Skopje Airport subsidy probe "inconclusive"

The European Commission (EC) has said its investigation into subsidies provided by the Macedonian government to low cost airlines, primarily Wizz Air, at Skopje Alexander the Great Airport since 2012, have so far been inconclusive. The Commission launched an investigation in late 2014 after a complaint was made by the Kosovo Civil Aviation Authority, which claims the incentives have created unfair competition in the region. The EC notes it is keeping in contact with relevant authorities in both Macedonia and Kosovo but that the probe has not led to a firm conclusion on the matter. It adds it wants to put the issue of fair and transparent market conditions into context. Pristina Airport, which is busier than its counterpart in Skopje, was overtaken by the Macedonian airport in monthly passenger figures this May for the first time in over ten years.

The Macedonian Ministry for Transport and Communication says its incentives policy has been carefully analysed and is in accordance with EU rules and regulations. It adds that in 2012 the Kosovan Ministry for Infrastructure was sent additional information on the subsidy program which, it says, respects all international legal procedures. The Macedonian government launched a three-year subsidy scheme in 2012. It has proven successful with Wizz Air opening a base at Skopje Airport, which has in turn led to significant passenger and traffic growth. A fresh round of subsidies was offered last year, which led to Wizz Air basing a third aircraft in the Macedonian capital, launching a handful of new routes and introducing services from Ohrid as well.

Wizz Air says the subsidies it receives from the Macedonian government are in line with EU regulations. “Financial support is provided on a transparent basis through public tenders. We are fine and we have no issues with Brussels”, Wizz Air’s CEO, Jozsef Varadi, said. However, the head of Pristina Airport insists, “In this competitive environment we cannot catch significant growth without the support of the government. We can do our best with incentives, but in the end the government has to support it”. The Kosovo Civil Aviation Authority has based its complaint against Macedonia on the Common Aviation Area Agreement, which the European Union has signed with countries in the western Balkans. According to the Agreement, “This aviation area implies the adoption of the part of the Acquis containing the European aviation rules … The processes of market opening and regulatory convergence take place in parallel in order to promote fair competition and the implementation of common high safety, security, environmental and other standards”. Pristina Airport itself is offering a range of subsidies to stimulate traffic and passenger growth, however, these are being offered by the airport’s operator, rather than the government, as is the case in Macedonia.