New Lithuanian Airline?

Story on Air Transport World Today:

Lithuanian capital Vilnius mayor Arturas Zuokas announced that authorities plan to launch a new local carrier called airLituanica. Details have not been disclosed but a local news website, 15min.lt, quoted Zuokas as saying city authorities could acquire 34% ownership in the new airline. He said strategic investors may acquire 49%-51% and Lithuanian investors may receive a 17% share. Flights could start in 2013.

Lithuania has not had a home-based scheduled carrier for three years. In January 2009, Vilnius (VNO)-based flyLAL (TE) declared bankruptcy and ceased operations (ATW Daily News, Aug. 16, 2010). The carrier blamed competitor AirBaltic, which launched flights from VNO on the same destinations and offered lower rates. Now several European low-cost carriers (LCCs), including Ryanair and Wizz Air, are competing in the Lithuanian market.

Former flyLAL shareholder Gediminas Ziemelis, now chairman of Avia Solutions Group, said the new carrier could find its niche in the market even though there is tough competition among LCCs.

“There are nearly 25 cities with [a] population [of] more than 350,000 people in 500-600 km. around Vilnius. The flights to these destinations will be in demand,” he said, noting that turboprops are probably the best solution for the carrier’s fleet.