Cabinet endorses more discounts for air carriers

  • 2007-08-22
  • From wire reports
RIGA- The Latvian government onAug. 15 approved a series of newdiscounts for airlines 's this time forthose carriers that launch newroutes to and from Riga 's in orderto further facilitate the Latviancapital's ambition to become thepremier passenger hub in EasternEurope.Ministers agreed to grant a 40percent discount for new flights toand from Riga InternationalAirport, although the TransportMinistry, which proposed the discounts,had wanted a 50 percentdiscount.

The decision allows theairport to grant the discount to carriersfor two years after the newroute is launched.The discounts will not go intoeffect until approved by theFinance Ministry.Prime Minister Aigars Kalvitistold ministers that the new discounts,in addition to those alreadyoffered to airlines with high passengerturnover, are necessary tofoster the airport's development.He pointed out, however, thatthe new discounts must beapproved by the Finance Ministryand that provisions for grantingthem must be clearly specified.Transport Minister AinarsSlesers, who was instrumental inluring bargain airlines such asRyanair and EasyJet to Riga in2004, said that the new discountswould boost the number of directconnections with European cities,such as Stockholm and Manchester.He added that many Europeanairports have given similar andeven larger discounts to carriersfor providing new routes.

The minister said Riga's airportstill has a large potential forfurther development that could beachieved both by attracting newcarriers and launching new routes.The new discounts, he said,would not be added to the previousdiscounts.Ieva Jaunzeme, chairwoman ofthe Competition Council, said thatthe council disapproves of the newdiscounts, particularly since theprevious discounts are still underlegal dispute.Riga Airport boasts more than50 regular flights to destinations inEurope, Asia, North America andAfrica.The airport served over 1.7 millionpassengers in the first sevenmonths of the year, up 25 percentyear-on-year. Last year the airportsaw 2.5 million passengers passthrough its gates, a 32.9 percentincrease from 2005.From January to July,airBaltic, the state-owned carriercontrolled by Scandinavia's SAS,accounted for 44 percent of allpassengers, while Ireland'sRyanair's market share wasslightly over 26 percent, accordingto the airport.