30-10-2023

National authorities join forces to finance and advertise new air routes, promote inbound tourism

On Monday, the Ministry of Transport and Communications, the Ministry of Economy and Innovation and the Vilnius City Municipality signed a historic agreement on the promotion of routes important for business and inbound tourism. The aim of the agreement is to pool and coordinate the capabilities of the different authorities in order to ensure sustainable flights and passenger flows along strategic routes.

The Ministry of Transport and Communications and Lithuanian Airports have committed to develop solutions to promote the supply of flights, while the Ministry of Economy and Innovation and the Vilnius City Municipality have undertaken to allocate resources to attract travellers from priority destinations. 

Testing a new model

"By signing this agreement, we state that, for the first time in the field of civil aviation in Lithuania, we have joined forces to focus on attracting destinations important for the country, promoting inbound tourism, further increasing the competitiveness and attractiveness of Vilnius, and creating better conditions for the development of business and tourism. Lithuania's domestic market is quite small, so the number of flights, and therefore Lithuania's accessibility, are to a large extent related to the development of inbound tourism," Minister of Transport and Communications Marius Skuodis said at the Vilnius Airport Conference Centre after the signing. 

The Minister pointed out that Lithuanian airports have already gained experience in implementing a pilot project for new flight promotion. Under the investment agreement, regular flights between Vilnius (VNO) and London City (LCY) airports are in operation from 1 October this year.

This ensures convenient connections between Vilnius and the global financial centre of strategic importance for Lithuania, while at the same time developing opportunities for inbound tourism. This risk sharing model envisages the implementation of flight promotion projects also for other strategic destinations which are currently on the list approved by a ministerial decree.     

Ensuring flows

The Mayor of Vilnius noted that the capital city, which is home to the country's largest airport, had a natural interest in ensuring that the routes supported by the state were as targeted as possible, and that aircraft landing in Vilnius were as full as possible. 

"The flight promotion model to be implemented from 2024 reflects the willingness of the authorities to pursue common long-term policy objectives by pooling resources rather than competing. All stakeholders will be involved in decision-making on the priorities, with a fairly clear division of responsibilities at later stages. The Ministry of Transport and Communications and Lithuanian Airports will take care of the availability of flights, while Vilnius City and the Ministry of Economy and Innovation will ensure the increasing popularity of flights, as maximising flows is directly linked to the economic benefits for the city. According to this agreement, Vilnius could allocate up to EUR 2 million to create demand for flights next year," said Vilnius Mayor Valdas Benkunskas.

To increase the demand for flights to Vilnius Airport, the municipality will earmark up to 30% of the tourist taxes and an equal amount from the municipal budget for marketing purposes. The funding mechanism is designed to be linked to the campaign performance. If the flows of sightseeing and business tourists increase, the amount of tourist tax collected will go up as well, resulting in more funds available for flight promotion campaigns.

Aimed at attracting tourists and investments

The 27 priority destinations currently include major world cities such as New York, Brussels, Dublin, London, Amsterdam, Paris, Berlin, Warsaw, Krakow and others. All the routes on the list between Lithuanian and world cities are recognised as important for business and inbound tourism. Thus, the flight promotion campaigns foreseen in the Ministries' strategic action plans can be implemented to ensure their targeted accessibility.

"Convenient connections with other cities around the world are strategically important for Lithuania. Today we have taken another step towards creating more opportunities to grow Lithuania's economy and tourism. Recently we have found a solution for good connectivity with London's business centre, and I hope that we will soon have even more flights to destinations that are important for Lithuanian people and tourists," said Minister of Economy and Innovation Aušrinė Armonaitė.         

According to the Minister, the promotion of flights marks a new qualitative level of cooperation between project management and the country's institutions, which in the future will ensure long-term benefits for all parties, as direct connectivity with priority countries is extremely important for both Lithuanian businesses and foreign investors working in Lithuania.

Investment required

Commenting on the historic agreement, Simonas Bartkus, Chief Executive Officer of Lithuanian Airports, stressed that the document reflected a systematic approach to the development of Lithuania's relations with the world. 

"The agreement establishes a new cooperation mechanism, clearly defining the roles, responsibilities and obligations of the institutions to use targeted measures for improving Lithuania's accessibility. This will enable the active implementation and development of solutions for promoting flight demand and inbound tourism and attracting investments," Mr Bartkus said.

He added that the scene for the inter-institutional agreement had been set by good preparation and actually working models of promoting regular flights. The joined effort proves that Lithuania has an inter-institutional understanding and consensus on the need to invest in the promotion of priority destinations.

The active engagement with partners will be aimed at demonstrating that Lithuania can effectively pursue the development of sustainable flights while managing its key business risks.