INSIGHT: Second airport will help to revitalise Latvian economy

After the renovation, Liepaja airport can be operated under ICAO Cat I regulations (Photo by SIA Aviasabiedriba)

The US$ multi-million transformation of a regional airfield into Latvia’s second international airport is expected to kick-start a boost to the Baltic state’s economy. Liepaja Airport, 182 kilometres to the south-west of the capital city’s established Riga International Airport, has been revitalised with an injection of more than US$7m. Funding for the refurbishment was mainly borne by the European Union Cohesion Fund (85%), whilst the Liepaja authorities proffered the remaining 15%.

The revamp included re-paving the runway, ramp and taxiway – which was also widened – and the installation of Cat I lighting facilities, as well as drainage work. Additionally, two specialised vehicles were purchased for the fire fighting and rescue services.

Latvia is the only Baltic State with a single commercial airport. Lithuania has three: Vilnius, Kaunas and Palanga, whilst Estonia has five at Tallinn, Tartu, Kuressaare, Kardla, and Parnu.

Liepaja’s renewed facility will not only alter this status quo but is also expected to gradually improve the country’s economic fortunes. The refurbished airport, which, in September of this year, was granted permission to offer commercial flights, is scheduled to resume business in the spring of 2017 after closing for renovation work in 2014.

The Latvian authorities had previously considered the possibility of launching commercial air transport services at the city of Daugavpils (some 200 kilometres to the south-east of Riga) and the town of Ventspils (155 kilometres to the north-west). Both airports, controlled by their respective regional administrations, were mentioned in an expansive national sustainable development strategy for up to 2030. Although the Ministry of Regional Development and Self-Administrations ordered the document be drawn up more than five years ago, no action has since been taken regarding Daugavpils or Ventspils.

An existing major development project for a privately-owned airport at the resort-town of Jurmala, which occupies a former military airfield 45 kilometres to the west of Riga Airport, appears to have been interrupted after the facility’s licence was revoked in the spring of 2015.

These deliberations meant the only realistic option was to revive Liepaja, which had already been managing international flights, unlike other Latvian regional airports. Two years ago, it was offering low-cost airBaltic services from Riga to Hamburg and Copenhagen. The airport also handled Moscow services operated by Russian carrier Atlant-Soyuz turboprop aircraft.

SIA Aviasabiedriba, the company tasked with managing the newly updated Liepaja Airport, is fully owned by Liepaja municipal administration. Board member Agris Sprude says it is too early to predict when the investment will be recouped because the impetus behind the airport’s renovation is to facilitate the long-term economic development of the region.

As a part of the refurbishment effort Liepaja airport purchased new fire fighting vehicles (Photo by SIA Aviasabiedriba)

He believes that Liepaja will be successful despite its close proximity to the established international Riga facility and to Lithuania’s successful Palanga Airport, which is located 61 kilometres to the south, and which served almost 97,000 passengers in the first half of 2016 – up 53% year-on-year. “Both airports have their pluses and minuses but, in general, they are very similar,” asserts Sprude.

“We are happy for Palanga’s successful development, which illustrates that regional airports can indeed perform well. Both airports have their business niches and they will complement each other in the future.”

Sprude predicts close cooperation between Riga and Liepaja. “Neither airport is in private hands, meaning the priority will be Latvia’s overall economic growth – not the profitability of individual facilities,” he reflects.

It is hoped airBaltic will return to Liepaja. “Although our vision is broader than flights to the capital city, we will most likely resume scheduled services with the Liepaja-Riga route,” Sprude adds.

“At the same time, we are convinced that for Liepaja and the broader region to develop, we need to go further and offer regular passenger services to other major destinations, including in Russia and the CIS,” he adds.