After the collapse of Belle air many opportunities have been arise in Albanian aviation market. This report is a synopsi...
PROJECT TIRANA A STUDY ON THE PAST, PRESENT AND FUTURE OF ALBANIAN AVIATION MARKET AUTHOR :PANTELEIMON THOMAIDIS
8/3/2014
PROJECT TIRANA VER 1 SUMMER 2014
REPORT PROJECT TIRANA A STUDY ON THE PAST, PRESENT AND FUTURE OF ALBANIAN AVIATION MARKET.
AUTHOR PANTELEIMON THOMAIDIS
VERSION 1 VALID FOR SUMMER 2014
FOR ANY COMMENT DO NOT HESITATE TO CONTACT THE AUTHOR : E-MAIL :
[email protected]
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PROJECT TIRANA VER 1 SUMMER 2014
TABLE OF CONTENTS 1.
SCOPE OF REPORT .......................................................................................................................................... 6
2.
INTRODUCTION .............................................................................................................................................. 6
3.
HISTORY OF BELLE AIR AND BELLE AIR EUROPE...................................................................................... 8
4.
HISTORY OF OTHER ALBANIAN AIRLINES & TIRANA AIRPORT. ............................................................ 9
5.
6.
4.1.
ALBANIAN AIRLINES .............................................................................................................................. 9
4.2.
TIRANA INTERNATIONAL AIRPORT .................................................................................................... 11
BELLE AIR OPERATIONS FLEET ...................................................................................................................14 5.1.
ROUTES ....................................................................................................................................................14
5.2.
FARES ........................................................................................................................................................ 17
CURRENT OPERATIONS ............................................................................................................................... 18 6.1 FLIGHTS TO TIRANA .................................................................................................................................. 18 6.2 NEW ROUTES ............................................................................................................................................. 19 6.3 TICKET PRICE SERVEY ................................................................................................................................ 19 6.4 ROUTE DISTANCE ANALYSIS .................................................................................................................... 25 6.5 REVENUES ANALYSIS .................................................................................................................................. 27
7.
8.
ALBANIAN AVIATION MARKET .................................................................................................................. 35 7.1.
STATICS ANALYSIS ................................................................................................................................ 35
7.2.
OTHER AVAILABLE DESTINATIONS ................................................................................................... 45
7.3.
ORPHAN ROUTES .................................................................................................................................. 48
7.4.
TIRANA AIRPORT................................................................................................................................... 48
7.5.
MARKET ACCESS .................................................................................................................................... 52
7.6.
SEASONALYTY ........................................................................................................................................ 52
CONCLUSIONS............................................................................................................................................... 54
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INDEX OF FIGURES FIGURE 1 TIA AIRPORT .......................................................................................................................................... 13 FIGURE 2 BELLE AIR ROUTE MAP ........................................................................................................................ 15 FIGURE 3 BELLE AIR ROUTE MAP PRISTINA ..................................................................................................... 16 FIGURE 4 DESTINATIONS PER AIRLINE.............................................................................................................. 21 FIGURE 5 WEEKLY FREQUENCY PER AIRLINE .................................................................................................. 22 FIGURE 6 WEEKLY FREQUENCY PER DESTINATION ....................................................................................... 24 FIGURE 7 NUMBER OF AIRLINES PER DESTINATION ...................................................................................... 25 FIGURE 8 BOOKING PATTERN DUBLIN ............................................................................................................. 29 FIGURE 9 LOW MEAN PRICE PER DESTINATION.............................................................................................. 31 FIGURE 10 RPM ...................................................................................................................................................... 32 FIGURE 11 AVERAGE RPM ..................................................................................................................................... 33 FIGURE 12 ARRIVING PASSETNGERS AT TIA PER COUNTRY .......................................................................... 37 FIGURE 13 ARRIVING PASSENGERS AT TIA FROM ITALY ................................................................................ 38 FIGURE 14 RATE OF CHANGE FO ARRIVING PASSENGERS ............................................................................. 39 FIGURE 15 ARRIVING PASSENGERS AT TIA PER DESTINATION ......................................................................41 FIGURE 16 RATE OF CHANGE OF ARRIVING PASSENGERS PER DESTINATION .......................................... 43 FIGURE 17 RANGE MAP ......................................................................................................................................... 46 FIGURE 18 RATE OF INCREASE OF PASSENGERS AT TIA .................................................................................49 FIGURE 19 MARKET SHARE AT ............................................................................................................................49 FIGURE 20 PASSENGERS AT TIA .......................................................................................................................... 50 FIGURE 21 TIRANA SEASONALITY....................................................................................................................... 53
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INDEX OF TABLES TABLE 1 BELLE AIR FLEET .....................................................................................................................................14 TABLE 2 BELLE AIR ROUTES TIRANA .................................................................................................................. 15 TABLE 3 BELLE AIR ROUTES PRISTINA ............................................................................................................. 16 TABLE 4 SIMPLE OF BELLE AIR AVERAGE TICKET PRICES .............................................................................. 17 TABLE 5 AIRLINES SERVES TIA AT SPRING 2014 .............................................................................................. 18 TABLE 6 TICKET PRICES SURVEY 2014 ................................................................................................................ 20 TABLE 7 DESTINATIONS PER AIRLINE ................................................................................................................ 21 TABLE 8 WEEKLY FREQUENCY PER AIRLINE.................................................................................................... 22 TABLE 9 WEEKLY FREQUENCY PER DESTINATION......................................................................................... 23 TABLE 10 NUMBER OF AIRLINES PER DESTINATION ...................................................................................... 24 TABLE 11 DISTANCE OF MAJOR ROUTES ........................................................................................................... 26 TABLE 12 DISTANCE OF ORPHAN ROUTES ....................................................................................................... 26 TABLE 13 LOW MEAN PRICE ................................................................................................................................ 30 TABLE 14LOW MEAN PRICE PER DESTINATION ............................................................................................... 31 TABLE 15 RPM......................................................................................................................................................... 32 TABLE 16 ARRIVING PASSENGERS AT TIAPER COUNTRY ............................................................................... 36 TABLE 17 RATE OF CHANGE OF ARRIVING PASSENGERS ............................................................................... 39 TABLE 18 ARRIVING PASSENGERS AT TIA PER DESTINATION ....................................................................... 40 TABLE 19 RATE OF CHANGE OF ARRIVING PASSENGERS PER DESTINATION ............................................ 42 TABLE 20 DESTINATIONS ON PROXIMITY OF TIA .......................................................................................... 47 TABLE 21 ORPHAN ROUTES ................................................................................................................................. 48 TABLE 22 TIA DATA............................................................................................................................................... 48
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1. SCOPE OF REPORT The main purpose of this report is to describe the past and current air service from Tirana Albania in order to identify future marketing opportunities. The results and the aftermaths of this report shall be used as the first step of evaluation for potential routes establishment to/ from Tirana.
2. INTRODUCTION The data used for analysis, calculations and assumptions are mostly collected from internet. Sources are airline sites, newspapers, aviation forums, government organizations, airport sites, on line magazines and others as referred in each case. Moreover airline marketing sense, air transport management knowledge and other expertise may apply freely on this report without need of proof or further explanation. We take as graded that the information and data are truth and accurate but for the next step of evaluation or for a business plan the accuracy should be checked and official data may be used. Generally the report study the service offered mainly by BELLE AIR and BELLE AIR EUROPE, before withdraw of their service, mainly because they was the biggest airlines to and from Tirana and also because it was the biggest airlines in terms of fleet and ASM in modern Albania. On the same time the study does not overlook the rest airlines offering service to Tirana and of course the part studying the current situation is a survey on present routes and prices.
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PROJECT TIRANA VER 1 SUMMER 2014
The report is focusing on regional service from Tirana (and for a small part of the study on routes from Pristina). With term regional routes meaning routes of no more than 600 miles on great cycle distance. This distance is the maximum when you consider a route as regional. This is because is equal to about 2.5 hours of flight on a modern turboprop aircraft of 30 seats or more. A flight of this duration on a turboprop aircraft is near the maximum accepted by passengers in Europe. Moreover even with today’s high oil price this duration of flight with a turboprop aircraft is consider the longest route able to make profit.
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3. HISTORY OF BELLE AIR AND BELLE AIR EUROPEi
Belle Air Sh.p.k. (stylized belleair) was a privately owned low-cost airline, founded in 2005, with its head office in Tirana, Albania. Belle Air operated international flights on scheduled services to several cities in Belgium, Germany, Greece, Italy, Kosovo, Switzerland and the UK out of Tirana International Airport Nënë Tereza. Belle Air ceased operations until further notice on 24 November 2013 stating economic difficulties. Their fleet has been returned to the lessors. Belle Air Europe was a sister company to the airline, founded in 2009 and based in Ancona, Italy. It ceased operations two days after the parent company. As of 25 November 2013, operations have been temporarily suspended while the airline tries to find new investors.
i
Information sources www.Wikipedia.org, www.anna.aero, www.airliners.net
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4. HISTORY OF OTHER ALBANIAN AIRLINES & TIRANA AIRPORT.
4.1.
ii
ALBANIAN AIRLINES
Albanian Airlines MAK Sh. p.k. (trading as Albanian Airlines) was an airline based in Tirana, Albania. It operated scheduled international services. Its main hub was Tirana International Airport Nënë Tereza. On 11 November 2011 Albania’s Civil Aviation Authority revoked the license of Albanian Airlines. The airline was established in May 1991 under the name of Arberia Airlines, and was the private airline of politicians for communist Albania. It was later renamed to Albanian Airlines in May of 1992 and started open operations to the public on 20 June 1995. It was formed as a joint venture between the Albanian state-owned Albtransport and Tyrolean Airways of Austria flying a single Austrian registered, De Havilland Canada Dash 8 - 102 (MSN 242). Tyrolean opted out of the relationship in 1997, taking back the single Dash 8. Albanian Airlines was privatized in the same year and sold to Kuwaiti-based M.A. Kharafi & Sons Group. As a result, it was restructured in 1997 when its operations were based on a single Airbus A320 aircraft leased from Shorouk Air of Egypt. By 2001 it operated a fleet of 4 Tupolev Tu-134 aircraft on scheduled services from Tirana to Bologna, Frankfurt, Istanbul, Pristina, Rome and Zürich. In July 2001 Albanian Airlines started upgrading its fleet by gradually removing its Tupolev aircraft and acquired its first BAe 146. Two more BAe 146 was added in 2003 and 2004. This upgrading process allowed the company to expand to new ii
www.wikipedia.org
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PROJECT TIRANA VER 1 SUMMER 2014
strategic markets such as Belgium and Germany. In August 2008, Albanian Airlines was purchased by the Advanced Construction Group (ACG) Sh.p.k. in Tirana, Albania, by the President Yahia Farwati, who purchased 100% of capital from the Kuwaiti-based M.A. Kharafi & Sons Group. On 14 August 2009, it was announced that Albanian Airlines had been sold to Turkish Even Group, which was purchased by Evsen Group 93% and 7% retained by the Advanced Construction Group. In March 2012, the 93% of Albanian Airlines shares was return with a Court Decesion to Advanced Construction Group (ACG) with owner Yahia Farwati. Now, Advanced Construction Group (ACG) owns 100% of its shares. With this investment came a new logo, addition of destinations, and an addition of aircraft to the existing fleet. In 2009, the carrier saw the addition of aircraft are two Boeings 737 as well as one Boeing 757, all of which were leased from Air Slovakia. On 9 October 2009, it was announced that Albanian Airlines would soon open new destinations to Paris, Amsterdam, Milan, Rome, Athens, Jeddah, Beijing and later the United States of America. Along with lower rates of travel, the addition of more Fokker 100, and scheduled use of the Boeing 747, such claims fell through due to financial problems, including the repossession of all leased aircraft from Air Slovakia. In October 2011, the Albanian Airlines fleet consisted of the following aircraft with an average age of 22.5 years: 1 BAe 146-100 1 BAe 146-200 2 BAe 146-300
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4.2.
TIRANA INTERNATIONAL AIRPORT
iii
Tirana International Airport Nënë Tereza (Albanian: Aeroporti Ndërkombëtar i Tiranës Nënë Tereza, IATA: TIA, ICAO: LATI) is Albania's only international airport. It is commonly known as Rinas International Airport, as it is located 6 NM (11 km; 6.9 mi) northwest of Tirana, in the village of Rinas. In 2001, the airport was named after Mother Teresa. Tirana International Airport Nënë Tereza was constructed in a period of two years, from 1955 to 1957. However, Tirana had commercial airline services before. As early as 1938, Yugoslav carrier Aeroput commenced regular commercial flights linking Tirana with Belgrade with a landing in Dubrovnik. After the fall of communism political and social changes caused an increase in the number of airlines operating at the airport. Its reconstruction, started in 2005 and terminated in 2008, increased the processing capacity of the airport considerably, resulting in its number of passengers per year doubling from 2005 to 2010, when it reached 1.5M. The airport currently has the capacity to process 1.8M passengers per year. It is thought that such capacity will suffice to handle the expected increase given the visa liberalization for the citizens of Albania travelling to the Schengen Area, which started at the end of 2010. On 10 April 2013 the CEO of Adrian Airways, Mark Anžur, has said the Slovenian national carrier is likely to open a base in the Albanian capital Tirana. The airline’s first destination from its new base would be Frankfurt. The air traffic equipment and facilities of the airport have been heavily modernized following investments by Tirana International Airport SHPK, a consortium led by Hochtief AirPort. Hochtief assumed management of the airport on April 23, 2005, for a 20-year concession period. The concession included the construction of a completely new passenger terminal and various infrastructure improvements, among them the construction of a new access road, new parking lots, and a bridge over the old airport access road. iii
Information sources www.wikipedia.org ,www.open.data.al, www.anna.aero, www.tirana-airport.com
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The expansion resulted in an increased number of passengers per annum, estimated at 1.5M passengers for 2009. The number of passengers effectively increased to more than 1.5M in 2010. Tirana International Airport Cargo Department is a leader in Albania for cargo handling, sales, shipping and logistics. Following the opening of the new Cargo Terminal, in April 2007, this Department has constantly demonstrated affordability and maintained its leading position in this industry. The Department offers international standard solutions to all carriers operating at Tirana. Concessionaire is assessed with respect to construction performance and operational performance. Investment plans in the Concession Agreement for the reconstruction and modernization of Tirana Airport were realized on time and according to British standards. The quality of services and facilities offered by TIA remains, in general, “satisfactory” to “very satisfactory”. In matters of protection and improvement of the environment considerable progress has been made. Also TIA, in compliance with its environmental permits, procedures and environmental & health legislation, monitors noise levels, air quality, waste water parameters and potable water quality in the airport. In 2011, one of the main challenges was TIA’s optimization of energy efficiency, aimed at sustainable use of resources and energy saving. In the financial year 2011, due to increased traffic TIA reached a turnover of EUR 33.9M. The passenger and freight traffic at TIA, after the reconstruction of airport in 2007, has so far increased from year to year. The traffic flow has been accommodated in a secure and comfortable way with a very high quality of service. TIA has indicated a growth in passenger numbers of 18.2% in 2011, with Italy the main growth driver. This has been mainly due to visa liberalization. Air Traffic Movements (ATM) had a growth of 10.7% for the year 2011. Increased frequencies during the summer peak and the introduction of new routes contributed to the overall positive development. Cargo grew by 17.6% in 2011, with the increase mainly due to the introduction of dedicated cargo flights and increased mail charter services. In recent years (2011-2012) TIA has achieved its objectives and targets related to quality, environment, health and safety and social responsibility. In this regard TIA has continued raising the awareness and 12
PROJECT TIRANA VER 1 SUMMER 2014
understanding of its employees and business partners of managing environmental, health and safety effects.
FIGURE 1 TIA AIRPORT
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5. BELLE AIR OPERATIONS FLEETiv
The time of company’s collapse the BELLE AIR fleet consists of: NUMBER OF AIRCRAFTS AIRCRAFT TYPE 3 A319 2 A230 2 ATR72 1 MD81
SEATS 144 180 68 164 TABLE 1 BELLE AIR FLEET
5.1.
ROUTES
From 2005 until 2013 Belle air had growing network focusing mainly on routes to Italy but also serve some Europe. Those routes serve mainly Albanian immigrants but also some leisure destinations served during summers. At the last season of operations Belle air reach 26 routes on variable weekly frequency with total 129 departures per week. According with company and other industry sources the routes of last season from Tirana international airport (TIA) was:
iv
www.ch-aviation.com
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COUNTRY CITY AIRPORT A/C TYPE FREQUENCY BELGIUM BRUSSELS BRU 2 EGYPT SHARM EL SHEIKH SSH 1 GREECE ATHENS ATH A319/ATR72 4 GREECE HERAKLION HER A319 2 GREECE RHODOS RHO A319 1 ITALY TRIESTE TRS 3 ITALY VENICE VCE 8 ITALY RIMINI RMI 4 ITALY ANKONA AOI 7 ITALY PESCARA PSR 3 ITALY BARI BRI 11 ITALY ROME FCO 10 ITALY PERUGIA PEG 4 ITALY PISA PSA 7 ITALY BOLOGNA BLQ 7 ITALY PARMA PMF 2 ITALY VERONA VRN 7 ITALY BERGAMO BGY 8 ITALY MILANO MXP 13 ITALY CUNEU CUF 2 ITALY FLORENCE FLR 6 ITALY GENOA GOA 3 KOSOVO PRISTINA PRN 1 SPAIN PALMA DE MALLORCA PMI A320 1 TURKEY ANTALYA AYT A320 5 UK LONDON STD A320 7
ROYTE TYPE ALL YEAR SEASONAL ALL YEAR ALL YEAR SEASONAL ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR ALL YEAR SEASIONAL SEASONAL ALL YEAR
TABLE 2 BELLE AIR ROUTES TIRANA
FIGURE 2 BELLE AIR ROUTE MAP
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On the same time BELLE AIR EUROPE operates the following routes from Pristina airport: COUNTRY GERMANY GERMANY GERMANY ITALY ITALY ITALY SWITZERLAND SWITZERLAND SWITZERLAND UK SWEDEN
CITY HANNOVER STUTTGART MUNICH MILANO VENEZIA VERONA BASEL ZURICH GENEVA LONDON MALMO
AIRPORT HAJ STR MUC MXP VCE VRN BSL ZRH GOA STN MMX
TABLE 3 BELLE AIR ROUTES PRISTINA
FIGURE 3 BELLE AIR ROUTE MAP PRISTINA
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In addition a route from Skopje to Rome, Ancona and Venice was operated by ATR72.
5.2.
FARES
Although ticket prices were on dynamic yield management and changed continuously some examples of average fares including all extras and taxes have been collected as follow:
FROM TIA TIA TIA TIA TIA TIA TIA TIA TIA
TO ATH RHO PSR AOI BLQ MXP PEG RMI STN
PRICE IN EURO 220 238 178 158 143 153 178 143 135
TABLE 4 SIMPLE OF BELLE AIR AVERAGE TICKET PRICES
The average ticket price was estimated at 219 Euros.
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6. CURRENT OPERATIONS v
6.1 FLIGHTS TO TIRANA
Although BELLE AIR bankrupts many airlines still serve TIRANA INTERNATIONAL AIRPORT and some of them trying to fill the gap left by BELLE AIR. This season flight schedule was FROM AIRPORT ATHENS ATH BARI BRI BOLOGNA BLQ BOLOGNA BLQ BOLOGNA BLQ BRERGAMO BGY BRUSSELS BRU GENOA GOA ISTANBUL SAW ISTANBUL IST LJUBJIANA LJU LONDON LGW MILAN MPX MILAN MPX MILAN MPX MILAN MPX MUNICH MUC PISA PSA PISA PSA ROME FCO ROME FCO ROME FCO VENICE VCE VENICE VCE VERONA VRN VERONA VRN VERONA VRN VERONA VRN VIENNA VIE
COUNTRY AIRLINE FREQUENCYAIRCRAFT GREECE AEGEAN 7 DHC8 ITALY ALITALIA 3 A319 ITALY AIR ONE 3 A320 ITALY BLUE EXPRESS 5 B737 ITALY LIVINGSTON 2 A320 ITALY BLUE EXPRESS 5 B737 BELGIUM JETFLY 2 B737 ITALY AIR ONE 2 A320 TURKEY PEGASUS 5 B737 TURKEY TURKISH 7 A320 CROATIA ADRIA 11 CRJ200 UK BRITISH AIRWAYS 4 B737 ITALY AIR ONE 7 A320 ITALY BLUE EXPRESS 7 B737 ITALY LIVINGSTON 2 A320 ITALY MERIDIANA 7 A320 GERMANY LUFTHANSA 7 EMB195 ITALY AIR ONE 4 A320 ITALY BLUE EXPRESS 3 B737 ITALY ALITALIA 14 A319 ITALY BLUE EXPRESS 6 B737 ITALY DARWIN 3 SF2000 ITALY AIR ONE 4 A320 ITALY BLUE EXPRESS 6 B737 ITALY AIR ONE 6 A320 ITALY BLUE EXPRESS 6 B737 ITALY LIVINGSTON 2 A320 ITALY MERIDIANA 7 A320 AUSTRIA AUSTRIAN 14 F100
TABLE 5 AIRLINES SERVES TIA AT SPRING 2014 v
www.anna.aero, www.tirana-airport.com
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6.2 NEW ROUTES
After the bankruptcy of BELLE AIR many of existing airlines on TIA increase their flights and some other add routes on TIA. At the time that this report is writing the only new route is to be start is the FCU Rome to TIA from Darwin Airline ( now ETHIHAD REGIONAL ) while the announcements from SMALL PLANET ITALY airlines is consider as cancelled due to the company’s license revoke from Italian aviation authorities. Currently there are no plans from any other company to start new routes or to increase frequency to TIA.
6.3 TICKET PRICE SERVEY
The following survey on exist routes from and to Tirana is based on requisites on each airline sites for ticket booking on return economy class including taxes, fuel surcharge and all other charges but depends on each company’s policy may not include luggage, seat selection, cancellation right and other optional services. The selections will be for next available flight, after 2 weeks flight, after 1 month flight, after 3 months flight and flight on 11-12 of August (if it is available) always on economy class but if more than one option on economy class is available for example on flexible ticket the range of available prices will be mentioned. The requests are applied on 2 of March 2014 randomly and for weekday flights. All prices are for roundtrip and only for direct flights. From the following table you can see that DARWIN AIRLINS has not yet announced ticket prices, MERIDIANA sell tickets for flight after 1 April and LIVINGSTON blocks the ticket sale for summer 2014 at the time of the survey so ticket prices are for the period until May 2014. 19
PROJECT TIRANA VER 1 SUMMER 2014 FROM AIRLINE //////////// ///////////// ATHENS AEGEAN BARI ALITALIA BOLOGNA AIR ONE BOLOGNA BLUE EXPRESS BOLOGNA LIVINGSTON BERGAMO BLUE EXPRESS BRUSSELS JETFLY GENOA AIR ONE ISTANBUL PEGASUS ISTANBUL TURKISH LJUBLJANA ADRIA LONDON BRITISH AIRWAYS MILAN AIR ONE MILAN BLUE EXPRESS MILAN LIVINGSTON MILAN MERIDIANA MUNICH LUFTHANSA PISA AIR ONE PISA BLUE EXPRESS ROME ALITALIA ROME BLUE EXPRESS ROME DARWIN VENICE AIR ONE VENICE BLUE EXPRESS VERONA AIR ONE VERONA BLUE EXPRESS VERONA LIVINGSTON VERONA MERIDIANA VIENNA AUSTRIAN
FREQ ///// 7 3 3 5 2 5 2 2 5 7 11 4 7 7 2 7 7 4 3 14 6 3 4 6 6 6 2 7 14
LOW 320 191 207
231 130 198 294 433 182
NEXT HIGH 390 675 302 210 146 241 304 319 240 356 400 377 279 201 146
2 WEEKS LOW HIGH 217 297 99 675 138 288 151 146 131 234 175 300 90 200 198 356 199 400 395 141 306 131 153 N/A
578 223
1038 270
339 143
650
206
211 276
141
225 127
650 156
247
137
303
129
191 189
1038 261
287 131
200 145
249 130 145
N/A 647
797
647
797
1 MONTH LOW HIGH 165 261 99 675 127 247 132 146 121 264 144 262 100 210 198 356 139 400 296 340 113 218 111 153 103 900 339 1038 133 223 111 206 650 125 N/A 127 247 121 128 249 100 145 103 900 647 797
3MONTHS LOW HIGH 165 261 99 675 127 247 132
10/8/2014 LOW HIGH 165 261 125 675 167 262 162 N/A
131 205 126 80 198 139 296 138
182 284 262 190 356 400 340 262
179 80 198 228 351 182
151
271 190 356 400 424 280 182
N/A 103 339 116
900 1038 223
103 339 199
650
206
141 206
181
125 127
650 166
247
167
249
258
151 128
900 1038 308
262 181
140
358 180
N/A 103 647
900 947
103 677
900 947
TABLE 6 TICKET PRICES SURVEY 2014
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In total at this moment 14 different airlines serve 16 destinations with a sum of 160 weekly routes from Tirana peeked during summer season. Most destinations served by BLUE EXPERESS as follow:
AIRLINE BLUE EXPRESS AIR ONE LIVINGSTONE ALITALIA MERIDIANA
TOTAL DESTINATIONS 7 6 3 2 2
TABLE 7 DESTINATIONS PER AIRLINE
TOTAL DESTINATIONS ALITALIA
LIVINGSTONE
AIR ONE
BLUE EXPRESS
0
1
2
3
4
5
6
7
8
FIGURE 4 DESTINATIONS PER AIRLINE
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As per weekly routes from Tirana the rank comes as follow: AIRLINE BLUE EXPRESS AIR ONE ALITALIA AUSTRIAN MERIDIANA AIR ADRIA
WEEKLY ROUTES 38 26 17 14 14 11
TABLE 8 WEEKLY FREQUENCY PER AIRLINE
WEEKLY FREQUENCY PER AIRLINE AIR ADRIA MERIDIANA AUSTRIAN ALITALIA AIR ONE BLUE EXPRESS 0
5
10
15
20
25
30
35
40
FIGURE 5 WEEKLY FREQUENCY PER AIRLINE
BLUE EXPRESS a division of BLUE PANORAMA is by far the airline company with the most flights to Tirana with an average of more than five flights per day, following by AIR ONE with an average of less than four flights per day. ALITALIA come third but servicing direct only two destinations. Also noteworthy that AUSTRIAN and AIR ADRIA are in the ranked between the most 22
PROJECT TIRANA VER 1 SUMMER 2014
frequent users of Tirana International Airport but by servicing only one destination in relative high frequency. As for weekly frequency per destination the rank comes as following: DESTINATION MILAN ROME VERONA VIENNA ISTANBUL LJUBLJANA BOLOGNA VENICE MUNICH PISA ATHENS BERGAMO LONDON BARI BRUSSELS GENOA
FREQUENCY 23 23 14 14 12 11 10 10 7 7 7 5 4 3 2 2
TABLE 9 WEEKLY FREQUENCY PER DESTINATION
As expected Italian cities are the most frequent served destinations with Rome and Milan at top ranked with more than 3 daily departures. On the same time other major Italian cities like Verona, Venice, Bologna and Pisa also well served with an average of at least one departure every day. If you except Italian cities Istanbul, Vienna, Ljubljana and Munich are the most frequently connected cities from Tirana with an average of at least one departure per day. For this report only direct flight are taken into account and Bergamo is consider as a city destination and not as a secondary airport serves Milan. 23
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FREQUENCY PER DESTINATION GENOA BRUSSELS BARI LONDON BERGAMO ATHENS PISA MUNICH VENICE BOLOGNA LJUBLJANA INSTANBUL VIENA VERONA ROME MILAN 0
5
10
15
20
25
FIGURE 6 WEEKLY FREQUENCY PER DESTINATION
In some destinations more than one airline offering service with direct flights as following: DESTINATION MILAN VERONA ROME BOLOGNA ISTANBUL PISA VENICE
NUMBER OF AIRLINES 4 4 3 3 2 2 2
TABLE 10 NUMBER OF AIRLINES PER DESTINATION
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NUMBER OF AIRLINES PER DESTINATION VENICE PISA ISTANBUL BOLOGNA
ROME VERONA MILAN 0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
FIGURE 7 NUMBER OF AIRLINES PER DESTINATION
Again Milan is on the top, even if you not consider Bergamo as an airport serves Milan, but now Rome comes third together with Bologna and Verona comes second. Istanbul is the only destination outside Italy with more than one company servicing the route.
6.4 ROUTE DISTANCE ANALYSIS
For the following analysis only regional routes until 600 miles will token into account. As mentioned before this is around two and a half hours flight on a modern turboprop and is the longest distance, according to turboprop aircrafts manufactures studies, able for profits. The route distance is valid for IFR flight at FL250 as proposed by CMFU. Track distance of STAR, SID and approach is not included.
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PROJECT TIRANA VER 1 SUMMER 2014 DESTINATION ATHENS BARI BOLOGNA BERGAMO GENOA ISTANBUL LJUBLJANA MILAN PISA ROME VENICE VERONA VIENNA
CODE LGAV LIBD LIPE LIME LIMJ LTBA LJLJ LIMC LIRP LIRF LIPZ LIPX LOWW
DISTANCE 406 176 516 562 572 525 396 612 502 386 483 530 473
TABLE 11 DISTANCE OF MAJOR ROUTES
After the collapse of BELLE AIR some routes left orphan and there is not any company serve those routes or plan to serve them. The distances for the regional of those are: DESTINATION ANCONA ANTALYA CUNEO FLORENCE HERAKLION PARMA PERUGIA PESCARA PRISTINA RHODOS RIMINI TRIESTE
CODE LIPY LTAI LIMZ LIRQ LGIR LIMP LIRZ LIBP BKPR LGRP LIPR LIPQ
DISTANCE 369 717 635 467 534 544 440 312 154 557 408 446
TABLE 12 DISTANCE OF ORPHAN ROUTES
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6.5 REVENUES ANALYSIS
The following analysis of ticket prices is incomplete and has only the purpose to help on the achievement of these study goals of describing current operations and identify any future market opportunities. Due to lack of accurate data and studies for the Albanian aviation market there are many assumptions during the following calculations. In addition conditions, passenger behaviors, airline company economical performance and other values taken into account as applied on other countries or regions. In generally the results may be taken as an index and not as real and applicable numbers. For this reason the main principle of this analysis is the principle of relatively. This is mean that the same assumptions are applied for everything, so even if the final results are not accurate in real life you can compared with other results of this analysis and have a good picture of market condition and market opportunities. In future if there is the need for a business plan or for price determination an in depth study based on individual case may be applied. The first goal will be the determination of ‘MEAN LOW PRICE’. This is a term that is describing a theoretical fix price for a route and is not according to bibliography or any other term with the same name that may applied on statics, economics or marketing. The term has application only on this repor. It describes the average ticket price for a return route that an airline company should expect to receive from a passenger. In our days airline companies use dynamic yield management in order to set ticket prices this mean that price even for the same seat may vary over time. Moreover airline companies even if there are LOW COST or 27
PROJECT TIRANA VER 1 SUMMER 2014
traditional CONVENTIONAL AIRLINE offer a wide range of possible terms on the ticket that may include free or no luggage, food and beverages, FFP points, flexibility to cancel ticket or to change date of flight and others. On the same time they offer seat only ticket for price sensitive passengers closer to what everybody have in mind as low cost, no frill service. The Albanian GDP is only 25% of EU average, moreover 2.5 million Albanians lives around Europe and have major effect on passenger mix to Tirana, lastly the 3 million tourist visiting last year Albania are mostly attracted from low prices and not from high quality. All those drive us in the conclusion that the majority of passengers to or from Tirana are price sensitive. For this reason for the purposes of this analysis when a range of available price categories exist the lowest will be chosen and this is why the word LOWEST is used. The passengers do not everybody book their tickets on specific time before departure and this creates difference in the final price of each ticket. In order to identify the MEAN (or average) we have to calculate the average of all tickets (the sum of price of all tickets divided by the number of tickets). Unfortunately those data are not available. On previous table you can see sample of ticket prices taken on a specific time for 5 different possible travel dates. If we take the average of those five samples we will have a totally untruth result because passengers do not book tickets divided in equal groups but the number of tickets sold in each period before flight change. The best way is to factorize each period and then take their average. The factor that must apply for each period is different for each market and even for each market segment and it depends on factors like technology, culture, labor laws and rights, consumer credit, political and economical stability and others. Unfortunately are not available studies and 28
PROJECT TIRANA VER 1 SUMMER 2014
data for passengers behaviors when book ticket for flights to or from Albania. For this analysis we will use the following data as applied for Dublin airport:
FIGURE 8 BOOKING PATTERN DUBLIN
And summarized as follows: NEXT AVAILABLE FLIGHT 15%
FACTOR 0.15
UP TO 2 WEEKS
12%
FACTOR 0.12
UP TO 1 MONTH
26%
FACTOR 0.26
UP TO 3 MONTHS
31%
FACTOR 0.31
11/08/2014 (as an indication for prices of more than 3 months) 16%
FACTOR 0.16
By applying those factors the prices converted as follows.
29
PROJECT TIRANA VER 1 SUMMER 2014
FROM //////////// ATHENS BARI BOLOGNA BOLOGNA BOLOGNA BERGAMO BRUSSELS GENOA ISTANBUL ISTANBUL LJUBLJANA LONDON MILAN MILAN MILAN MILAN MUNICH PISA PISA ROME ROME VENICE VENICE VERONA VERONA VERONA VERONA VIENNA
AIRLINE ///////////// AEGEAN ALITALIA AIR ONE BLUE EXPRESS LIVINGSTON BLUE EXPRESS JETFLY AIR ONE PEGASUS TURKISH ADRIA BRITISH AIRWAYS AIR ONE BLUE EXPRESS LIVINGSTON MERIDIANA LUFTHANSA AIR ONE BLUE EXPRESS ALITALIA BLUE EXPRESS AIR ONE BLUE EXPRESS AIR ONE BLUE EXPRESS LIVINGSTON MERIDIANA AUSTRIAN
LOW MEAN PRICE /////////////// 194 € 117 € 147 € 151 € 145 € 153 € 251 € 161 € 94 € 198 € 184 € 337 € 146 € 151 € 150 € 103 € 375 € 153 € 150 € 217 € 150 € 135 € 152 € 158 € 144 € 144 € 103 € 652 €
TABLE 13 LOW MEAN PRICE
Flight of DARWIN AIRWAYS to Rome omitted due to lack of data. Because we need to determine one price per destination an average of the ticket prices of all companies must be calculate but each company transfer a different number of passengers so the weight of each company is different. For this reason we consider that all companies have almost the same load factor and the weekly frequency will be the factor that we will use for our calculations. 30
PROJECT TIRANA VER 1 SUMMER 2014
ROUTE ATHENS BARI BOLOGNA BERGAMO GENOA ISTANBUL LJUBLJIANA MILAN PISA ROME VENICE VERONA VIENNA
LOW MEAN PRICE PER DESTINATION 194 117 148 153 161 154 184 135 152 196 145 134 625 TABLE 14LOW MEAN PRICE PER DESTINATION
LOW MEAN PRICE PER DESTINATION 700 600 500 400 300
200 100 0
FIGURE 9 LOW MEAN PRICE PER DESTINATION
After that the AVERAGE REVENUE PER MILE of track distance can be calculated for return route (double the miles). 31
PROJECT TIRANA VER 1 SUMMER 2014
ATHENS
LOW MEAN PRICE PER DESTINATION 194
BARI BOLOGNA BERGAMO GENOA ISTANBUL LJUBLJIANA MILAN PISA ROME VENICE VERONA VIENNA
117 148 153 161 154 184 135 152 196 145 134 625
ROUTE
DISTANCE
RPM
406 176 516 562 572 525 396 612 502 386 483 530 473
0,239 0,332 0,143 0,136 0,141 0,147 0,232 0,110 0,151 0,254 0,150 0,126 0,661
TABLE 15 RPM
AVERAGE REVENUE PASSENGER MILE 0.7
0.6 0.5 0.4 0.3 0.2 0.1 0
FIGURE 10 RPM
32
PROJECT TIRANA VER 1 SUMMER 2014
The RPM fluctuates between 0,110 to 0,661 Euros per mile. Usually the longer the route the lowest the RPM. This is because the airline companies charge the passengers also for fix cost, indirect cost, ground time and cost on ground, passenger service, marketing and promotional cost and others costs that are remain constant irrelevantly of route distance. For a constant cost while miles increase the cost per mile decrease. Another fact that affects the cost per miles from Tirana is the competition. If you take into consideration that AIR ONE is in fact the low cost arm of ALITALIA and the fact that Bergamo airport is used as Milan secondary airport we can divide the destinations into two groups. The one that destinations that served by only one airline company and the destinations served by more than one airline company. The average RPM of those two groups are 0,399 Euros for destinations with only 1 airline and 0,137 Euros for destinations with more than 1 airline.
AVERAGE RPM 0.35 0.3 0.25
0.2 0.15 0.1 0.05 0 MORE THAN 1
ONLY 1
FIGURE 11 AVERAGE RPM
33
PROJECT TIRANA VER 1 SUMMER 2014
At routes that only one airline company serve the route they achieve more than double RPM and this indicates among the others that other means of transport do not consider as really alternatives to air transport in Tirana. Lastly for flights to their hubs the well established large carriers add a premium with most obvious example the flight of AUSTRIAN AIRLINES to Vienna.
34
PROJECT TIRANA VER 1 SUMMER 2014
7. ALBANIAN AVIATION MARKET The Albanian aviation market considers under development and the collapse of BELLE AIR was a major get back. The major factors that will drive the future growth of aviation sector are: the GDP that while incline to the EU average will create a large increase of income, the large base of Albanian immigrants around Europe, the increase of tourism and the decision of Albanian government to take advantage of mineral wealth.
7.1.
STATICS ANALYSIS
Static indicates an increase of passengers in Tirana over the years. Data from EUROSTAT since 2000 for arriving passengers at TIA per country and per airport follows, countries with almost zero are omitted (total passengers are almost double):
35
PROJECT TIRANA VER 1 SUMMER 2014
GEO/TIME2000
2001
2002
2003
2004
2005
2006
Belgium :
:
:
:
:
:
:
1.873 :
Bulgaria :
:
:
:
:
:
:
1.427
Czech Republic :
:
0
0:
Germany (until 1990 6.406former5.904 territory of6.313 the FRG) 6.907 Ireland
:
:
Greece
:
:
:
Spain
:
:
:
France
:
:
Italy
:
133 :
6.565 :
21.421 :
:
12 :
1
2008
2009
2010
2011
2012
2.053
7.595
12.856
15.424
1.851
697
34
155
0
359
394
159
677
254
10
243
2.929
7.313
7.603
26.079
38.385
40.831
41.211
45.875
32.619
: 28.837
2007
:
:
:
32.645
30.839
6
35
6:
70
0
1
32.743
: 33.522 4
:
:
:
38.817
40.165
53.062
47.472
267
80
2.176
932
453
365
3.253
162
53.959 104.333 137.286 154.030 212.007 234.206 296.295 340.942 386.628 467.241 579.132 531.751
Hungary :
:
28.024
33.281
31.806
32.812
35.867
30.836
26.000
34.688
27.453
35.843
3.546
Austria
:
:
20.351
26.529
43.257
49.628
51.637
50.466
51.203
42.391
45.140
60.441
70.767
Slovenia :
:
4.427
345
5.155
9.476
16.548
17.936
18.082
15.040
13.028
18.383
27.199
30.744
33.345
37.062
44.560
49.796
United Kingdom
6
: 1.644
: 125
115 :
:
TABLE 16 ARRIVING PASSENGERS AT TIAPER COUNTRY
36
PROJECT TIRANA VER 1 SUMMER 2014 80000
70000
60000
Belgium Bulgaria Czech Republic
50000
Germany Ireland Greece
40000
Spain France 30000
Hungary Austria Slovenia
20000
United Kingdom
10000
0 2006
2007
2008
2009
2010
2011
2012
FIGURE 12 ARRIVING PASSETNGERS AT TIA PER COUNTRY
37
PROJECT TIRANA VER 1 SUMMER 2014
ITALY 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
FIGURE 13 ARRIVING PASSENGERS AT TIA FROM ITALY
Italy showed separated because is the single larger market from TIA. The rates of increase per year (when large fluctuations exist due to small passengers numbers results are omitted) are:
38
PROJECT TIRANA VER 1 SUMMER 2014 GEO/TIME
2002
2003
2004
2005
2006
Germany
6,9
9,4
5,0
11,4
Greece
-
-
34,6
13,2
93,4
31,6
12,2
Hungary
-
18,8
Austria
-
30,4 8,0
-
-
Italy
United Kingdom
-
92,4
-
-
-
2007
2008
2009
2010
2011
2012
4,0
243,0
47,2
6,4
0,9
11,3
-
28,9
5,5
6,2
2,4
15,8
3,5
32,1
-
10,5
37,6
10,5
26,5
15,1
13,4
20,9
23,9
-
8,2
4,4
3,2
9,3
-
14,0
-
90,1
63,1
14,7
4,0
-
2,3
1,5
48,0
13,0
-
-
-
15,7
33,4 -
-
20,9
30,6
17,2
6,5
33,9
17,1
8,5
11,1
20,2
11,8
TABLE 17 RATE OF CHANGE OF ARRIVING PASSENGERS
300.0 250.0 200.0 Germany 150.0
Greece
100.0
Italy Hungary
50.0
Austria 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
United Kingdom
-50.0 -100.0 -150.0 FIGURE 14 RATE OF CHANGE FO ARRIVING PASSENGERS
39
PROJECT TIRANA VER 1 SUMMER 2014 REP_AIRP/TIME 2000
2001
BRUXELLES/NATIONAL : airport : FRANKFURT/MAIN airport 6.404 MÜNCHEN airport
2003
2004
2005
2006
:
:
:
:
:
5.796
2
ATHENS airport :
2002 6.311
25 : :
6.907 :
:
6.564
7.309
: 21.396
2007
1.873 : 6.239
4 : 28.829
32.630
30.826
IRAKLION/NIKOS :KAZANTZAKIS : airport:
:
:
:
:
:
RODOS/DIAGORAS : airport :
:
:
:
:
:
BARI/PALESE airport :
:
PESCARA airport:
:
MILANO/MALPENSA : airport
: 14.978 : 27.144
BERGAMO/ORIO:AL SERIO:airport TORINO/CASELLE : airport GENOVA/SESTRI: airport
:
PARMA airport
:
:
34.220
48.427 :
116 :
:
:
:
12.534
15.424
4.370
3.859
4.529
2.190
20.619
33.486
33.256
34.340
44.478
31.460
32.665
33.420
38.486
39.820
42.000
37.279
98
308
233
6.671
6.264
112
4.169
3.455
:
:
165 :
11.434
11.072
11.271
10.404
10.208
13.924
128
1.193
3.833
3.821
4.988
5.577
57.435
79.407
77.266
87.545
67.249
61.811
78.221
99.533
107.173
190
6.198
13.452
14.179
21.687
26.277
33.551
44.963
29.722
5.660
7.873
9.764
9.340
10.710
16.076
15.423
13.691
1.194
6.100
11.175
12.733
13.647
15.977
22.220
17.919
125
6.135
6.831
6.896
:
:
:
:
TRIESTE/RONCHI: DEI LEGIONARI : airport :
:
2012
103
: 31.919
:
2011
7.778
:
46 :
2010
1.766
:
29.396
:
2009
19.080
2 : :
BOLOGNA/BORGO : PANIGALE : airport :
18.854 :
:
CUNEO/LEVALDIGI : airport : FORLI airport
26.346 :
2008
:
:
:
:
4.587 : :
2.841 11.129
9.227
28.038
22.633
20.694
21.541
22.195
30.973
48.066
56.749
34.644
3.369
225
7.546
12.270
14.902
11.310
8.975
7.304
4.541
3.686
4.763
6.664
7.382
7.490
5.785
5.972
169 :
:
RIMINI/MIRAMARE : (MIL.) airport 2.248
1.034
637
339
5.324
4.571
2.807
3.250
8.474
9.995
9.632
9.589
VERONA/VILLAFRANCA : (MIL.) : airport
329
427
8.996
16.825
21.530
24.254
31.539
33.588
35.766
41.970
35.799
76
2.253
3.869
6.186
10.368
19.328
17.918
ANCONA/FALCONARA : airport :
:
VENEZIA/TESSERA : airport : ROMA/FIUMICINO: airport
: 22.738 :
PERUGIA/S. EGIDIO : airport :
:
BUDAPEST/FERIHEGY : airport : :
28.889 : :
28.024
WIEN/SCHWECHAT : airport :
20.351 :
:
: 22.946
PISA/S. GIUSTO (MIL) : airport:
LJUBLJANA/BRNIK : airport
:
:
: 192
4.056
7.649
11.789
97
46
6.080
32.570
35.087
34.519
33.207
37.513
46.476
77.712
92.633
105.118
114.495
113.777
345
6.788
13.755
16.346
21.611
21.926
27.858
48.025
48.693
:
:
:
:
:
6.035
6.078
10.693
9.310
33.281
31.806
32.812
35.867
30.836
26.000
34.688
27.453
35.843
3.546
26.366
43.257
49.626
51.637
50.427
51.196
42.391
45.134
60.441
70.767
4.427
345
5.155
9.476
16.548
17.936
18.082
15.040
13.028
TABLE 18 ARRIVING PASSENGERS AT TIA PER DESTINATION
40
PROJECT TIRANA VER 1 SUMMER 2014
ARRIVING PASSENGERS PER DESTINATION 140000 BRUXELLES/NATIONAL airport FRANKFURT/MAIN airport
120000
MÜNCHEN airport ATHENS airport
100000
IRAKLION/NIKOS KAZANTZAKIS airport RODOS/DIAGORAS airport BARI/PALESE airport
80000
PESCARA airport MILANO/MALPENSA airport
60000
BERGAMO/ORIO AL SERIO airport TORINO/CASELLE airport GENOVA/SESTRI airport
40000
PARMA airport CUNEO/LEVALDIGI airport
20000
BOLOGNA/BORGO PANIGALE airport FORLI airport TRIESTE/RONCHI DEI LEGIONARI airport
0 2004
2005
2006
2007
2008
2009
2010
2011
2012
RIMINI/MIRAMARE (MIL.) airport VERONA/VILLAFRANCA (MIL.) airport
-20000 FIGURE 15AT TIA PER DESTINATION FIGURE 15 ARRIVING PASSENGERS
41
PROJECT TIRANA VER 1 SUMMER 2014
REP_AIRP/TIME
2004
2005
-5,0
FRANKFURT/MAIN airport
2006
11,3
2007
-14,6
2008
-30,0
19,5
-3,8
13,0 102,6
23,9 18,8
-11,7 62,4 2,3 -3,2 -23,2 53,0 -4,3 13,9 3,0 21,5 15,8 30,0 71,7 67,2 32,2
-4,4 64,1
3,2 14,7
9,3 4,1
-14,0 -2,3 83,8
-15,7 1,5 74,6
MÜNCHEN airport ATHENS airport BARI/PALESE airport MILANO/MALPENSA airport
34,7 -28,4 18,6
13,2 1,2 38,3
-5,5 -59,2 -2,7 117,0 39,1
6,0 47,0 13,3 5,4 24,0
-12,2
-19,3
-8,6
87,0
-14,1 28,0
4,1 62,6 -38,6 12,7
BERGAMO/ORIO AL SERIO airport TORINO/CASELLE airport GENOVA/SESTRI airport BOLOGNA/BORGO PANIGALE airport FORLI airport RIMINI/MIRAMARE (MIL.) airport VERONA/VILLAFRANCA (MIL.) airport ANCONA/FALCONARA airport ROMA/FIUMICINO airport
2009
PISA/S. GIUSTO (MIL) airport
2010
17,4 -0,7 15,2 1,8 -8,1 21,2 14,7 7,2 39,5 -24,1 160,7 6,5 59,9 19,2 1,5 33,4 -17,2 8,4
PERUGIA/S. EGIDIO airport BUDAPEST/FERIHEGY airport WIEN/SCHWECHAT airport LJUBLJANA/BRNIK airport
2011
-51,6 3,3 3,5 -7,7 26,5 27,7 50,1 17,1 55,2 -20,6 17,9 6,5 67,6 13,5 27,1 0,7 -20,9 6,5 0,8
2012
-92,5 29,5 5,5 -1,9 27,2 34,0 -4,1 39,1 18,1 -18,6 -3,6 17,3 86,4 8,9 72,4 75,9 30,6 33,9 -16,8
-29,3 -11,2 36,4 7,7 -33,9 -11,2 -19,4 -39,0 -37,8 -0,4 -14,7 -7,3 -0,6 1,4 -12,9 -90,1 17,1 -13,4
TABLE 19 RATE OF CHANGE OF ARRIVING PASSENGERS PER DESTINATION
42
PROJECT TIRANA VER 1 SUMMER 2014 200.0
FRANKFURT/MAIN airport 150.0
MÜNCHEN airport ATHENS airport BARI/PALESE airport MILANO/MALPENSA airport
100.0
BERGAMO/ORIO AL SERIO airport TORINO/CASELLE airport GENOVA/SESTRI airport
50.0
BOLOGNA/BORGO PANIGALE airport FORLI airport RIMINI/MIRAMARE (MIL.) airport 0.0 2004
2005
2006
2007
2008
2009
2010
2011
2012
VERONA/VILLAFRANCA (MIL.) airport ANCONA/FALCONARA airport ROMA/FIUMICINO airport
-50.0
PISA/S. GIUSTO (MIL) airport PERUGIA/S. EGIDIO airport BUDAPEST/FERIHEGY airport
-100.0
WIEN/SCHWECHAT airport LJUBLJANA/BRNIK airport
-150.0 FIGURE 16 RATE OF CHANGE OF ARRIVING PASSENGERS PER DESTINATION
43
PROJECT TIRANA VER 1 SUMMER 2014
The picks on some airports indicates that the demand is affected a lot by the available service. LIST OF FIGURES ON CHAPTER 7.1 1) TABLE 16 Arriving passengers per country table. 2) FIGURE 32 Arriving passengers per country schematic. 3) FIGURE 33 Arriving passengers per Italy schematic. 4) TABLE 17 Arriving passengers rate of change per country . 5) FIGURE 34 Arriving passengers rate of change per country schematic. 6) TABLE 18 Arriving passengers per destination table. 7) FIGURE 37 Arriving passengers per destination schematic. 8) TABLE 19 Arriving passengers rate of change per destination table. 9) FIGURE 16 Arriving passengers rate of change per destination schematic.
44
PROJECT TIRANA VER 1 SUMMER 2014
7.2.
OTHER AVAILABLE DESTINATIONS
A plenty of destinations are not served. A list of possible destinations is following. For the choice the following factors are concerning:
1) capital 2) major city 3) tourist destination 4) economical center 5) hub airport And always destinations at a distance of around 600 miles not served presently or near past.
45
PROJECT TIRANA VER 1 SUMMER 2014
FIGURE 17 RANGE MAP
46
PROJECT TIRANA VER 1 SUMMER 2014
DESTINATION BELGRADE BRATISLAVA BRESCIA BUCHAREST BUDAPEST FORLI GRAZ IZMIR MYKONOS NAPOLI OHRID PRAGUE PRISTINA SALZBURG SANTORINI SKOPJIE SOFIA SPLIT THESSALONIKI TORINO VARNA ZAGREB ZAKYNTHOS ZURICH
COUNTRY SERBIA SLOVAKIA ITALY ROMANIA HUNGARY ITALY AUSTRIA TURKEY GREECE ITALY FYROM CZECH KOSOVO AUSTRIA GREECE FYROM BULGARIA CROATIA GREECE ITALY BULGARIA CROATIA GREECE SWITZERLAND
IATA BEG BTS VBS OTP BUD FRL GRZ ADB JMK NAP OHD PRG PRN SZG JTR SKP SOF SPU SKG TRN VAR ZAG ZTH ZRH
ICAO LYBE LZIB LIPO LROP LHBP LIPK LOWG LTBJ LGMK LIRN LWOH LKPR BKPR LOWS LGSR LWSK LBSF LDSP LGTS LIMF LBWN LDZA LGZA LSZH
DISTANCE 219 481 540 382 431 501 407 490 431 290 77 622 154 558 478 134 207 257 230 637 461 341 273 681
NOTES CAPITAL CAPITAL CITY CAPITAL CAPITAL CITY CITY HOLIDAY HOLIDAY CITY CITY CAPITAL CAPITAL CITY HOLIDAY CAPITAL GAPITAL HOLIDAY CITY CITY HOLIDAY CAPITAL HOLIDAY CAPITAL
TABLE 20 DESTINATIONS ON PROXIMITY OF TIA
As we have see above routes that served by only one company have at TIA are offered for high revenues. Moreover due to the geographical position of Tirana the routes to Italy which is the main market is not worthy to be overlapped by connected flight. The same applies also to the routes around Balkans due to absence of hubs.
47
PROJECT TIRANA VER 1 SUMMER 2014
7.3.
ORPHAN ROUTES
After the collapse of BELLE AIR some routes stays without service. There are good potentials and low risk for these routes.
DESTINATION ANCONA ANTALYA CUNEO FLORENCE HERAKLION PARMA PERUGIA PESCARA PRISTINA RHODOS RIMINI TRIESTE
CODE LIPY LTAI LIMZ LIRQ LGIR LIMP LIRZ LIBP BKPR LGRP LIPR LIPQ
DISTANCE 369 717 635 467 534 544 440 312 154 557 408 446
TABLE 21 ORPHAN ROUTES
7.4.
TIRANA AIRPORT
Tirana airport has release a limiting data. Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Passengers 560 650 785 906103 1105770 1267041 1394688 1536822 1817073 1665331
% INCREASE
Aircraft movements ? ?
22,04 14,58 10,07 10,19 18,24 -8,35
15400 15856 18258 19194 20064 20768 22988 20528
TABLE 22 TIA DATA
48
PROJECT TIRANA VER 1 SUMMER 2014
% INCREASE 25.00 20.00 15.00 10.00 5.00 0.00 2007
2008
2009
2010
2011
2012
-5.00 -10.00 FIGURE 18 RATE OF INCREASE OF PASSENGERS AT TIA
50,1% BELLE AIR 9,6% ALITALIA 8,1% AUSTRIAN 17,1% OTHERS 9,1% AIRONE FIGURE 19 MARKET SHARE AT
5,5% TURKISH
49
PROJECT TIRANA VER 1 SUMMER 2014 2000000
PASSENGERS AT TIA
1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 2004
2005
2006
2007
2008
2009
2010
2011
2012
FIGURE 20FIGURE PASSENGERS 20 AT TIA
With exception of 2012 TIA have constant increase above European rate. Finally Albanian economy growth fast according to UN statics. Some basic items are follows: GDP: Gross domestic product (million current US$)
2011
13000
GDP: Gross domestic product (million current US$)
2010
11954
GDP: Gross domestic product (million current US$)
2005
8159
GDP: Growth rate at constant 2005 prices (annual %)
2011
2.0
GDP: Growth rate at constant 2005 prices (annual %)
2010
3.9
GDP: Growth rate at constant 2005 prices (annual %)
2005
5.8
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With GDP growth of around 2% an increase of around 4% of airline passengers is expected.
Tourist arrivals at national borders (000)
Tourist arrivals at national borders (000)
Tourist arrivals at national borders (000)
2011
2010
2005
2932
Excludes nationals residing abroad. Arrivals of nonresident visitors at national borders.
2417
Excludes nationals residing abroad. Arrivals of nonresident visitors at national borders.
748
Excludes nationals residing abroad. Arrivals of nonresident visitors at national borders.
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Even more promising is the increase of tourist. With tourist already reach 3 million and rate of increase near to 20% great potentials of air traffic growth is forecasting.
7.5.
MARKET ACCESS
Tirana international airport has a promotional package to attract new airlines. Most important are the reduce of airport fees up to 100% for the first year but also assistant on marketing and other kind of aids offered to help new airlines to start flights to TIA.
7.6.
SEASONALYTY
Tirana international airport shows moderate seasonal variation. For the years 2007, 2008 and 2009 the moth with the less passengers was always February and the month with highest passengers traffic was August. Moreover for all those 3 years the passengers numbers follows the same pattern with a steady increase. The factor of the month with the higher passengers traffic to this with the less passengers traffic is 2.6 for 2007, 2.15 for 2008 and 2.3 for 2009. In order to flatten any high variation of traffic on a specific month 3 month average is a more accepted method to determine the seasonal variation. With this method the factors of the top 3 to bottom 3 months are 1.9 for 2007, 1,7 for 2008 and also 1,7 for 2009 (all values are rounded). As a conclusion the factors for seasonality are within an acceptable range for market variation with the peak season has less than double passengers than the low season. Moreover the 3 months of 52
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traffic peak are concentrated allowing for more easy resource planning. Lastly by using Anna.aero SVID calculatorvi we take a result of almost 9 which is on the upper limits of GOOD allowing for a quite comfortable route planning.
FIGURE 21 TIRANA SEASONALITY
vi
http://www.anna.aero/databases/
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8. CONCLUSIONS After the communist era of Albania the aviation sector of the country suffer from stagnation on the past practice and remain underdeveloped for years. This situation change with two decisive steps. The first was the new terminal and the operation of the airport from HOCHTIEF AirPort GmbH. Together with new equipment, training of staff and generally up trim of air navigation agent get the Albanian aviation in line with European standards. Soon after the establishment of BELLE AIR take off the Albanian aviation! BELLE AIR was the only the only modern Albanian company. By creating new markets, by offering to the locals the first touch with modern practices on aviation marketing and by boosting tourism BELLE AIR had a major impact on local economy, an impact that is even more obvious by its absence. The gap left after BELLE AIR bankrupts is only partially replenished by other airline companies. Only the trunk routes replaced and limiting competition on some routes driving prices at very high levels. Moreover the revolution started from BELLE AIR has been left incomplete. The most important is that the rate of increase of GDP in connection in the increase of tourism in Albania promising a continuous growth for the next years and this makes Albania an island of opportunities in contrast with the mature markets of the 54
PROJECT TIRANA VER 1 SUMMER 2014
rest of Europe. An important advantage of Albanian market is the fact that there are a lot of routes still not served by any airline. Taking into account that those routes have an established volume of candidate passengers and are known to the public by their previous operator makes those routes a perfect start with the necessary volume of passengers to break even at low risk. As it proofed, routes served by only one airline from TIA enjoyed more than double on revenues than the routes served by more than one company. On the other hand some special treatment must be used in Albania due to some specialties. One of them is that the internet and the use of credit cards, two important tools on aviation marketing are not spread over the population on the same level as Europe. Moreover bureaucracy, old fashion habits on the way of acting the government power and some periods of political instability may create obstacles on the way that someone could make business in Albania. In addition the low income of general population is on around of 25% of EU average makes the market very price sensitive. Lastly must be taken on the account that Albania is not yet a full member of EU, so people and companies may not have the same rights like on the rest of EU. As a conclusion immediate initiation of flights to TIA is suggested. The start could be this summer with a selection of routes that not served by any other company after the collapse of BELLE AIR and some charters flights to leisure destinations. After the first step more routes to unnerved destinations could be added initially at low frequencies in emphasizing on high load factors in order to keep prices low. Of course close cooperation with local agents must be established in order to bypass the initial problems. 55
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After the completion of the first round of market research and when having more accurate data and after take decisions about routes and aircraft type another more detailed study must be held.
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