Minister sounds alarm bell on airline competition

  • 2006-04-26
  • Staff and wire reports
RIGA - Transport Minister Krisjanis Peters has warned that low-fare airlines might stop flying to Riga. If competition authorities demand that Riga International Airport abolish its new price policy, which provides discounts on the basis of passenger turnover, he said, then budget flights may no longer serve the Latvian capital.

Peters also pointed out that if the existing price policy was changed, it would only benefit the airports in Latvia's neighboring countries. "I think that other countries would benefit from this," he said.
After several airlines filed a complaint in late 2004, the Competition Council began a probe into the airport's price policy. The council has not yet determined whether the airport abused its dominant position. Under Latvia's competition law, the investigation can last for up to two years, and the Competition Council has extended the deadline for announcing its final conclusion until May 24.
Peters, who recently took over the job from Ainars Slesers, who was fired for his involvement in a corruption scandal, warned of dire consequences should the council adopt a decision favorable to air carriers that filed the complaint.
"As a decision, it would be quite irresponsible and painful for Latvia's people," the minister said, adding that he had no information suggesting that the council might so decide.

"Considering statistics that show that low-fares airlines are used mainly by people who fly for the first time, these airlines have opened up the world to Latvia's residents more than anything else," Peters said, predicting that, should discount airlines such as Ryanair and EasyJet leave Riga Airport, the tourism boom in Latvia could take a dive.
The airport's new price policy, which went into effect Nov. 1, 2004, sets duties for air companies dependent on the number of passengers they handle. Larger airlines such as AirBaltic and Ryanair have benefited from the new policy.