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Economics behind the Rinas boom

2024-12-10 14:58:00, Aktualitet Klodian Tomorri

In 2019, Rinas airport processed 3.3 million passengers in total. At the end of the fiscal year, the concessionaire company, then owned by the Chinese, reported 25 million euros in profit. So 7.6 euros profit for each passenger who had traveled through the airport.

Last year, Rinasi processed 7.3 million passengers. For the same year, the concessionaire company, now owned by Kastrati, reported 30 million euros in profits. On average, today the airport earns 4.1 euros per passenger. So 44 percent less.

This is the classic law of supply and demand.

Everyone benefits from the reduction of abusive prices. Citizens pay much less. The concessionaire keeps the same profit even more because of the increase in demand that the low prices bring. The government receives more revenue from taxes and concessionary dividend for the same reason. And meanwhile, the Airport has three times more direct lines, 2.5 times more passengers travel through it and 2 times more employees are employed.

For almost 20 years, Rinas airport was managed as a classic monopoly. In a monopoly, companies do not care about the general welfare of society, but go and set the highest possible price, where they think they maximize their profit. This has happened with foreign concessionaires in Rinas, from Germans to Chinese.

And the monopoly is not only bad in terms of prices, but also in the service it provides. Because the monopolist does not spend to invest. Compare the airport today with the airport 5 years ago.

However, airport fees are only part of the explanation for Rinas's boom. The rest are breaking the oligopoly of flights. For two decades, this oligopoly kept the ticket prices, among the most expensive in Europe, and flying was a luxury for Albanians.

Today, Rinas airport is the one with the lowest prices in the region. And the best confirmation is in geography. Until yesterday, Albanians used to go to Montenegro, Skopje or Athens to fly. Now the flow of passengers flows in the opposite direction. Today Montenegrins and Macedonians flocking to fly to Rinas.

What is the public saving from breaking the flight oligopoly, which has reduced ticket prices. A simple calculation is enough for this. In the 10 million passengers that the figure has reached now, just a 20 euro reduction in ticket prices is a 200 million euro public saving.

Expensive tickets have been one of the main reasons that penalized tourism in Albania. How much do local businesses earn today from airport-driven tourism?

Now the question is, are foreign investors always the good guys and big local businesses, the devil? The airport has an answer. Ah yes, the time has come, the time has come. But in this case, a local "devil" did it, not a foreign "angel". The foreigners, as they were, only extort./ CNA