passengers in 12 months on the Tallinn-Berlin and Tallinn-London daily flights launched Nov.1.
"We plan to seize a 65 percent share of the Tallinn-London route, and we predict that passenger traffic on this particular route will increase by 150 percent after our arrival," said Capodistrias.
The airline will focus on targeting leisure passengers who stay longer than just a weekend, as well as business travelers. Although EasyJet does not plan to employ staff in Estonia, the company hopes to indirectly create some jobs in the tourist sector.
EasyJet's Tallinn-Berlin route has slightly more capacity than its London flights, as the plane has an additional seven seats.
"We have a very good record of continuously filling our planes. We are selling tickets as low as we can to fill vacant seats. But in the case of short-notice booking, prices may not be so low," Capodistrias explained.
"How can we make money on five eurotickets? Well, how can our competitors make money with flying empty seats and effectively earning zero euros?" he added.
Capodistrias said that if the company succeeded in Tallinn, the average price of the plane tickets would go up.
"If we're to be very successful in Tallinn - if our planes are full - and if the prices become what we would call 'very good' and what passengers would call 'expensive', then we will just add more flights," said Capodistrias.
From initial sales and from experience in similar routes, the marketing manager predicts that about 20 percent of passengers using the London route and about 30 percent using the Berlin route will be Estonian. The remainder of customers are expected to be foreigners.
He tried to dismiss the widespread fear that, once a low-fare airline opens a route into an Eastern or Central European city, British stag parties will help turn the place into a nightmare.
"Stag parties happen on weekends. We fly every day. You can never make money by flying a route on weekends. You cannot rely on seats you sell on a Friday heading out and a Sunday going back," he said.
According to Capodistrias, stag parties take place in almost every European city, regardless of whether it is located in Central or Eastern Europe.
"[The stag weekend tourists] will probably make up 5,000 from some 185,000 [customers]. It will be there. You will see weekend stag parties in every city with services from London, but we should never run a route if we were relying on this," he said.
As far as Estonia's Baltic neighbor, EasyJet will launch its Riga-Berlin route on Nov.25.
"Lithuania hasn't announced anything, but I can't say we aren't thinking about it. It is not always the market size that matters. You also need the authority support, you need good conditions at the airports," said Capodistrias, adding that pressure on full-service airlines will last as long as EasyJet does.
During its first four days of operation in Latvia, from Oct. 31 to Nov. 3, the Irish low-fare airline RyanAir has registered an 80 percent occupancy rate in planes flying from Riga to Tampere, London and Frankfurt. The company earlier said it planned to serve 300,000 passengers on the three routes and about 100,000 on the Riga-Stockholm route, which will be opened in February 2005. Rein Loik, head of Tallinn Airport, said the nine-month passenger flow this year had already surpassed that of 2003. The airport served 817,657 passengers between January and September of this year, a 37.5 percent increase year-on-year. The airport's total capacity is about 2 million passengers per year.
"We are hoping to reach the magic number - 1 million passengers - by the end of this year thanks to the routes. The passenger flow will likely keep growing in 2005, too," said Loik.
He added that, in his opinion, Estonian Air would also benefit from the low-fare airlines' coming into the market, as EasyJet will mainly serve incoming tourists. Riga International Airport, which has an estimated passenger capacity of 1.5 million passengers per year, is also looking forward to reaching the 1-million mark by the end of 2004, according to the airport's administration. So far this year, about 851,000 passengers have passed through the capital city airport. But Riga Airport's strategic goals are more ambitious than its Estonian competitor. With the construction of a new terminal to be completed by December 2005, the airport flow capacity should grow by an additional 500,000. Another two terminals would add 1.5 million passengers more. And in 2010, Riga Airport hopes to be serving 6 million passengers a year.