Ex-Yu Aviation: Austrian complains over Macedonian LCC subsidies

Austrian Airlines has complained that the subsidies provided by the Macedonian government to stimulate low cost airlines to operate flights to the country are unfair and distort competition. The carrier noted it is difficult to compete in such an environment and under such circumstances. Although it has no direct competition on its double daily flights between Vienna and Skopje, rival Wizz Air will commence services from the Austrian capital to Ohrid this October. Vienna was the third busiest route out of Macedonia last year following Istanbul (both international airports) and Zurich. The Macedonian government has announced it will soon offer 880.000 euros per year over a three-year period to stimulate budget airlines to introduce new routes to the country, particularly to Ohrid. Tender procedures to award the subsidies are expected to commence this month.

The government has adopted the Program for Determining Funds Needed for Granting Financial Support to Domestic and Foreign Air Carriers, but it is yet to be determined which companies will be awarded the subsidies. "This Regulation sets out the conditions, the manner and the procedure for granting financial assistance, the content of the contract, as well as the rights and obligations of the lender and the beneficiary of the financial support. We do not yet know who, how and when these contracts will be signed and who will be interested", government spokesman Mile Bošnjakovski told "Radio Free Europe". It will be the third time that Macedonia will be offering incentives to no frills carriers, following the policy's success in 2012 and 2015, from which Wizz Air was the sole beneficiary.