Turkish Airlines helps set up national carrier Air Albania
You may have heard of such carriers as Air Malta, Air Italy, Air Serbia… But have you heard of Air Albania? The proposed new national carrier for Albania, a small country in southern Europe, is expected to begin operations within weeks. It is a joint venture between Turkish Airlines, which will hold a 49% stake in the new company, and other investors. Turkish Airlines has already been assisting Albania in setting up its national carrier, just as it previously helped Bosnia and Herzegovina’s flag carrier Air Bosna stay afloat. Why are airlines like Turkish (or Etihad) venturing out of their comfort zone into foreign airline ownership, particularly in the Balkans?
Big plans, few details
So how did this Air Albania venture come about? The country's Prime Minister, Edi Rama, who had long promised to establish a new national carrier, first announced the plans in May 2017, stating that the carrier would be set up with assistance from Turkish Airlines. He also indicated that flights under the new carrier would start within a year, airline intelligence provider ch-aviation reported at the time.
A few months later, in November 2017, Rama shared a visualization of a Boeing 737-400 with Air Albania livery on social media, stating that "half of the work is done“ and that the airline would start flying in spring 2018. Latest news suggest, however, that the airline will begin short-haul flights on European routes in summer 2018, expecting to launch its first transatlantic flights to the U.S. by December 2018, The Balkan Insight writes.
According to the Prime Minister’s announcement, Air Albania, which is to be a full service carrier, will first operate on routes from Albania’s capital, Tirana, to the capitals of neighboring countries in the Balkans: Pristina (Kosovo), Skopje (the Republic of Macedonia), Zagreb (Croatia), Podgorica (Montenegro), and Sarajevo (Bosnia and Herzegovina), ch-aviation reports.
It is most likely that the airline will be based at the country's only international airport in the capital city, Tirana International Airport (TIA) also known as Tirana International Airport Nënë Tereza or Tirana Rinas International Airport. But little else is known about the new Albanian national carrier, particularly about its prospective fleet, the precise date for its launch of operations or the flight schedule to particular destinations.
The dire state of Albanian airlines
Why is the country in need of a new flag carrier in the first place? No, it is not a re-branding strategy. Albania’s largest airline and flag carrier, the now defunct Albanian Airlines (pictured above), was established in 1992 as a joint venture between the Albanian State and Austrian regional airline Tyrolean Airways. The carrier was majority-owned by a Turkish businessman Ali Evsen.
Albanian Airlines operated scheduled international services from its hub in Tirana with a fleet of four BAe146 jets to destinations in the UK, Germany, Italy, Turkey and Kosovo, and charter services to destinations in the UAE, Saudi Arabia and Egypt. The airline ceased operations in 2011 after its Air Operator’s Certificate (AOC) was revoked over safety concerns. Since then, the country has not had a national carrier.
The second largest airline, also based in Tirana, was the privately owned low-cost carrier Belle Air (founded in 2005), which went bankrupt and ceased operations in 2013. And the list of defunct Albanian airlines goes on. Currently, the only airline operating in the country is the regional low-cost carrier Albawings (founded in 2015), which, since 2016, operates short-haul scheduled and chartered services from Tirana to destinations mostly in Italy on Boeing 737-500 aircraft.
The Turkish approach
According to The Balkan Insight, in 2017, Albania’s Prime Minister reportedly asked Turkey’s President Recep Tayyip Erdogan for his help in establishing Albania’s new national carrier. Which makes sense why Turkish Airlines – the national carrier of Turkey – has been assisting the Albanian government with the project. It remains unknown, however, what this “assistance” consists of, whether the company provides funding, aircraft or technical know-how.
Back in May 2017, when the Prime Minister made that Air Albania announcement to the public, Turkish Airlines Chairman İlker Aycı told reporters his company was working on the project's feasibility. "We will do our best, with all the accumulated experience we have as a company, to share it with our Albanian friends and brothers. We are proceeding with great speed to take all the necessary steps for the realization of this project as soon as possible," Ayci was quoted as saying by ch-aviation.
A year passed and in May 2018, the Albanian government assigned the national air traffic control agency, Albkontrol, with the task to negotiate a partnership with Turkish Airlines and an Albanian company, MDN Investment, for the creation of the national carrier, The Balkan Insight writes. According to a reached agreement, the new airline will be privately owned and have three shareholders, including Turkish Airlines. The two mentioned Albanian companies will hold the controlling share of 51%, while Turkish will have a 49% stake, Turkish news site Dünya reports.
But let us go back in time, to the year of 2008. That was when Turkish Airlines expressed interest in the struggling BH Airlines. BH Airlines began operations in 1994 under the name Air Bosna as Bosnia and Herzegovina’s national carrier, until it was declared bankrupt and ceased operations in 2003. In 2005, BH Airlines started operating again, under its current name, The Balkan Insight writes.
A Boeing 734 of the former Bosnian national carrier (Image by FaceOffic)
According to Turkish news portal Hürriyet, Bosnian government owned 51% of the Air Bosna-BH Airlines, while the rest was held by a state company Energoinvest. In an auction for the airline, Turkish Airlines was picked as the best bidder and became a shareholder with a 49% stake. However, it eventually withdrew from the venture having suffered huge financial losses. As for BH Airlines, its AOC was suspended in 2015 over financial issues and the carrier soon ceased operations for good. Since then, the small Balkan state has not had a national carrier too. See a pattern here?
In July 2017, while updating the media on the project, Turkish Airlines Chairman indicated that, with the new national carrier, the company expects Italian airlines to reduce their flights to and from Albania, thus strengthening the cooperation between the country and the Turkish company, Invest in Albania reported at the time. In fact, while the now defunct Albanian Airlines flew to a variety of destinations, the main focus was serving cities in northern Italy such as Bergamo, Bologna, Milan, Pisa and Turin, since there is a sizeable ethnic Albanian population, Routes online points out.
So what the Turkish executive remarked was not an overstatement. Annual traffic data shows that in 2016, 22,000 flights and 2.2 million passengers passed through Tirana International Airport, The Balkan Insight reports. Almost half of them were carried by Italian airlines. According to the ch-aviation capacity module, the airport is dominated by Italian carriers, the three largest being Blue Panorama Airlines, Ernest Airlines and Alitalia.
Aside of Italian carriers, the new Air Albania would mostly compete with Slovenia’s national carrier Adria Airways and Serbia’s national carrier Air Serbia. An interesting point here. Serbia's national airline, formerly known as Jat Airways, was rebranded as Air Serbia in August 2013 when Etihad Airways – the flag carrier and the second-largest airline of the UAE – acquired a minority stake from Serbia's government.
An Airbus A319 of Serbia's national carrier (Image by Konstantin von Wedelstaedt)
Throughout the years, Etihad has acquired minority stakes in several foreign airlines. Three carriers partly-owned by Etihad – Air Berlin, Darwin Airline and Alitalia – filed for bankruptcy in 2017. Hence, the company now shares much of the experience that Turkish Airlines had with its endeavors. It seems that the large gaps in the Balkan states’ aviation sectors translate into an opportunity up for grabs to some of the world’s major airlines. But does it pay off?
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