PALANGA AIRPORT INCENTIVE SCHEME

Transcription

1 APPROVED By Order No. 1R th November 2015 of the Chief Executive Officer of the State Enterprise Lithuanian Airports PALANGA AIRPORT INCENTIVE SCHEME 1. PREAMBLE State Enterprise Lithuanian Airports is committed to encouraging airlines to operate new routes to/from Palanga Airport and to promote the continued and sustainable development of route network and increase the volume of passengers. This Incentive Scheme (hereinafter referred to as the Incentive Scheme/Scheme) aims to assisting the airlines to establish and sustain new routes which are not yet operated by any other airline from Palanga Airport as well as reward airlines that deliver capacity growth at Palanga. 2. DEFINITIONS Airport Charges Charges that airport is collecting for the use of Palanga Airport services and as listed in the Incentive Scheme which are payable by airline to the airport, and on which airport offers discount. Abandoned Route - 100% decrease of the overall seat capacity offered by all scheduled carriers on the route. Approved Route Route that has been granted Route Support Approval Letter from SE Lithuanian Airports. Commencement Date the actual date of the airline s first flight on the particular route, or any date that airline deems appropriate to announce as commencement date. Enterprise / Lithuanian Airports State Enterprise Lithuanian Airports. IATA season Periods of the year set by the International Air Transport Association (IATA), designed as IATA summer (from April to October) and IATA winter (from November to March). New Route Route that connects Palanga Airport and another airport that has not been operated by any carrier for the time periods as stipulated below in the Incentive Scheme terms. PLQ Palanga Airport. Termination Date three years from the Commencement Date of the particular route. Transit Stop landing and subsequent take-off of the aircraft which does not change its commercial payload during its stay at the airport. Transfer Passenger Passenger who arrives at the Airport by an aircraft and leaves it by another aircraft or the same aircraft only with a different flight number assigned in a period not exceeding 24 hours. In any case, only the Passenger who travels through the Airport on a single booking basis where the initial and the final destination airports are different shall be considered the Transfer Passenger.

2 3. INCENTIVE SCHEME Three incentives will be introduced under this Incentive Scheme: New Route Incentive. Abandoned Route Incentive. Route Growth Incentive NEW ROUTE INCENTIVE Any airline that establishes a new route from PLQ may benefit from a discount on airport charges for services provided for that route, in accordance with the set out criteria. The discount may be applied to the following airport charges: Departing passenger charge. Aircraft landing charge. Security charge. Aircraft parking charge. For the avoidance of doubt the Airport Charges do not include the following charges: Follow me charge. Centralized infrastructure fees. Or any other fees and (or charges) that may be introduced during the validity of this Incentive LEVEL OF ROUTE SUPPORT In accordance with this Incentive, the discount on airport charges shall be applicable for routes operated on a year-round basis (not routes operated only for a certain IATA season) and seasonal routes (routes operated only for a certain IATA season). a) Discounts applicable on year-round routes Approved routes operating on a year-round basis are afforded the following discounts for the first three years of operations: Period of validity New Route discount on Airport Charges specified in the Incentive Scheme 1st year of operation 70% 2nd year of operation 60% 3rd year of operation 50% 2

3 b) Discounts applicable on seasonal routes. Approved routes operating on a seasonal basis are afforded the following discounts for the first three years of operations. The start and end date of the respective summer and winter seasons are determined in accordance with the IATA scheduling seasons: Period of validity New Route discount on Airport Charges specified in the Incentive Scheme 1st year of operation 60% 2nd year of operation 40% 3rd year of operation 20% The Incentive shall be applicable for the duration of three years commencing on the Commencement Date and ending on the Termination Date. Following the Termination Date, Airport Charges will be charged at the standard rate as will be valid and published on the Termination Date ELIGIBILITY a) The proposed route is one that increases the route network and passenger traffic at Lithuanian Airports. This means that the route must give access to a market not adequately served directly, is expected to increase the overall number of passengers using the airport and is a route that has a commercial benefit to Lithuanian Airports. b) A route proposed by an airline will qualify as a New Route if the proposed route has not been operated from the airport directly in the past 12 months. c) The New Route operations commence on or after 11 th November d) The minimum frequency requirement is 2 weekly return services per IATA season. e) The proposed route is a non-stop service from Palanga Airport. Services operating with a technical stop at an airport already served from Palanga Airport may in certain circumstances be subject to the Incentive Scheme. f) Seasonal routes must operate for the full IATA season. However, Lithuanian Airports reserves the right to approve a route that operates for a shorter duration than a full IATA season. Such routes may be considered and approved if Lithuanian Airports considers that the relevant route provides a significant economic benefit to Lithuanian Airports which is not provided by any other service. g) Where traffic on a New Route is generated by reducing capacity on other routes without substantial net economic benefit to Lithuanian Airports, approval for the incentive may not be granted. This means that any new services which involve switching capacity from one service to 3

4 another, or from one airport of the Lithuanian Airports network to another, will not be subject to the incentive scheme. h) The airline is in possession of the required traffic rights to fly the proposed route. i) The New Route Incentive is not applicable to airlines that are benefiting from other special commercial arrangements with Lithuanian Airports also including application of special rates of airport charges that are valid through the period when the Incentive Scheme is valid. j) If a New Route proposed by an airline qualifies for more than one Incentive, only one Incentive will apply. k) If the airline offers new year-round route when a seasonal route connecting PLQ with the same airport as offered by the new year-round route is already receiving support on the basis of the Incentive Scheme, such offered new year-round route will not receive support. l) If the airline offers new seasonal route when a year-round route connecting PLQ with the same airport as offered by the seasonal route is already receiving support, such new seasonal route will not receive support. m) If the airline offers new year-round route or seasonal route connecting PLQ and an airport which already has route with another airport managed by the Enterprise, Lithuanian Airports reserves the right to refuse to approve such route. Evaluation Criteria form will be filled in for evaluation of the eligibility of the route (Appendix 2 of the Incentive Scheme) ABANDONED ROUTE INCENTIVE Any airline that restores operations on scheduled Abandoned Route from Palanga Airport may benefit from a discount on airport charges for services provided to that route, in accordance with the criteria set out herein. The discount may be applied to the following airport charges: Departing passenger charge. Aircraft landing charge. Security charge. Aircraft parking charge. For the avoidance of doubt the Airport Charges do not include the following charges: Follow me charge. Centralized infrastructure fees. Or any other charges and (or) fees that may be introduced during the validity of this incentive. 4

5 LEVEL OF ROUTE SUPPORT In accordance with this Incentive, the discount on airport charges shall be applicable for routes operated on a year-round basis and for routes operated only for a certain IATA season (seasonal routes). a) Discounts applicable on year-round flights. Approved routes operating on a year-round basis, are afforded the following discounts for the first year of operations: Period of validity Abandoned Route discount on Airport Charges specified in the Incentive Scheme 1st year of operation 50% b) Discounts applicable on seasonal routes. Approved routes operating on a seasonal basis are afforded the following discounts for the first year of operations. The start and end date of the respective summer and winter seasons are determined in accordance with the IATA scheduling seasons: Period of validity Abandoned Route discount on Airport Charges specified in the Incentive Scheme 1st year of operation 50% The Incentive shall be applicable for the duration of one year of operation period commencing on the Commencement Date. After expiry of such period, Airport Charges will be charged at the standard rate as will be valid and published on that date ELIGIBILITY a) A route will qualify as an Abandoned Route if it has been abandoned for more than 3 months prior to restoration of operations. For the purpose of this incentive, the cases where an airline reenters a route previously abandoned by the same airline, the route will not be considered Abandoned Route. Airline restoring operations on the route abandoned by the same airline will be eligible to use Route Growth Incentive after 1 year from the date of the last flight on the Abandoned Route. b) The operations on the Abandoned Route commence on or after 11 th November c) The minimum frequency requirement is 2 weekly return services per IATA season. d) Seasonal routes must operate for the full IATA season. However, Lithuanian Airports reserves the right to approve a route that operates for a shorter duration than a full IATA season. Such routes may be considered and approved if Lithuanian Airports considers that the relevant route 5

6 provides a significant commercial benefit to Lithuanian Airports which is not provided by any other service. e) The airline is in possession of the required traffic rights to fly the proposed route. f) Where Lithuanian Airports believes that in light of all relevant criteria the Abandoned Route shall not provide any significant economic benefit to Lithuanian Airports, Lithuanian Airports reserves the right to refuse to apply the discount. g) The Abandoned Route Incentive is not applicable to airlines that are benefiting from other special commercial arrangements with Lithuanian Airports also including application of special rates of airport charges that are valid through the period when the Incentive Scheme is valid. h) If an Abandoned Route proposed by an airline qualifies for more than one Incentive, only one Incentive will apply. i) If the airline offers to restore a route connecting PLQ and an airport which already has route with another airport managed by the Enterprise, Lithuanian Airports reserves the right to refuse to approve such route. Evaluation Criteria form will be filled in to evaluate the eligibility of the route (Appendix 3 of the Incentive Scheme) ROUTE GROWTH INCENTIVE (INCREMENTAL PASSENGER GROWTH) Incentive on Route Growth will be applied seeking to stimulate passenger traffic growth at Palanga Airport (departing and transfer passengers) LEVEL OF ROUTE SUPPORT At the end of each calendar year Lithuanian Airports will evaluate passenger increase on each route and will rebate 90% of departing passenger charges paid for the incremental passengers retrospectively to all the airlines serving the route that demonstrated at least a 5% increase in overall passenger numbers on the route in the respective year. Rebate will be distributed to eligible airlines based on each airline s growth proportion of the overall positive growth on the route ELIGIBILITY a) The Route Growth Incentive applies to commercial scheduled routes only, and carriers operating non-scheduled (e.g. charter) routes are not eligible to receive a rebate under this Scheme. 6

7 b) The Scheme will apply to commercial scheduled passenger route that carries a minimum of 3,000 passengers annually and operates to/ from Palanga Airport. This Incentive will be applicable as of c) Airline that ceases operations on the route or completely at Palanga Airport during a calendar year period will not be eligible to Route Growth Incentive rebate relating to that calendar year. d) Airlines that operate on seasonal routes that are eligible for a Route Growth Incentive rebate will receive the rebate when the seasonal operation re-commences during the following calendar year provided that their account is fully settled. e) The Route Growth Incentive is not applicable to airlines that are benefiting from special commercial arrangements with Lithuanian Airports also including application of special rates of airport charges that are valid through the period when the Incentive Scheme is valid. f) This Incentive is not applicable to the new entrant airline on the route for the 1st year. g) This incentive will be applied only to the proportion of passengers that the airline contributes to the passenger growth on a particular route in a reporting calendar year compared to the traffic delivered by the same airline on the same route in a previous calendar year. However, in all cases the maximum cap for such rebate is set at the rate, equal to the overall growth of the particular route. h) The minimum frequency requirement is two weekly return services per IATA season. i) Payments due to Lithuanian Airports shall be made without deductions. Route Growth rebate will be awarded after year end in the form of a credit. 4. DECISIONS ON ELIGIBILITY OF ROUTES AND OTHER CONDITIONS FOR PROVISION OF SUPPORT 4.1. APPLICATION a) Airlines, willing to take benefit of New Route Incentive or Abandoned Route Incentive must present a filled in written Application Form signed by an authorized person (See Appendix 1 of the Incentive Scheme). b) Applications for Route Growth Incentive may be provided in a free form and sent by avia@ltou.lt. c) Applications for New Route Incentive or Abandoned Route Incentive must be submitted at least one calendar month prior to the Commencement Date. d) Applications for New Route Incentive or Abandoned Route Incentive will not be accepted if they are submitted earlier than 6 calendar months prior to the Commencement Date. Applications sent in advance of the 6 calendar months will be considered only as expressions of interest. 7

8 e) If two or more airlines make an application for New Route Incentive or Abandoned Route Incentive within the same time frame in relation to the same route, approval will be given to the airline with the earliest Commencement Date, if the route proposals are similar in terms of capacity and frequency proposed. f) Applications for the use of Route Growth Incentive during current year must be submitted by the end of January of the current calendar year. Applications shall include the forecast of passenger traffic to be carried during the current calendar year. In case of failure to submit the application for Route Growth Incentive by the determined term, the airline will have no right to apply for Route Growth Incentive for the traffic growth generated by that airline on a particular route during a respective period APPROVAL a) An airline whose application for a respective incentive has been submitted in compliance with the terms and conditions of the Incentive Scheme, will be sent a Letter of Approval of the offered route. The airline is not eligible to any of the Incentives under the Incentive Scheme until it has received an Approval Letter. b) Once the Approval Letter for New Route Incentive or Abandoned Route Incentive has been issued, no other airline will be eligible to receive support under the terms of the Incentive Scheme for the same route as long as the approved airline is compliant with the terms and conditions of the Incentive Scheme. c) If an airline which has received an Approval Letter for New Route Incentive or Abandoned Route Incentive fails to commence operations on the route on the Commencement Date it had committed to in the Application, such approval shall automatically expire APPLICATION OF DISCOUNT a) The discount on Airport Charges for the Approved New or Abandoned Routes is set off against the airlines account. In this regard the airline is invoiced at the discounted rate. b) The approved New Route or Abandoned Route will be applied the discounted charges for the duration of its participation in the Scheme. c) Route Growth Incentive will be awarded as rebate after year end in the form of a credit and it will have no cash value. d) For the purposes of the Scheme, discounted Airport Charges will mean discount on landing, passenger charges and aircraft parking charges at the rate set in the Scheme. e) Lithuanian Airports must be notified in case an airline changes its operated scheduled timings and dates. Approval may be withdrawn if the airline does not operate to the scheduled timings or 8

9 frequency to ensure minimum required connectivity or does not comply with other terms and conditions of the Scheme. 5. AMENDMENT OR TERMINATION OF THE SCHEME a) Seasonal routes will not receive support under the Scheme for the period during which services are not provided. b) Only one airline is eligible to receive support on each New or Abandoned Route. c) If an airline operating the route fails to meet the requirements set down in the Approval Letter, Lithuanian Airports will have the right to refuse to approve new applications for use of the Incentive Scheme submitted by such airline. d) The Incentives under the Incentive Scheme will only be applicable (or will continue to be applicable) to the airline as long as the airline complies with the terms and conditions of the Scheme and the General Terms and Conditions of Use of Palanga Airport as published on e) Should the airline fail to duly settle invoices for all airport charges and any other fees and (or) charges for services provided by Palanga Airport, or fail to comply with the General Terms and Conditions of Use of Palanga Airport ( the airline may be subject to early termination of the approved Incentive by the decision of Lithuanian Airports. f) Lithuanian Airports reserves the right to withdraw Incentives offered, if it reasonably proves necessary. g) Applications submitted by the airlines under the Incentive Scheme are evaluated and recommendations on approval or rejection of the applications as well as other actions related to implementation of the Incentive Scheme shall be made to the Chief Executive Officer of Lithuanian Airports by the committee established by the order of the Chief Executive Officer of Lithuanian Airports. 9

10 Appendix 1 APPLICATION FORM Palanga Airport Incentive Scheme To be sent to avia@ltou.lt Application for the following incentive (please mark): Incentive Airline Route Destination Airport IATA Code Frequency of Operation Flights per Week Aircraft Details Commencement Date Schedule Contact person details Billing Address Address Date New Route Abandoned Route Year-round Seasonal Aircraft Type Aircraft Capacity 10

11 Appendix 2 Palanga Airport New Route Incentive Approval Evaluation Criteria Route: Airline: Criteria Applicant Airline Route Details Country Served or Not served Capacity Origin Availability of New Route Aircraft Capacity Frequency of service Details New carrier Carrier already operating flights to/from Palanga Airport EU route Non-EU route O&D route Interline/ Code share access into hub network Country not served Country already served New capacity Capacity moved from another route Capacity moved from another Lithuanian airport Year-round Seasonal More than 170 seats seats seats up to 49 seats More than 7 weekly 3-7 weekly Up to 2 weekly Potential for Airport Commercial Services Use High Medium Low 11

12 Appendix 3 Palanga Airport Abandoned Route Incentive Approval Evaluation Criteria Route: Airline: Criteria Applicant Airline Aircraft Capacity Details New carrier at PLQ Carrier already operating flights to/from Palanga Airport More than 170 seats seats seats up to 49 seats More than 7 weekly Frequency of service proposed 3-7 weekly Up to 2 weekly Potential for Airport Commercial Services Use High Medium Low 12