Riga International Airport: becoming a lead player

Posted: 30 November 2007 | Krišjanis Peters, Chairman of the Board | No comments yet

From the capital of Latvia, Riga, you can reach “Riga International Airport” in 7 minutes. Latvia is located between the Baltic States (Lithuania and Estonia) and therefore it can cover larger territories. Approximately 2.5 million people in the Baltic States live within a two-hour drive and 3.6 million people live within a four-hour drive from Riga airport.

From the capital of Latvia, Riga, you can reach “Riga International Airport” in 7 minutes. Latvia is located between the Baltic States (Lithuania and Estonia) and therefore it can cover larger territories. Approximately 2.5 million people in the Baltic States live within a two-hour drive and 3.6 million people live within a four-hour drive from Riga airport.

Riga airport has enjoyed fast growth for the last three years. Today we are the biggest airport in the Baltic States. The number of passengers is still growing and the airport is providing a number of new flights. Statistics show that, in 2007, the number of passengers handled at Riga airport will be close to that of Tallinn and Vilnius airports combined. It is important to maintain the speed of growth and capability, to provide a high level of customer service.

Riga International Airport is also the fastest growing airport in Europe. In March, a new departure terminal was opened with the capability to handle four million passengers per year. Currently, this terminal is used by the low cost airlines and passengers who are heading to countries which are not part of the Schengen zone.

The number of passengers passing through Riga International Airport has increased since Latvia joined the European Union in 2004 and it became much easier to travel. In 2004, Riga airport handled 1 million passengers for the first time in its history and in 2007 that number should increase to three million passengers per year.

Riga airport plays host to 16 airlines. The national airline of Latvia, airBaltic, carries almost half of the total number of passengers and enjoys the status of ‘most successful airline.’ In the first 10 months of 2007, airBaltic carried 1,195,396 passengers from Riga airport, or 44.9% of the total number. The second most popular airline is the low cost airline Ryanair of Ireland, which in the first 10 months handled one quarter of the total number of passengers. Latcharter with more than 143 thousand passengers ranks third, followed by KLM with more than 93,000 and EasyJet Airlines with more than 78,000 passengers.

Several airlines have shown an interest in operating flights from Riga airport. It will increase the competition among airlines and provide new destinations for passengers. National airline airBaltic has confirmed that in the next few years it will open several new destinations in Russia and CIS (Commonwealth of Independent States).

Regular flights in November will connect Riga to 59 cities and the number of destinations increases every year. For example, in 2007 Riga airport offers 17 new destinations. The most popular destination in 2007 so far has been London. 267,612 passengers, or 10.9% of the total number, travelled to the capital of Great Britain. The second favourite destination was the capital of Ireland – Dublin, which was the destination for 192,772 passengers or 7.8% of the total number. Stockholm and Berlin also ranked among the most visited cities with 6.5% and 5.8% passengers respectively. Also, Copenhagen and Frankfurt exceeded a 5% margin of the total number of handled passengers.

The range of non-aviation services has also increased for the convenience of our customers. A number of new shops, customer service facilities and cafés have been opened.

One of the key factors in the growth of Riga airport has been its advantageous charges. Since 2006, the airport has been able to grant discounts to airlines, according to the number of handled passengers. The discounts range from 10% to 80%. The airport charges 12.18 EUR for each passenger travelling on a commercial flight, except children under the age of two, governmental flights and emergency flights. As an example, if airlines can guarantee 250,000 handled passengers per year, then the airport’s charges are 80% lower. Riga airport was the first to introduce this discount policy and now several airports in the Baltic region and Europe use it. Applying such discounts to cross-subsidising does not take place. It is essential that all airlines have a chance to receive discounts by providing sufficient numbers of passengers.

The change of strategy and continuous investments in the reconstruction and modernisation of the terminal, enables the fast development of the airport.

Right now we are working hard on the development of the airport. The preliminary design has been worked out and approved for the airport’s development stages 5 and 6 and is based on an initial report approved by the Ministry of Transport of the Republic of Latvia. We are looking to increase the handling capacity of the airport by up to 7.5 million passengers per year, with a possibility to increase it up to 10, then to 15 and eventually up to 20 million passengers per year.

It is planned to build a new departure terminal, a new aircraft pier and to expand the apron area. We also plan to reconstruct the existing terminal, to create a more convenient and spacious airport for both passengers and airlines until 2010. These operations will be carried out in several stages and by 2010 four of them should be completed.

In the autumn of 2008, the passenger check-in and baggage make-up temporary facilities will be completed. These will serve passengers during the construction of our new departure terminal.

The second stage will include the building of the new departure terminal, which will be located in the short-term parking area. It is planned to set the foundation stone of the new terminal at the end of 2008 and to complete the construction by the end of 2010.

A new aircraft North pier and the connection between pier and terminal are part of the third stage, as well as the expansion of the apron. During stage 4 we plan to broaden the aircraft North pier and complete the building of the apron. We also plan to finish the reconstruction of the terminal.

It is projected that 400,000,000 EUR will be invested by 2010. The major development and modernisation of infrastructure will begin in the summer of 2008, but the runway is already being reconstructed and upon completion will be 3200 metres in length. It will allow us to host larger aircraft and to handle intercontinental flights. After the implementation of these projects, not only the visual image of the airport will change, it will be able to handle 15,000,000 – 20,000,000 passengers per year. IATA data shows that by 2011, air traffic in Latvia will increase by 12.1% per year. It will be the fastest growth in the world among the airports, where the number of passengers handled exceeds 2 million per year.

This year “Riga International Airport” expressed its readiness to join the Schengen Agreement zone. All conditions have been met and the airport is ready to split the passenger flow to Schengen and non-Schengen zone countries. It provides the monitoring of passenger movement and transportation on the apron heading to and from the aircraft. It has also designed and equipped the border control cabins and infrastructure around them, according to all requirements for passengers heading to countries which are not part of the Schengen zone.

We forecast that the number of handled passengers in 2008 will increase by 30% due to joining the Schengen Agreement zone. In the next few years it is also planned to introduce a visa-free regime with the United States of America.

The focus on creating Riga, the capital of Latvia, as the centre of business and conferences will also alter the environment around the airport.

At the end of 2006, tender was announced on the rental rights to use the territory of the business park at the Riga airport. JSC EBO International won the tender and signed a contract to create three, three-and-a-half and four-star hotels, offices, a conference and exhibition centre, as well as a park and green area. It means that the airport, by including such facilities, will transform from Riga airport to Riga airport-city. It will change from being ‘the place where people cross the border’ to an important public centre.

In the territory of Riga airport business park, a sorting complex of ‘Latvijas pasts’ a cargo handling centre and an “SAS” pilot academy have already been built. Right now the production complex of ‘Press House’ and a logistics centre are being built.

However, these are plans for the near future. The airport is creating a plan of strategic development for the next 50 years. It is also planned to build a modern railway or high-speed tram between Riga city and Riga airport by 2013, in close cooperation with Riga City Council and terrestrial passengers’ transportation operators.

My vision is that Riga airport will become a real competitor in Northern Europe. This task will not be easy, of course, but we have all of the conditions to become one of the lead players in Northern Europe and we are successfully implementing it.

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