The transport ministry wants to lure more carriers to Lithuania. Photo courtesy of SAS.
VILNIUS — This week Lithuanian Minister of Transport and Communications Eligijus Masiulis proposed parliament designate a 15 million litai (€4.35 million) to a stimulus fund to attract airlines to set up routes to and from Vilnius.
The transport ministry said the goal is to reconnect Vilnius to Europe’s most important hubs for both tourism and business after the collapse of Lithuania’s national carrier flyLAL in January closed many routes. Vilnius International Airport currently has scheduled flights to only 16 destinations, lacking direct flights to cities like Paris, Berlin, Munich, Amsterdam, Rome, Milan, Madrid, Barcelona, Budapest, Athens, Istanbul or St. Petersburg.
Companies have sloughed off Lithuania as an unprofitable destination. Until this year, Vilnius International Airport was one of the most expensive airports in new Europe for landing and processing fees. Since then it has cut its fees, but the move was too little too late, particularly in the year of the economic crisis with the airport failing to attract many large carriers to the capital. Meanwhile getting a flight to Vilnius has become more inconvenient and expensive.
“The ministry proposes the possibility of a stimulus from the state budget for airline companies that would commit to operating regular flights to destinations important for Lithuania as a state,” Rimvydas Vaštakas, Vice-Minister of Transport and Communications told Baltic Reports on Thursday. “The funding would be allocated for the coverage of risks of commerce and for the encouragement of the flights, even if the flights would prove as loss-making.”
A working group established by the prime minister to tackle the airport’s lack of flights found the following destinations to be of national importance — London, Berlin, Paris, Rome, Milan, Amsterdam and Madrid, Vaštakas said.
The ministry expects the stimulus to pay itself off quickly in tourism, business activity and investment and said it would also boost the image of the nation, which has been damaged by being unreachable from many destinations.
The state money would not come easily for companies — if they took part in the program, which has to be won by tender, they would be required to provide a minimum service for passengers to allow Lithuania to grow as a country.
European Union rules allow member states to impose a public service obligation for scheduled air services on a route that is considered vital for the economic and social development of the region that the airport serves.
“This obligation shall be imposed only to the extent necessary to ensure on that route the minimum provision of scheduled air services satisfying fixed standards of continuity, regularity, pricing or minimum capacity, which air carriers would not assume if they were solely considering their commercial interest,” Vaštakas said. “The EU member state concerned may compensate an air carrier for adhering to the standards required by a public service obligation imposed under the public services obligation.”
Stipulations for involved companies will include destinations, time slots available and the continuation of flights.
