Riga airport flying into regulatory turbulence

  • 2007-10-24
  • Staff and wire reports
RIGA - The European Commission may file suit against the Latvian state over Riga airport's discount program, claiming it is in contradiction to EU rules, reports Latvian daily Diena.
Latvian Competition Council chairman Ieva Jaunzeme said that the European competition commissioner, Neelie Kroes, on a visit to Latvia last week, promised to assess possible action by the European Commission. The council views the current pricing policy as "discriminatory and non-transparent."
Jaunzeme said that in these situations, resolutions, in civilized countries, usually don't go as far as imposing fines, as involved parties first try to work out problems. In the worst case scenario, financial penalties would be levied against the government.

In late November 2006 the Competition Council ordered a cessation of these discounts, as it considered the discount policy containing the signs of malevolent use of Riga airport's dominant position. Latvian Transport Minister Ainars Slesers, in reply, ordered the airport to contest the Competition Council decision in court, which was done. The pricing policy determining airport duties and discounts, based on the number of passengers serviced, is still in force.
Slesers says that the transport ministry will defend the discount system, as it facilitates the positive development of the airport. Just over 1 million passengers passed through the airport's gates during this year's third quarter, a jump of 36.2 percent over the same period last year.

Riga is the largest destination in the Baltics by passenger numbers. Currently 18 airlines serve the airport, though Latvia's airBaltic and Ireland's low-cost airline Ryanair bring in the greatest number of passengers and therefore benefit from the highest volume discount, up to 80 percent against the 12.18 euro tax. This level discount is applied to those airlines carrying more than 500,000 passengers per year into Riga.
The discount policy starts at 10 percent for airlines carrying more than 25,000 passengers per year.
Kroes, on the Latvian television program "Panorama" said that any discount program has to take into account all concerned parties' views, and that though the transport minister has shown an ambitious agenda and is extremely involved with the airport's development, he also has to take into account EU rules.
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