Time right for Lithuanian airport privatisation and closures – Airport CEO

DELFI / Tomas Vinickas

The head of Lithuania‘s airports has said that the time is right for a private operator to take over the running of country‘s airports and that there will have to be closures as the country has too many airports.

“Lithuania has excessive infrastructure. Latvia has one airport, which is sustainable. We have three airports where the cost base is very similar. Our operating costs are very high. With this project [a private concession to run the airports] we can become leaders in the region,” said the head of Lithuanian airports Gediminas Almantas.

“Latvians and Estonians are very interested in what we are doing here. They understand that they will have to go the same way too,” said Almantas.

Almantas said smaller airports had already been closed in Finland and Sweden and Lithuania will also have to follow that strategy.

A proposal to create airports concessions for Vilnius, Kaunas and Palanga airports could be adopted in early May Almantas argued that the time is right to bring in private operators.

However MP Jurgis Razma opposing the move said that “When we do not have our own national airline, it would be painful not to have national airports as well. I definitely do not propose to plunge into the concession as any kind of salvation.”

Almantas said that Lithuania was highly dependent on two airlines – Ryanair and Wizzair, and if one of them left Lithuania, the country would feel the withdrawal very fast and for a long time.

He also pointed to the need for investment by the government of up to €200 million in the country’s airports to keep pace with international developments and questioned how it would raise funding for those needed investments.

“Last year, the number of passengers increased by 11%. This effect will taper off within two or three years. At present we can still sell a very nicely packaged product. After a few years the situation will be completely different,” said Almantas.

Under the proposed concession agreement, the state would retain overall ownership of all airports but concessions to run the three airports would be transferred to private operators.

Lithuanian Airports Board member Nerijus Pačėsa said that “These operations are difficult to manage. State enterprise status has many limitations in decision-making, with complex bureaucratic procedures, although decisions need to be made very quickly. Restrictions on borrowing also apply and there is a prohibition on states supporting airports as a sector. Large private companies have much greater bargaining power when dealing with airlines.”


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