airBaltic and Wizz Air Fill Vilnius Void Following Air Lituanica Closure

Latvian flag carrier airBaltic and Central and Eastern European low-cost airline specialist Wizz Air are providing a further commitment to the Lithuanian aviation market with the introduction of additional routes from Vilnius International Airport and increased frequency in some existing markets after the closure last week of local carrier Air Lituanica.

The regional airline closed its doors at 12:00 Noon on May 22, 2015 after operating flights that morning between Vilnius and Amsterdam, Paris and Tallinn. It is the latest in a long line of airline failures in Lithuania, which is proving to be among Europe’s most difficult country markets to serve. The airline, which takes its name from the small aircraft that was flown by Lithuanian aviation pioneers Steponas Darius and Stasys Girėnas across the Atlantic Ocean in 1933, was partly supported by the State with the Vilnius City Municipality holding a 34 per cent shareholding,

It had hoped to succeed where previous national entities Lithuanian Airlines and flyLAL had failed by establishing a sustainable network of routes from the Lithuania. It hoped to overcome the problems of its predecessors and help establish new air services in the country and rather than establishing itself as a large national entity, instead flying smaller regional jet equipment on high frequency routes to key destinations where there is both leisure, but most importantly, corporate demand.

Air Lituanica has not stated the reason for its closure, but despite the late notice of its service suspension ended its operations in a responsible manner, working with airBaltic on an agreement to transport passengers for an initial eight day period, but extended this week to a 14 day period. “Airline management, acting responsibly and seeing risk not to fulfil commitments for the passengers, are stopping all regular flights and will make all the efforts so that travellers will be affected as little as possible. The solution for some passengers is already found,” it said in a statement on its website.

The Independent Lithuanian carrier inaugurated operations between Vilnius and Brussels on June 30, 2013 and had grown its network at its closure to ten destinations, acting as the sole operator on seven of these routes – Berlin Tegel, Billund, Hamburg, Munich, Paris CDG, Prague, Stockholm Bromma. It competed with airBaltic to Amsterdam, Estonian Air to Tallinn and Brussels Airlines and its Brussels launch route.

Alongside supporting Air Lituanica’s passengers, airBaltic will introduce flights into four of the city markets served by Air Lituanica from Vilnius from September this year, while also introducing additional direct flights from the Lithuanian capital and boosting capacity in existing markets. From September 3, 2015, the airline will launch flights between Vilnius and Berlin, Brussels, Helsinki, Paris, Stockholm and Warsaw, while boosting its Riga route up to five times daily and Amsterdam service to seven weekly.

The airline’s chief executive officer, Martin Gauss, has called for greater consolidation across the Baltic markets and said the closure of Air Lituanica was a “strong signal that the three Baltic countries should take a common approach to their aviation, to best support travellers, new economic activity, and new jobs.”

“Our home market for airBaltic is Latvia, Lithuania and Estonia. We will consolidate and strengthen our service in our home market by offering more direct flights. We announce the first direct routes out of Vilnius to Western and Northern Europe today and will evaluate additional ones gradually,” he added.

Low-cost carrier Wizz Air will also introduce flights between Vilnius and Stockholm with a three times weekly offering launching from September 15, 2015, while it will also fill the void between the Lithuanian capital and Billund with twice weekly flights from September 14, 2015. This will leave Hamburg, Munich and Prague as markets no longer served directly from Vilnius.

Although Air Lituanica was Lithuania’s largest home carrier, it was only the third largest carrier at Vilnius International Airport by capacity with just an 8.5 per cent share off departure seats based upon flight schedules for last month. According to OAG Schedules Analyser, Wizz Air is the largest carrier at Vilnius International Airport (24.0 per cent share), followed by Ryanair (21.1 per cent), while airBaltic is the fourth largest operator (7.7 per cent).

Since the three Baltic States of Estonia, Latvia and Lithuania gained independence from the Soviet Union in the early 1990s the aviation industry in Lithuania initially failed to record the growth levels of its neighbours, as the table below highlights, due partly to the lack of a strong local operator. However, growth from low-cost carriers during the past decade has slowly enabled the market to partly fulfill its potential. Based on this year’s schedules Ryanair is the largest international carrier from Lithuania with a 40.3 per cent share of the available seat capacity this year, followed by Wizz Air with a 15.4 per cent share.

In the early 1990s Lithuania was actually the largest of the three Baltic markets accounting for 46.5 per cent of the international flights from the three countries. However, just ten years later this share had subsequently declined to 21.6 per cent in 2009, but recent route developments and restructuring of networks in Estonia and Latvia has meant this started to grow again from 2010.

In the chart, below, we look more closely at annual international capacity offerings from each of the three Baltic States over the past ten years.