Albania hopes new airport projects can bring down air fares and boost international connectivity

For over a decade, Tirana International Airport Nënë Tereza has been the sole international air gateway into Albania. Built in the 1950s and named after Roman Catholic nun and missionary Mother Teresa, the facility is now handling over two million passengers per annum. A strict concession agreement has now ended and the airport sold to a Chinese investor under new terms that allows for new airport developments across Albania.

Kukës International Airport Shaikh Zayed in the north of the country has already started to see interest from LCCs and now Albania’s Prime Minister Edi Rama announced this week that the Government received “investor interest” for the construction of Vlora Airport. This is a proposed airport development to serve the former capital of Albania, Vlorë, which is the third largest city in Albania. It is also the second largest port city in the country after Durrës.

MAP – Vlorë is located around 150 kilometres to the south of Tirana, but would offer enhanced connectivity to communities in the south of AlbaniaSource: Google Maps

Looking more closely at this new project, part of the government’s plan to develop transportation in the south of the country, we are already seeing investor interest, which could see construction work commence in Jun-2018. This interest has reportedly been received from a Turkish consortium comprising the construction groups Cengiz, Kalyon and Kol. That investor group is part of a wider consortium which is constructing and will operate Istanbul New Airport.

The choice of Vlorë for what might be the country’s third international airport has possibly been driven by tourism, which has become an important industry there in recent years, with numerous hotels, recreational centres, and six large beaches. The city overlooks the Bay of Vlorë, which is considered the frontier between the Adriatic and Ionian seas. It has 300 sunny days per year, about the same as the Costa Blanca.

In addition, Vlorë was a significant place in classical antiquity.  The city was founded by the ancient Greeks in the 6th century BC and named Aulōn. The city was also an important port of the Roman Empire and played its part in more recent history, too.

Still, with a local municipal population of only 130,000, many of whom may never travel outside of Albania anyway, it is something of a speculative venture. What may have attracted them is the surprising track record of the nation’s monopoly international airport in Tirana. In 2005 it was privatised by way of a BOOT concession (Build-own-operate-transfer) to Tirana International Airport SHPK (TIA) on a 20-year deal to develop the airport up to 2025.

TIA had three shareholders: AviAlliance (previously Hochtief); Deutsche Investitions- und Entwicklungsgesellschaft (DEG) (German Investment and Development Corporation. DEG is a subsidiary of KfW); and the Albanian-American Enterprise Fund, an organisation founded by the US administration to support the development of private enterprise in Albania.

Then, in Apr-2015, China Everbright Limited announced that Keen Dynamics Limited, its JV with Friedmann Pacific Asset Management Limited, signed an agreement to acquire Tirana International Airport SHPK. Upon closing of the deal, KDL took over Tirana’s airport concession until 2025 (with two years extension to 2027).

Especially during the period when the original concessionaire was in place traffic grew quickly and steadily with the exception of one bad year (2012). The most impressive growth had been in the previous year (18.2%). And since the concession transfer that growth has continued, registering 11% in 2016 (the most recent year for which statistics are available).

CHART – Tirana International Airport has seen traffic levels grow significantly this decade with four consecutive years of year over year traffic growth since 2012Source: CAPA – Centre for Aviation and OAG

Tirana International Airport now has a broad range of airlines serving it, including major flag carriers. The largest one by seat capacity is the Italian scheduled/charter airline Blue Panorama followed by Fly Ernest Srl, another Italian carrier and a virtual one offering flights between Albania and Italy, with services operated by Mistral Air, a subsidiary of the Italian Post Office.  There are few LCCs momentarily; the largest is Turkey’s Pegasus Airlines; Wizz Air will add London to its existing Budapest flights from Apr-2018,;while Norwegian will debut a seasonal Oslo link this summer.

The location of the southern airport has raised major questions for the government because the new agreement with Tirana International Airport Concessionary firm excluded the construction of another international airport within a 100km distance. Previously, it was rumoured that Gjirokastra, Saranda, and Delvina were possible locations of the airport and indeed Saranda remains on the government’s project list. Again, this is all reliant on an investor being found and delivering on a construction promise.

We use cookies and other web technologies to collect anonymous data about the usage of this website so that we can better serve your needs. If you'd like more information on this data please see our Privacy Settings. By clicking "I Agree" below, you are agreeing to allow us to collect additional usage data.