2019.04.18 08:06

Lithuania will be giving away 3 percent of GDP to Latvia, economist says

Jonas Deveikis, LRT.lt2019.04.18 08:06

The domination of Riga International Airport in the Baltic states is to grow even stronger in the future, a Lithuanian economist says, which might shave as much as 3-5 percent off Lithuania's GDP in Latvia's favour.

Žygimantas Mauricas, chief economist of Luminor bank, comments that, by 2040, Riga's airport can be two to three times bigger than its nearest competitor in the Baltics. Meanwhile Vilnius Airport, currently the region's second in terms of passengers, will be overtaken by Kaunas Airport, also in Lithuania, and Tallinn Airport in Estonia.

One of the reasons, Mauricas says, is that Riga Airport will be connected to the Rail Baltica line, which will allow passengers to reach it in 1 hour 44 minutes from Vilnius and 1 hour 52 minutes from Tallinn.

“This will markedly increase passenger flows from both Lithuania and Estonia, allowing Riga Airport to offer an even bigger choice of flights,” Mauricas shared on social media.

Rail Baltica is a railway infrastructure project meant to connect the Baltic states to Europe's network by 2027. The European gauge line is to run from Tallinn to Warsaw via Riga and Kaunas.

This way, Kaunas will potentially be the central hub of Lithuania and therefore Kaunas Airport will eventually become the country's biggest, Mauricas predicts, also thanks to a separate Rail Baltica branch connecting Kaunas to the capital.

“Vilnius Airport will not be connected to Rail Baltica and its development plans are quite unambitious, so it will eventually become a local city airport, much like Bratislava's in the shadow of Vienna. Some passengers will migrate to Riga and Kaunas,” according to Mauricas.

Tallinn Airport, he believes, will also lose out to Riga and Helsinki.

Due to this “oversight”, Mauricas believes, Lithuania will be giving away between 0.5 and 1 percent of its potential GDP to Latvia, while indirect costs – less tourism, investment and trade – might amount to 3-5 percent.

“Had Lithuania been more ambitious and made timely strategic decisions, the biggest airport in the Baltics could have been located in Lithuania, ideally between Vilnius and Kaunas. The investment would have paid off in one year,” Mauricas shared.

Ignas Degutis, a former head of the Rail Baltic company, assures that Vilnius Airport can still be connected to the rail, but the “concrete decision will be made in two or three years”.

He says original plans envisaged a train station for the airport, but it is not clear yet if the rail will connect it with central Vilnius or directly to the main line.

It is very important to have Rail Baltica run not just to the centre of Vilnius, but to its airport as well, agrees Marius Gelžinis, director of the company that manages the country's airports.

This would allow Vilnius Airport to attract more travelers not just from northern Lithuania, who now may favour Riga, but also northern Poland, he says.

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