The Strategy and Implementation of as a Baltic Hub

NCCL Executive Industrial Policy Seminar Arturs Saveljevs Riga, November 5, 2009 Director Commercial Department Introduction to RIGA Airport

● RIGA Airport was built in 1974. It was used for domestic flights within the USSR

● After regained its independence in 1991 – RIGA Airport became an

● RIGA International Airport is operated by SJSC RIGA International Airport

● The owner of all shares is the Republic of Latvia

● Airport occupies the area of 650 ha

● Airport has more than 1300 employees

● The annual turnover is 35 million EUR (2008) Continuing development

Runway rehabilitation (1994) New arrivals terminal (1999) Pier (2001)

New terminal (~2013)

Non-Schengen terminal (2006) extension (2008) Passenger statistics

+10% +17% +27%

+33% +77%

2004 - breakthrough: ● Airport charges were lowered ● Latvia joined European Union ● First low-cost airlines started their operations at RIX Baltic Passenger Traffic 2000 - 2009

Today RIGA International Airport is the no.1 airport in the Baltic States, providing Service of the highest quality and having a very significant role in the development of Latvia

4 550 000

4 050 000

3 550 000

3 050 000

2 550 000

2 050 000

1 550 000

1 050 000

550 000

50 000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

* forecast

Source: Riga Airport, Airport, Airport RIX, the centre of the Baltic’s!

• Riga is located within a 300km radius of all three Baltic capital cities

• The map illustrates a 300km radius from capital cities Vilnius and Tallinn

• Riga has a direct access to more than 7 million citizens of Baltic states

• RIGA International Airport is the principal gateway for international visitors to Latvia and Baltic States Passenger Traffic Forecast

16

14

12

10

8

6 Passengers(m)

4

2

Source: IATA 0 2008 2012 2018 2023 2028 2032

IATA’s Long Term Passenger Forecast suggests that Riga Airport will be handling 14 million passengers by 2032 Airlines serving Riga Market Share Jan-Sep 2009 (Passenger Base)

Air Baltic Corporation KLM SmartLynx Airlines 22 % 65 % CSA * top 10 airlines

The main carrier at RIGA International airport is Air Baltic – the national airline of Latvia Successful Development of Passenger Transfer Hub

Jan-Sep 2009 32 % of RIX passengers were transfer passengers

2007 Jan-Sep 2009 Transfer O&D

93% Transfer O&D

7% 68%

2008 32%

Transfer O&D

84% In JAN – SEP 2009 the transfer passenger volume has grown by 194 % comparing to the same period in 2008

16% Source: Riga Airport Riga Airport’s Network Integral Part of the Region More than 370 direct flights per week to Baltic Sea Region, the fastest growing region in Europe! East meets West in Riga! Expanding Eastern network RIX, the most competitive airport for location and price!

Airport fee Old fees New fees November 1, 2009 RIX has Passenger fee 12.18 EUR 3.10 EUR introduced the lowest fees in Per departing PAX Europe for a capital city airport Landing fee 8.12 EUR 2.05 EUR Per 1000 t (MTOW)

Airport services charges for B737-500 in EUR

3000.00

2500.00

2000.00

1500.00

1000.00

500.00

0.00 HEL () ARN CPH LED WAW RIX (Riga) TLL (Tallin) VNO (Vilnius) OSL () * ()** () (St.Petersburg) ()***

total cost 631.00 1838.52 2179.17 2225.60 1817.47 2589.03 2195.794.57 2422.52 212

Currency exchange rates used from July 2009 Source: Riga International Airport, , , Arlanda Airport, , Oslo Airport, St. Petersburg Airport, Warsaw Airport Business Park development

The total area of Business Park is more than 90 ha

Logistic centre, cargo warehouses, mail sorting centre, pilot’s academy are already built

Hotels, exhibition centre, convention centre, office buildings, car parks will be built in the near future

Total investments: ~ 300 million EUR Baltic Business Aviation Centre

1st stage of the Project includes: ● Construction of Business Aviation passenger terminal (~400 m2)

● Construction of aircraft hangar (~2500 m2)

After opening:

● BBAC will be able to handle more than 2000 flights per year ● More than 50 Business Aviation aircrafts is planned to be based at RIGA International airport TOTAL investments: ~ 5 000 000 EUR

Opening date: 31 MAR 2010 MRO Centre

The Project includes: ● Construction of technical hangar for aircrafts: B737, B757, A319, A320, A321, etc. (~10 000 m 2)

● Development of technical laboratories ● Development of educational center for aviation engineers and technicians

TOTAL investments: ~ 8 500 000 EUR

Opening: 2012 Aviation vs Non-aviation

2000

2009*

77% Aviation income

Non-aviation income 23% Aviation income 58%

Non-aviation 42% income 2008

60% Aviation income Non-aviation income share has grown from 23 % Non-aviation in 2000 to 42 % in 2009 (forecast) 40% income

* forecast International recognition

RIGA International Airport - winner of Routes Europe the Airport Marketing Award 2009 as the best airport in Scandinavia & the Baltic’s Conclusion

For a regional airport to achieve positive results in a tight competition it is vital to work hand in hand with government institutions and airlines

To become a successful airport it is very important to be commercially orientated, putting as much emphasis on non-aviation business as on aviation business Thank you!