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News 26 Nov 14

Macedonia Rebuffs Kosovo Over Flight Subsidies

Macedonia said that it will not stop subsidising low-cost passenger flights that boost its air traffic despite a complaint from neighbouring Kosovo.

Sinisa Jakov Marusic, Nektar Zogjani
Skopje, Pristina
Photo by: Adrian Pingstone

The Macedonian Transport Ministry said it will continue subsidising low-cost flights to and from the country despite Kosovo filing a complaint to the European Commission over what it sees as anti-competitive practices.

"Our measure for awarding financial support to domestic and foreign air carriers has been carefully analysed before it was introduced and is in compliance with European legislation," the Macedonian Ministry of Transport insisted. 

The government "will continue its financial support for air carriers in order to increase the number of flights to European destinations and allow cheaper air tickets", the ministry added.

On Tuesday, the head of Kosovo's Civil Aviation Authority, Dritan Gjonbalaj, said that Pristina had filed a complaint to the European Commission, arguing that the Macedonian subsidies create unfair competition for the airport in the Kosovo capital.

“I can say that we have filed a complaint, and we received an answer from the European Commission.  This issue is in the European focus and it is being investigated by authorities in charge," Gjonbalaj told TV channel KTV, adding that he expected that the complaint will be reviewed soon.

Macedonia recently boasted that the numbers of passengers at Skopje’s Alexander the Great airport rose by 40 per cent in the last four years and that this was growing mainly thanks to the arrival of low-cost or ‘budget’ airlines which the government has stimulated via targeted subsisidies.

The Skopje airport, which was recently reconstructed, this autumn broke the million-passenger ceiling.

The government introduced subsidies for air carriers that are willing to introduce new destinations for Macedonian passengers last year. Carriers receive 40,000 euro for each new destination and the government pays seven to nine euro for each ticket purchased on these new flights.

As a result, data from last year shows that almost half of all passengers using Skopje airport had travelled on budget airline flights, a rise of 200 per cent on the year before. 

For this year, the country set aside 4.9 million euro for subsidies, hoping to improve traffic even more.

In October the government said it would offer an additional 25 to 35 euro per passenger for tourists coming from neighbouring Bulgaria, Serbia and Bosnia. As of 2015, Macedonia is to offer subsidies of 65 euro per tourist for arrivals from Germany, the US, Britain, Kazakhstan and Azerbaijan.

The latest friction between Macedonia and Kosovo comes at a time when the memory of their recent trade war are still fresh.

In September last year, the two countries which share a mutual border slapped trade embargos to one another. Kosovo imposed an embargo on Macedonian food imports in response to Macedonia’s imposition of protectionist measures on wheat and flour imports from Kosovo. However, the dispute was resolved the same month.

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