Riga International Airport – the air traffic hub of the Baltic region

Over the last five years Riga International Airport has presented one of the highest growth rates in the industry, by consistently increasing the number of passengers on average by 20% a year. Since 2004 Riga International Airport has raised the passenger number five times, reaching 3.6 million in 2008 and setting a target of 4.1 million for this year.

Despite the crisis in the European and global aviation market and a decline in the passenger turnover in the majority of airports in Europe since the second half of 2008, Riga International Airport in 2009 continues to increase its passenger flow. In the first four months of 2009 we have raised our passenger flow by 9% year on year. To date, Riga International Airport is the aviation centre of the Baltic States and the fastest growing airport in Northern Europe. Cooperation with airlines in development of convenient flight connections has triggered rapid growth of transfer passengers. Compared with an insignificant number of transfer passengers (within a few percent) two years ago, now in a short span it has rocketed almost to 30% of the total passenger number.

The Baltic region’s leading airport has become a north-eastern European pivot, connecting the different parts of the continent thanks to schedules enabling passengers to change planes quickly and easily.

Riga is one of the cheap and obvious ways for travellers from Scandinavia to connect to destinations in and around the Mediterranean. Barcelona, Nice, Rome, Athens, Tel Aviv, Istanbul, Hurghada and other cities are now reachable directly from Riga, while across the Nordic countries direct routes connect passengers coming from Linkoping, Tromso, Oulu, Kuopio, Tampere, Aalesund, Billund, Bergen and Gothenburg, as well as Stockholm, Copenhagen and Helsinki.

The connections to the east, to Russia, the CIS and Central Asian countries, are also conveniently timed for transfer passengers flying from the Nordic countries. The Baltic countries are well connected to Riga too, with multiple daily flights on the Vilnius-Riga and Tallinn-Riga routes, plus direct routes from Palanga and Kaunas ferrying in thousands of passengers.

For us, the three Baltic countries are our home market, and the Vilnius and Tallinn routes now have the biggest passenger flows. That’s understandable. There are 65 destinations available direct from Riga, compared with less than 20 from Vilnius.

Once the market is established, it’s then a matter of retaining that market and building on it, which is precisely what RIX is doing. The motivating factors are price and time. Riga currently offers some of the best connection times – something aided by the airport’s efficiency – as well as a high number of flight frequencies and some very competitive fares.

To keep the fares at their lowest possible levels and to attract new airlines to connect to Riga, a new fee structure was recently submitted to the Latvian Government. Slashing airport taxes by another 60 percent, it is expected to come into force in November, making Riga one of the cheapest airports in northern Europe for airlines and for passengers.

We achieved our fast growth by a focused business strategy and aggressive price policy. We have managed to raise the number of passengers from 700 thousand to 3.6 million. That makes us an uncontested aviation centre in the Baltic. In contrast to the majority of European airports we continue to boost our market share in the current economic situation.

The situation in the market has changed and the negative trends in the global economy and aviation industry make us look for new solutions. We are working hard to attract a private partner for the building of an essentially new airport. Last year we announced an international tender for this purpose. It attracted a lot of interest from companies such as Hochtief, GMR Infrastructure Ltd., the leading infrastructure developer in India with current assets of USD 1.5 billion and USD 6.5 billion assets under development, and other airport operators and investment companies. In the spring of this year the tender results were approved and further talks were to be conducted with a consortium of the Turkish airport operator TAV Havalimanlari Holding AS and the Latvian construction company Skonto bu-ve. Continuation of talks with the TAV/Skonto bu-ve consortium was endorsed by the government of Latvia. At the beginning of July the negotiation procedure with the consortium is to be concluded.

The private partner will be entrusted with the task of building a new airport terminal within two to three years, with the infrastructure capacity of 10 – 15 million passengers per year. The present capacity of Riga International Airport is almost exhausted, therefore a new terminal is vitally needed. The private partner is expected to invest approximately 200 – 250 million euros in this project.

In parallel with this significant project, other ambitious plans are underway in the territory surrounding RIX. Currently, the national railway company VAS Latvijas dzelzcel,š is supervising a project of a new railway connection between the airport and the centre of Riga – a fast and modern public transport link with the capital of Latvia. The prospective costs of this project are approximately 80 million EUR, and the construction period three to five years.

The airport development plans include other vast infrastructure projects: building of new access roads, reconstruction and modernisation of the runway, aircraft stands and the apron. These projects are to be implemented with co-financing from the European Union Cohesion Fund and costs are estimated at 110 million euros.

At the end of 2008 SIA Rixport commenced construction of the first multifunctional office block in the territory of Riga Airport business park. SIA Rixport intends to create a remarkable business centre in Northern Europe covering the territory of 300,000m², a unique complex among the European airports. RIXPORT, the business park of Riga International Airport, is to comprise several business functions complementing each other. The range of opportunities provided there will help attract travellers from Europe and other continents arriving in Latvia on business and holidays.

The total construction volume at RIXPORT is estimated to exceed 300,000m² and it will include several hotels, a conference and exhibition centre, office blocks, recreation areas and green territories, as well as car parks for more than 7000 vehicles. Total financial investments will exceed 400 million euros. The project is to be accomplished by 2020. RIXPORT will cover 25 ha of land.

Riga International Airport long-term goals:

• To remain the NUMBER 1 HUB in the Baltic states.
• To be a serious player in the Baltic Sea Region.
• To develop an extensive route network of over 100 direct regional and international flights.
• To expand facilities to serve 10M+ passengers per year.
• To develop RIX as a leading Airport City.
• To maintain high standards of service to all stakeholders.