project tirana a study on the past, present and future of albanian aviation market

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

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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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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

4.1. ALBANIAN AIRLINES .............................................................................................................................. 9

4.2. TIRANA INTERNATIONAL AIRPORT .................................................................................................... 11

5. BELLE AIR OPERATIONS FLEET ...................................................................................................................14

5.1. ROUTES ....................................................................................................................................................14

5.2. FARES ........................................................................................................................................................ 17

6. 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. 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

8. 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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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

todays 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 Nn 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.

iInformation sources www.Wikipedia.org, www.anna.aero, www.airliners.net


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4. HISTORY OF OTHER

ALBANIAN AIRLINES & TIRANA

AIRPORT.

4.1. ALBANIAN AIRLINESii

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 Nn Tereza. On 11 November 2011 Albanias 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 Zrich. 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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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 AIRPORTiii

Tirana International Airport Nn Tereza (Albanian: Aeroporti Ndrkombtar i Tirans Nn 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 Nn 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 Anur, has said the Slovenian national carrier is likely to open a base in the Albanian capital Tirana. The airlines 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 TIAs 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


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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 companys collapse the BELLE AIR fleet consists of:

NUMBER OF AIRCRAFTS AIRCRAFT TYPE SEATS

3 A319 144

2 A230 180

2 ATR72 68

1 MD81 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 ROYTE TYPE

BELGIUM BRUSSELS BRU 2 ALL YEAR

EGYPT SHARM EL SHEIKH SSH 1 SEASONAL

GREECE ATHENS ATH A319/ATR72 4 ALL YEAR

GREECE HERAKLION HER A319 2 ALL YEAR

GREECE RHODOS RHO A319 1 SEASONAL

ITALY TRIESTE TRS 3 ALL YEAR

ITALY VENICE VCE 8 ALL YEAR

ITALY RIMINI RMI 4 ALL YEAR

ITALY ANKONA AOI 7 ALL YEAR

ITALY PESCARA PSR 3 ALL YEAR

ITALY BARI BRI 11 ALL YEAR

ITALY ROME FCO 10 ALL YEAR

ITALY PERUGIA PEG 4 ALL YEAR

ITALY PISA PSA 7 ALL YEAR

ITALY BOLOGNA BLQ 7 ALL YEAR

ITALY PARMA PMF 2 ALL YEAR

ITALY VERONA VRN 7 ALL YEAR

ITALY BERGAMO BGY 8 ALL YEAR

ITALY MILANO MXP 13 ALL YEAR

ITALY CUNEU CUF 2 ALL YEAR

ITALY FLORENCE FLR 6 ALL YEAR

ITALY GENOA GOA 3 ALL YEAR

KOSOVO PRISTINA PRN 1 ALL YEAR

SPAIN PALMA DE MALLORCA PMI A320 1 SEASIONAL

TURKEY ANTALYA AYT A320 5 SEASONAL

UK LONDON STD A320 7 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:

FIGURE 3 BELLE AIR ROUTE MAP PRISTINA

COUNTRY CITY AIRPORT

GERMANY HANNOVER HAJ

GERMANY STUTTGART STR

GERMANY MUNICH MUC

ITALY MILANO MXP

ITALY VENEZIA VCE

ITALY VERONA VRN

SWITZERLAND BASEL BSL

SWITZERLAND ZURICH ZRH

SWITZERLAND GENEVA GOA

UK LONDON STN

SWEDEN MALMO MMXTABLE 3 BELLE AIR ROUTES 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 TO PRICE IN EURO

TIA ATH 220

TIA RHO 238

TIA PSR 178

TIA AOI 158

TIA BLQ 143

TIA MXP 153

TIA PEG 178

TIA RMI 143

TIA STN 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

6.1 FLIGHTS TO TIRANAv

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 COUNTRY AIRLINE FREQUENCYAIRCRAFT

ATHENS ATH GREECE AEGEAN 7 DHC8

BARI BRI ITALY ALITALIA 3 A319

BOLOGNA BLQ ITALY AIR ONE 3 A320

BOLOGNA BLQ ITALY BLUE EXPRESS 5 B737

BOLOGNA BLQ ITALY LIVINGSTON 2 A320

BRERGAMO BGY ITALY BLUE EXPRESS 5 B737

BRUSSELS BRU BELGIUM JETFLY 2 B737

GENOA GOA ITALY AIR ONE 2 A320

ISTANBUL SAW TURKEY PEGASUS 5 B737

ISTANBUL IST TURKEY TURKISH 7 A320

LJUBJIANA LJU CROATIA ADRIA 11 CRJ200

LONDON LGW UK BRITISH AIRWAYS 4 B737

MILAN MPX ITALY AIR ONE 7 A320

MILAN MPX ITALY BLUE EXPRESS 7 B737

MILAN MPX ITALY LIVINGSTON 2 A320

MILAN MPX ITALY MERIDIANA 7 A320

MUNICH MUC GERMANY LUFTHANSA 7 EMB195

PISA PSA ITALY AIR ONE 4 A320

PISA PSA ITALY BLUE EXPRESS 3 B737

ROME FCO ITALY ALITALIA 14 A319

ROME FCO ITALY BLUE EXPRESS 6 B737

ROME FCO ITALY DARWIN 3 SF2000

VENICE VCE ITALY AIR ONE 4 A320

VENICE VCE ITALY BLUE EXPRESS 6 B737

VERONA VRN ITALY AIR ONE 6 A320

VERONA VRN ITALY BLUE EXPRESS 6 B737

VERONA VRN ITALY LIVINGSTON 2 A320

VERONA VRN ITALY MERIDIANA 7 A320

VIENNA VIE 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 companys 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 companys 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 round-trip 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.


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FROM AIRLINE FREQ

//////////// ///////////// ///// LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH

ATHENS AEGEAN 7 320 390 217 297 165 261 165 261 165 261

BARI ALITALIA 3 191 675 99 675 99 675 99 675 125 675

BOLOGNA AIR ONE 3 207 302 138 288 127 247 127 247 167 262

BOLOGNA BLUE EXPRESS 5

BOLOGNA LIVINGSTON 2

BERGAMO BLUE EXPRESS 5

BRUSSELS JETFLY 2

GENOA AIR ONE 2 231 319 175 300 144 262 126 262 179 271

ISTANBUL PEGASUS 5 130 240 90 200 100 210 80 190 80 190

ISTANBUL TURKISH 7 198 356 198 356 198 356 198 356 198 356

LJUBLJANA ADRIA 11 294 400 199 400 139 400 139 400 228 400

LONDON BRITISH AIRWAYS 4 433 377 296 340 296 340 351 424

MILAN AIR ONE 7 182 279 141 306 113 218 138 262 182 280

MILAN BLUE EXPRESS 7

MILAN LIVINGSTON 2

MILAN MERIDIANA 7 103 900 103 900 103 900

MUNICH LUFTHANSA 7 578 1038 339 1038 339 1038 339 1038 339 1038

PISA AIR ONE 4 223 270 143 261 133 223 116 223 199 308

PISA BLUE EXPRESS 3

ROME ALITALIA 14 276 650 206 650 206 650 206 650 206 650

ROME BLUE EXPRESS 6

ROME DARWIN 3

VENICE AIR ONE 4 127 247 137 287 127 247 127 247 167 262

VENICE BLUE EXPRESS 6

VERONA AIR ONE 6 189 303 129 249 128 249 128 249 258 358

VERONA BLUE EXPRESS 6

VERONA LIVINGSTON 2

VERONA MERIDIANA 7 103 900 103 900 103 900

VIENNA AUSTRIAN 14 647 797 647 797 647 797 647 947 677 947

NEXT 2 WEEKS 1 MONTH 3MONTHS 10/8/2014

210

146

241

304

151

146

131

234

132

146

121

264

132 162

N/A

131

205 284

182

395

201

146

131

153

111

153

151 182

N/A

N/A

211 141 111 141 181

225 156 125 125 166

N/A

191 131 121 151 181

200

145

N/A

130

145

100

145

140 180

N/A

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 TOTAL DESTINATIONS

BLUE EXPRESS 7 AIR ONE 6

LIVINGSTONE 3

ALITALIA 2

MERIDIANA 2 TABLE 7 DESTINATIONS PER AIRLINE

FIGURE 4 DESTINATIONS PER AIRLINE

0 1 2 3 4 5 6 7 8

BLUE EXPRESS

AIR ONE

LIVINGSTONE

ALITALIA

TOTAL DESTINATIONS


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As per weekly routes from Tirana the rank comes as follow:

AIRLINE WEEKLY ROUTES

BLUE EXPRESS 38

AIR ONE 26

ALITALIA 17

AUSTRIAN 14

MERIDIANA 14

AIR ADRIA 11 TABLE 8 WEEKLY FREQUENCY PER AIRLINE

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

0 5 10 15 20 25 30 35 40

BLUE EXPRESS

AIR ONE

ALITALIA

AUSTRIAN

MERIDIANA

AIR ADRIA

WEEKLY FREQUENCY PER AIRLINE


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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 FREQUENCY

MILAN 23

ROME 23

VERONA 14

VIENNA 14

ISTANBUL 12

LJUBLJANA 11

BOLOGNA 10 VENICE 10

MUNICH 7

PISA 7

ATHENS 7

BERGAMO 5

LONDON 4

BARI 3

BRUSSELS 2

GENOA 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.


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FIGURE 6 WEEKLY FREQUENCY PER DESTINATION

In some destinations more than one airline offering service with

direct flights as following:

DESTINATION NUMBER OF AIRLINES

MILAN 4

VERONA 4

ROME 3

BOLOGNA 3

ISTANBUL 2

PISA 2

VENICE 2 TABLE 10 NUMBER OF AIRLINES PER DESTINATION

0 5 10 15 20 25

MILAN

ROME

VERONA

VIENA

INSTANBUL

LJUBLJANA

BOLOGNA

VENICE

MUNICH

PISA

ATHENS

BERGAMO

LONDON

BARI

BRUSSELS

GENOA

FREQUENCY PER DESTINATION


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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.

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

MILAN

VERONA

ROME

BOLOGNA

ISTANBUL

PISA

VENICE

NUMBER OF AIRLINES PER DESTINATION


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DESTINATION CODE DISTANCE

ATHENS LGAV 406

BARI LIBD 176

BOLOGNA LIPE 516

BERGAMO LIME 562

GENOA LIMJ 572

ISTANBUL LTBA 525

LJUBLJANA LJLJ 396

MILAN LIMC 612

PISA LIRP 502

ROME LIRF 386

VENICE LIPZ 483

VERONA LIPX 530

VIENNA LOWW 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:


ANCONA LIPY 369

ANTALYA LTAI 717

CUNEO LIMZ 635

FLORENCE LIRQ 467

HERAKLION LGIR 534

PARMA LIMP 544

PERUGIA LIRZ 440

PESCARA LIBP 312

PRISTINA BKPR 154

RHODOS LGRP 557

RIMINI LIPR 408

TRIESTE LIPQ 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


28

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


29

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.


30

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.

FROM AIRLINE LOW MEAN PRICE

//////////// ///////////// ///////////////

ATHENS AEGEAN 194

BARI ALITALIA 117

BOLOGNA AIR ONE 147

BOLOGNA BLUE EXPRESS 151

BOLOGNA LIVINGSTON 145

BERGAMO BLUE EXPRESS 153

BRUSSELS JETFLY 251

GENOA AIR ONE 161

ISTANBUL PEGASUS 94

ISTANBUL TURKISH 198

LJUBLJANA ADRIA 184

LONDON BRITISH AIRWAYS 337

MILAN AIR ONE 146

MILAN BLUE EXPRESS 151

MILAN LIVINGSTON 150

MILAN MERIDIANA 103

MUNICH LUFTHANSA 375

PISA AIR ONE 153

PISA BLUE EXPRESS 150

ROME ALITALIA 217

ROME BLUE EXPRESS 150

VENICE AIR ONE 135

VENICE BLUE EXPRESS 152

VERONA AIR ONE 158

VERONA BLUE EXPRESS 144

VERONA LIVINGSTON 144

VERONA MERIDIANA 103

VIENNA AUSTRIAN 652

TABLE 13 LOW MEAN PRICE


31

ROUTE LOW MEAN PRICE PER DESTINATION

ATHENS 194

BARI 117 BOLOGNA 148

BERGAMO 153

GENOA 161

ISTANBUL 154

LJUBLJIANA 184

MILAN 135

PISA 152

ROME 196

VENICE 145

VERONA 134

VIENNA 625 TABLE 14LOW MEAN PRICE PER DESTINATION

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).

0

100

200

300

400

500

600

700

LOW MEAN PRICE PER DESTINATION


32

ROUTE

LOW MEAN

PRICE PER

DESTINATION

DISTANCE RPM

ATHENS 194 406 0,239

BARI 117 176 0,332

BOLOGNA 148 516 0,143

BERGAMO 153 562 0,136

GENOA 161 572 0,141

ISTANBUL 154 525 0,147

LJUBLJIANA 184 396 0,232

MILAN 135 612 0,110

PISA 152 502 0,151

ROME 196 386 0,254

VENICE 145 483 0,150

VERONA 134 530 0,126

VIENNA 625 473 0,661

TABLE 15 RPM

FIGURE 10 RPM

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

AVERAGE REVENUE PASSENGER MILE


33

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.

FIGURE 11 AVERAGE RPM

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

MORE THAN 1 ONLY 1

AVERAGE RPM


34

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.


35

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):


36

GEO/TIME2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Belgium : : : : : : : 1.873 : 2.053 7.595 12.856 15.424

Bulgaria : : : : : : : 1.427 1.851 697 34 155 0

Czech Republic: : 0 0 : 359 394 159 677 254 10 243 2.929

Germany (until 1990 former territory of the FRG)6.406 5.904 6.313 6.907 6.565 7.313 7.603 26.079 38.385 40.831 41.211 45.875 32.619

Ireland : : 133 : : : : : : : : : :

Greece : : : 21.421 28.837 32.645 30.839 32.743 33.522 38.817 40.165 53.062 47.472

Spain : : : : : 6 35 6 : 267 80 2.176 932

France : : 12 : 1 70 0 1 4 453 365 3.253 162

Italy : 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

United Kingdom 6 1.644 125 115 : : 18.383 27.199 30.744 33.345 37.062 44.560 49.796

TABLE 16 ARRIVING PASSENGERS AT TIAPER COUNTRY


37

FIGURE 12 ARRIVING PASSETNGERS AT TIA PER COUNTRY

0

10000

20000

30000

40000

50000

60000

70000

80000

2006 2007 2008 2009 2010 2011 2012

Belgium

Bulgaria

Czech Republic

Germany

Ireland

Greece

Spain

France

Hungary

Austria

Slovenia

United Kingdom


38

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:

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

ITALY


39

GEO/TIME 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Germany 6,9 9,4 5,0 - 11,4 4,0 243,0 47,2 6,4 0,9 11,3 28,9 -

Greece - - 34,6 13,2 5,5 - 6,2 2,4 15,8 3,5 32,1 10,5 -

Italy 93,4 31,6 12,2 37,6 10,5 26,5 15,1 13,4 20,9 23,9 8,2 -

Hungary - 18,8 4,4 - 3,2 9,3 14,0 - 15,7 - 33,4 20,9 - 30,6 90,1 -

Austria - 30,4 63,1 14,7 4,0 2,3 - 1,5 17,2 - 6,5 33,9 17,1

United Kingdom 92,4 - 8,0 - - - - 48,0 13,0 8,5 11,1 20,2 11,8

TABLE 17 RATE OF CHANGE OF ARRIVING PASSENGERS

FIGURE 14 RATE OF CHANGE FO ARRIVING PASSENGERS

-150.0

-100.0

-50.0

-

50.0

100.0

150.0

200.0

250.0

300.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Germany

Greece

Italy

Hungary

Austria

United Kingdom


40

REP_AIRP/TIME 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

BRUXELLES/NATIONAL airport: : : : : : : 1.873 : : : 12.534 15.424

FRANKFURT/MAIN airport6.404 5.796 6.311 6.907 6.564 7.309 6.239 4.370 3.859 4.529 2.190 165 :

MNCHEN airport 2 25 : : : 4 : 20.619 33.486 33.256 34.340 44.478 31.460

ATHENS airport : : : 21.396 28.829 32.630 30.826 32.665 33.420 38.486 39.820 42.000 37.279

IRAKLION/NIKOS KAZANTZAKIS airport: : : : : : : : 98 308 233 6.671 6.264

RODOS/DIAGORAS airport: : : : : : : : : : 112 4.169 3.455

BARI/PALESE airport: : 14.978 26.346 18.854 19.080 7.778 11.434 11.072 11.271 10.404 10.208 13.924

PESCARA airport: : : : : 1.766 103 128 1.193 3.833 3.821 4.988 5.577

MILANO/MALPENSA airport: 27.144 34.220 48.427 57.435 79.407 77.266 87.545 67.249 61.811 78.221 99.533 107.173

BERGAMO/ORIO AL SERIO airport: : : : 190 6.198 13.452 14.179 21.687 26.277 33.551 44.963 29.722

TORINO/CASELLE airport: 116 : : : 5.660 7.873 9.764 9.340 10.710 16.076 15.423 13.691

GENOVA/SESTRI airport: : : : : 1.194 6.100 11.175 12.733 13.647 15.977 22.220 17.919

PARMA airport : : 2 : : : 125 6.135 6.831 6.896 4.587 : 2.841

CUNEO/LEVALDIGI airport: : : : : : : : : : : 11.129 9.227

BOLOGNA/BORGO PANIGALE airport: : 29.396 31.919 28.038 22.633 20.694 21.541 22.195 30.973 48.066 56.749 34.644

FORLI airport : : 46 : 3.369 225 7.546 12.270 14.902 11.310 8.975 7.304 4.541

TRIESTE/RONCHI DEI LEGIONARI airport: : : 169 : : 3.686 4.763 6.664 7.382 7.490 5.785 5.972

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

ANCONA/FALCONARA airport: : : : : : 76 2.253 3.869 6.186 10.368 19.328 17.918

VENEZIA/TESSERA airport: : : : 192 4.056 7.649 11.789 97 46 6.080 32.570 35.087

ROMA/FIUMICINO airport: 22.738 22.946 28.889 34.519 33.207 37.513 46.476 77.712 92.633 105.118 114.495 113.777

PISA/S. GIUSTO (MIL) airport: : : : 345 6.788 13.755 16.346 21.611 21.926 27.858 48.025 48.693

PERUGIA/S. EGIDIO airport: : : : : : : : : 6.035 6.078 10.693 9.310

BUDAPEST/FERIHEGY airport: : 28.024 33.281 31.806 32.812 35.867 30.836 26.000 34.688 27.453 35.843 3.546

WIEN/SCHWECHAT airport: : 20.351 26.366 43.257 49.626 51.637 50.427 51.196 42.391 45.134 60.441 70.767

LJUBLJANA/BRNIK airport: : : : 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


41

-20000

0

20000

40000

60000

80000

100000

120000

140000

2004 2005 2006 2007 2008 2009 2010 2011 2012

ARRIVING PASSENGERS PER DESTINATION

BRUXELLES/NATIONAL airport

FRANKFURT/MAIN airport

MNCHEN airport

ATHENS airport

IRAKLION/NIKOS KAZANTZAKIS airport

RODOS/DIAGORAS airport

BARI/PALESE airport

PESCARA airport

MILANO/MALPENSA airport

BERGAMO/ORIO AL SERIO airport

TORINO/CASELLE airport

GENOVA/SESTRI airport

PARMA airport

CUNEO/LEVALDIGI airport

BOLOGNA/BORGO PANIGALE airport

FORLI airport

TRIESTE/RONCHI DEI LEGIONARI airport

RIMINI/MIRAMARE (MIL.) airport

VERONA/VILLAFRANCA (MIL.) airport

FIGURE 15 FIGURE 15 ARRIVING PASSENGERS AT TIA PER DESTINATION


42

REP_AIRP/TIME 2004 2005 2006 2007 2008 2009 2010 2011 2012

FRANKFURT/MAIN airport -5,0 11,3 -14,6 -30,0 -11,7 17,4 -51,6 -92,5

MNCHEN airport 62,4 -0,7 3,3 29,5 -29,3

ATHENS airport 34,7 13,2 -5,5 6,0 2,3 15,2 3,5 5,5 -11,2

BARI/PALESE airport -28,4 1,2 -59,2 47,0 -3,2 1,8 -7,7 -1,9 36,4

MILANO/MALPENSA airport 18,6 38,3 -2,7 13,3 -23,2 -8,1 26,5 27,2 7,7

BERGAMO/ORIO AL SERIO airport 117,0 5,4 53,0 21,2 27,7 34,0 -33,9

TORINO/CASELLE airport 39,1 24,0 -4,3 14,7 50,1 -4,1 -11,2

GENOVA/SESTRI airport 13,9 7,2 17,1 39,1 -19,4

BOLOGNA/BORGO PANIGALE airport -12,2 -19,3 -8,6 4,1 3,0 39,5 55,2 18,1 -39,0

FORLI airport 62,6 21,5 -24,1 -20,6 -18,6 -37,8

RIMINI/MIRAMARE (MIL.) airport -14,1 -38,6 15,8 160,7 17,9 -3,6 -0,4

VERONA/VILLAFRANCA (MIL.) airport 87,0 28,0 12,7 30,0 6,5 6,5 17,3 -14,7

ANCONA/FALCONARA airport 71,7 59,9 67,6 86,4 -7,3

ROMA/FIUMICINO airport 19,5 -3,8 13,0 23,9 67,2 19,2 13,5 8,9 -0,6

PISA/S. GIUSTO (MIL) airport 102,6 18,8 32,2 1,5 27,1 72,4 1,4

PERUGIA/S. EGIDIO airport 0,7 75,9 -12,9

BUDAPEST/FERIHEGY airport -4,4 3,2 9,3 -14,0 -15,7 33,4 -20,9 30,6 -90,1

WIEN/SCHWECHAT airport 64,1 14,7 4,1 -2,3 1,5 -17,2 6,5 33,9 17,1

LJUBLJANA/BRNIK airport 83,8 74,6 8,4 0,8 -16,8 -13,4

TABLE 19 RATE OF CHANGE OF ARRIVING PASSENGERS PER DESTINATION


43

FIGURE 16 RATE OF CHANGE OF ARRIVING PASSENGERS PER DESTINATION

-150.0

-100.0

-50.0

0.0

50.0

100.0

150.0

200.0

2004 2005 2006 2007 2008 2009 2010 2011 2012

FRANKFURT/MAIN airport

MNCHEN airport

ATHENS airport

BARI/PALESE airport

MILANO/MALPENSA airport

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

PISA/S. GIUSTO (MIL) airport

PERUGIA/S. EGIDIO airport

BUDAPEST/FERIHEGY airport

WIEN/SCHWECHAT airport

LJUBLJANA/BRNIK airport


44

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.


45

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.


46

FIGURE 17 RANGE MAP


47

DESTINATION COUNTRY IATA ICAO DISTANCE NOTES BELGRADE SERBIA BEG LYBE 219 CAPITAL

BRATISLAVA SLOVAKIA BTS LZIB 481 CAPITAL BRESCIA ITALY VBS LIPO 540 CITY

BUCHAREST ROMANIA OTP LROP 382 CAPITAL

BUDAPEST HUNGARY BUD LHBP 431 CAPITAL FORLI ITALY FRL LIPK 501 CITY

GRAZ AUSTRIA GRZ LOWG 407 CITY IZMIR TURKEY ADB LTBJ 490 HOLIDAY

MYKONOS GREECE JMK LGMK 431 HOLIDAY NAPOLI ITALY NAP LIRN 290 CITY

OHRID FYROM OHD LWOH 77 CITY

PRAGUE CZECH PRG LKPR 622 CAPITAL PRISTINA KOSOVO PRN BKPR 154 CAPITAL

SALZBURG AUSTRIA SZG LOWS 558 CITY SANTORINI GREECE JTR LGSR 478 HOLIDAY

SKOPJIE FYROM SKP LWSK 134 CAPITAL

SOFIA BULGARIA SOF LBSF 207 GAPITAL SPLIT CROATIA SPU LDSP 257 HOLIDAY

THESSALONIKI GREECE SKG LGTS 230 CITY TORINO ITALY TRN LIMF 637 CITY

VARNA BULGARIA VAR LBWN 461 HOLIDAY ZAGREB CROATIA ZAG LDZA 341 CAPITAL

ZAKYNTHOS GREECE ZTH LGZA 273 HOLIDAY

ZURICH SWITZERLAND ZRH LSZH 681 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.


48

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.


ANCONA LIPY 369

ANTALYA LTAI 717

CUNEO LIMZ 635

FLORENCE LIRQ 467

HERAKLION LGIR 534

PARMA LIMP 544

PERUGIA LIRZ 440

PESCARA LIBP 312

PRISTINA BKPR 154

RHODOS LGRP 557

RIMINI LIPR 408

TRIESTE LIPQ 446

TABLE 21 ORPHAN ROUTES

7.4. TIRANA AIRPORT

Tirana airport has release a limiting data.

Year Passengers%

INCREASE

Aircraft

movements

2003 560 ?

2004 650 ?

2005 785 15400

2006 906103 15856

2007 1105770 22,04 18258

2008 1267041 14,58 19194

2009 1394688 10,07 20064

2010 1536822 10,19 20768

2011 1817073 18,24 22988

2012 1665331 -8,35 20528

TABLE 22 TIA DATA


49

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

5,5% TURKISH

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

2007 2008 2009 2010 2011 2012

% INCREASE

FIGURE 19 FIGURE 19 MARKET SHARE AT


50

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


2010 11954


2005 8159

GDP: Growth rate at constant 2005 prices (annual %)

2011 2.0


2010 3.9


2005 5.8

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2000000

2004 2005 2006 2007 2008 2009 2010 2011 2012

PASSENGERS AT TIA

FIGURE 20 FIGURE 20 PASSENGERS AT TIA


51

With GDP growth of around 2% an increase of around 4% of

airline passengers is expected.

Tourist arrivals at national borders (000)

2011 2932

Excludes nationals residing abroad. Arrivals of non-resident visitors at national borders.


2010 2417



2005 748



52

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


53

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/


54

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


55

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.


56

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.


57

1. SCOPE OF REPORT2. INTRODUCTION3. HISTORY OF BELLE AIR AND BELLE AIR EUROPE4. HISTORY OF OTHER ALBANIAN AIRLINES & TIRANA AIRPORT.4.2. TIRANA INTERNATIONAL AIRPORT

5. BELLE AIR OPERATIONS FLEET5.1. ROUTES5.2. FARES

6. CURRENT OPERATIONS6.1 FLIGHTS TO TIRANA6.2 NEW ROUTES6.3 TICKET PRICE SERVEY6.4 ROUTE DISTANCE ANALYSIS6.5 REVENUES ANALYSIS

7. ALBANIAN AVIATION MARKET7.1. STATICS ANALYSIS7.2. OTHER AVAILABLE DESTINATIONS7.3. ORPHAN ROUTES7.4. TIRANA AIRPORT7.5. MARKET ACCESS7.6. SEASONALYTY

8. CONCLUSIONS

project tirana a study on the past, present and future of albanian aviation market

Documents

project tirana ver

report project tirana

tirana international

history of belle air

belle air europe

belle air operations

revenues analysis

statics analysis