Palanga Airport to receive European Commission aid for reconstruction

The European Commission (EC) has approved investment aid for the reconstruction of Palanga Airport in Lithuania.

Investment amounting to €10.25 million is planned for the modernisation of the airport’s infrastructure, specifically reconstruction of the runway, taxiway, southern and northern aircraft aprons, and refurbishment of engineering systems.

Work is due to begin on 6 September 2021, with the airport’s activities paused for 45 days, during the main period of reconstruction.

The European Commission assessed the public support measure under EU State aid rules, in particular under the 2014 Guidelines on State Aid to Airports and Airlines. The EC found that the funding would improve connections to, and from, Palanga and facilitate development of the region.

It also was stressed that the aid was proportionate and limited to the minimum, meaning that it does not exceed the limits of the lack of financing of capital costs and the maximum allowable aid intensity.

In addition, the EC found that the aid is unlikely to have a negative impact on the situation of other airports located in the same catchment area.

The public procurement for reconstruction of the runway at Palanga Airport, announced by Lithuanian Airports in autumn 2020, was won by the Latvian company A.C.B., who were responsible for the reconstruction of the runway of Vilnius Airport in 2017. This company undertook to carry out all of the planned works for €13.6 million (excluding VAT).

The remaining part of the overall reconstruction investment (without the investment package approved by the EC) will be covered by a loan from the Nordic Investment Bank.

“The runway at Palanga Airport was last reconstructed in 2007, which means that its life cycle is already towards its end and investment in refurbishment is needed,” explained Dainius Čiuplys, Head of the Operations and Infrastructure Department of Lithuanian Airports.

“We are confident that a strategically important airport in the Lithuanian coastal region will be popular as the aviation market recovers, and the demand to travel through will certainly remain, as evidenced by the double-digit increase in passenger numbers at this airport, as recorded before the pandemic. Our main task in the context of this project is to ensure that the recovery of aviation takes place in a secure infrastructure and generates added value for the whole region.”