In Moldova, in order to solve problems in civil aviation, it is necessary to revise the tax policy of the Chisinau airport and propose new tools for attracting airlines to it - IPRE.
This was stated by the expert of the Institute for European Policy and Reforms (IPRE) Stanislav Ghiletchi in his new study on the problems of civil aviation in Moldova and ways to solve them. He recalled that on February 27, the Hungarian airline Wizz Air announced the suspension of all flights to and from Chisinau from March 14. The suspension followed six months after the resumption of operation of the Wizz Air base in Chisinau from September 2022 (a break in activity from 2022 was caused by the war in Ukraine). The Wizz Air base in Chisinau consisted of 3 aircraft and served 16 routes. Air Moldova has canceled many flights since early March. According to the information provided to the public, the disruptions were caused by a lack of available aircraft. And on March 19, FlyOne announced the postponement of some flights due to a technical malfunction of one of the aircraft. In this context, IPRE analyst Stanislav Ghiletchi prepared an analytical note in which he assessed how much consumers will be affected, what are the prospects for the development of the Chisinau airport and what policies should be pursued by the authorities to attract new players. According to the author, since 2011, the Moldovan authorities have made significant efforts to increase competition between airlines and reduce ticket prices. In 2014-2019 the implementation of the provisions of the Common Airspace Agreement had a great impact on the promotion of tourism and the economic development of the country. But recent developments give an alarming signal about the development of this area, at least in the medium term. The exit of Wizz Air, coupled with the growing problems of Air Moldova, could negate the progress of recent years. These two companies represented approximately 50% of the total number of seats available at Chisinau Airport in recent years. The reduction in the number of flights and the decrease in the number of companies operating at the Chisinau airport will inevitably lead to an increase in prices for consumers, which already had a tendency to increase due to inflationary pressure. The aviation industry in Moldova has suffered more than the world average. If the total number of passengers carried in the world in 2020 decreased by more than 60% compared to 2019, then in Moldova the drop was even more significant - 69%. At the same time, although the recovery in 2021 and 2022 was significant, 2 years after the start of the pandemic, the number of passengers transported has not yet fully recovered. In 2022, about 83% of the passengers carried in 2019 were transported in the world, and only 77% in Moldova. This poor achievement of the Chisinau airport is also due to the high level of airport taxes compared to other cities in the region (Bucharest, Iasi, Sofia). In terms of airport charges among the 4 cities, Bucharest Airport is the most expensive, followed by Chisinau Airport. According to the IPRE expert, at the moment there is a decrease in the number of routes and the level of competition between airlines operating at the Chisinau airport. According to the analysis, today the variety of routes in Chisinau has returned to the level of 2014. However, the efforts of the authorities are aimed at opening a regional airport. According to the expert, given that the authorities are going to take over the full management of the Chisinau airport, it would be justified to continue investing in it, given that a solid infrastructure base already exists. And part of the financial resources that will be directed to the modernization of another airport should be redirected to the development and implementation of an attractive policy to increase the number of companies that will be interested in operating flights from this airport. In the context of the analysis, the IPRE expert made a number of recommendations. According to him, the indicators show that Moldova has potential for companies in the aviation industry. Therefore, the efforts of the authorities to attract new operators to the Chisinau airport should be continued, and efforts to develop other airports in the country should be stopped. In addition, he considers it necessary to revise the tax policy of the capital's airport and propose new tools to attract airlines. Stanislav Ghiletchi noted that it is not clear whether the incentive policy introduced in 2019 is still in effect. Given the high level of concentration at Chisinau Airport, it is critical that the incentive policy be assessed and adjusted as necessary to attract new operators. He also advocates for consistent communication regarding the situation in the industry. The expert pointed out that the discussions around Wizz Air and Air Moldova show a discrepancy between the vision and perception of the authorities and the market. In his opinion, also contradictory statements regarding Air Moldova testify to strained relations between the company and the authorities. “With air travel virtually in the public domain, it is important that any public communication about the state of the industry be objective and well-calculated. Otherwise, certain statements could further undermine consumer confidence in companies, leading to financial hardship,” said the IPRE expert.//27.03.2023 — InfoMarket.
