airBaltic, Estonian Air days numbered

VILNIUS - Vilnius Airport could soon give way to a duopoly of airline carriers, with low-cost heavies Wizz Air and Ryanair each recently taking verbal shots aimed at the demise of other Baltic flight services flying from Lithuania, as they announced their plans to start servicing the airport from April and May, respectively.
“I’d be very surprised to see Estonian Air and airBaltic staying in Vilnius Airport in three years’ time,” remarked CEO of the Hungarian carrier, Wizz Air, Joseph Varadi last week at a press conference held at the Lithuanian Transport Ministry. The comment came moments after confirming a partnership had been signed with Vilnius Airport for Wizz to start servicing flights as of April to and from the Lithuanian capital to European destinations including London, Cork, Stockholm, Barcelona and Eindhoven.

The competitive sledges had begun in February, after Ryanair CEO Stephen McNamara claimed, “Lithuanian consumers and visitors can now… escape airBaltic’s high fares by choosing Ryanair.”
Ryanair will be offering new routes to Bremen, Dublin, Girona, London (Stansted), Milan and Rome, to and from Vilnius, as well as adding extra destinations to Kaunas Airport, including Stockholm and the Greek Islands from May.
“It brings more variety of holiday choices for Lithuanians,” general manager of Kaunas airport, Arijandas Sliupas, told The Baltic Times, “And it increases the attractiveness of the country to foreign investors.”

AirBaltic replied to the airline influx by cutting four of its Vilnius routes for the summer season. The airline has ceased flights to London, Dublin, Rome and Paris, citing overcapacity as the issue, and blaming the discount tax scheme utilized by Vilnius Airport. In response to the industry bully-behaviour by the two low-cost airlines, airBaltic responded in a statement, “The world is big enough, and we [would] rather walk away from the crowd to avoid the other two airlines flying wing-to-wing with each other.”

While this is the second time Wizz Air has run a base from Vilnius Airport, this will be the first time Ryanair has flown direct from Vilnius, a decision which stemmed from, as McNamara has said, the “success of our Kaunas base, which opened in May 2010.”

“It has brought more business to the airport directly,” said Sliupas, referring to the opening of the Kaunas base. “Over the last year, our facility rental fees have increased by up to 25 percent. Our advertising revenues also doubled. This was primarily due to interest from the low-cost carriers,” he said, “The huge expansion was also a big stimulator for tourism.”
After the announcement in February by Ryanair to serve from Vilnius Airport, McNamara said “Ryanair’s 250,000 passengers at Vilnius and over one million passengers per annum at Kaunas will sustain over 1,250 jobs in the Lithuanian economy.” Airport general manager Sliupas echoed this claim.

Indeed, while this low-cost airline abundance could potentially mean a blow for already suffering airlines airBaltic and Estonian Air, the announcements by the budget airlines to be servicing Vilnius airport during the spring and summer could mean a coup for the local tourism, transport and hospitality industries.
“The effects to regional business, food and beverage, hotels, it’s significant,” said Sliupas, talking about what Kaunas Airport has experienced since the implementation of Ryanair in 2010, adding that “more and more business travellers are choosing low-cost carriers. It is expanding accessibility to the region.”

Transport Minister Eligijus Masiulis confirmed these sentiments last week at the Wizz Air press conference, noting the Wizz Air entry into the Lithuanian aviation market would have a positive impact on the economy and tourism.
With the two airlines set to create a certain duopoly on the passenger market, some locally run airlines, including Small Planet, a charter airline company which runs two aircrafts from Vilnius, have welcomed the low-cost carriers. “Personally, I would love to see the number of flights in Vilnius increasing each year, as it opens us up to the rest of the world and supports the economy, which is what we want,” relayed Small Planet CEO, Vytautas Kaikaris.

Though while supportive of the changes, Kaikaris warned, with industry wariness, “We have to not be overly optimistic about the length of time they will keep these routes. Wizz Air and Ryanair are experimenting at Vilnius Airport, and nobody can say for sure if they will stay, and for how long. There is a risk that the airlines coming into Vilnius will modify their schedules after they see the numbers [of passengers per annum]. It will be an interesting year to see what sticks, which strategies work, and which don’t.”

Whatever the outcome of the low-cost airline experiments, the possibilities this year for visitors to enter Lithuania and help bolster the economy with outside money has no previous comparison. “In the summer of 2011 it will become as easy to reach Lithuania by air as never before throughout its period of independence. As compared to all three Lithuanian airports, Vilnius Airport will offer the largest number of seats since 2008 – the best year before the recession,” predicted Director of VIA Commerce Department Simonas Bartkus.