LOT Polish Airlines Chosen To Continue Vilnius Service

On September 25th, Lithuanian Airports announced that an agreement was made with LOT Polish Airports involving service to London City Airport. The deal involved the two parties, as well as Lithuania’s Ministry of Transport and Communications, and will see the Polish carrier connect Vilnius and London City with regular, well-timed E190 flights. The announcement concludes a government-driven process that sought bids from airlines to provide this critical business link. LOT had been operating the route since May 2019, but its contract as a public service obligation was only valid until September 30th, 2023.

Same airline, same route, but new business model

An “investment agreement” has been signed between Lithuanian Airports and LOT Polish Airlines to provide direct, regular flights between Vilnius and London City. As noted by the former, the contract will be implemented under what it calls a “new route development model.”

Photo: GCMap.com

Simonas Bartkus, CEO of Lithuanian Airports, notes that this is not a public service obligation in the normal sense – where a subsidy or grant is provided to the airline to operate the route. Indeed, Lithuanian Airports were forced to re-examine the route and its financial support as a public service obligation. Brexit meant that funding for flights could no longer continue in the same way.

This “route development model” is based on a long-term partnership between Lithuanian Airports and the airlines operating the flights. Both sides bear the financial risks associated with the operation of the flight and will, in turn, share the financial benefits generated by the flight.

LOT “wins,” but competition unknown

At the end of May 2023, when the bidding process was announced, we examined other possible airlines that could pick up where LOT left off.

The most significant technical hurdles were range and aircraft size, with London City not accepting anything larger than an A318 (which had to be specially modified anyway). This ruled out the Airbus A220-300, the only aircraft type operated by Latvia’s airBaltic. British Airways and its CityFlyer E190s could have worked well, particularly as London City is already a home base. Additionally, SWISS and their Airbus A220-100s or Helvetic Airways and their E190s may have also worked, especially as these airlines already operate service to Vilnius from Zurich.

Photo: Frans Zwart | Wikimedia

Besides the technical limitations and requirements, Lithuanian Airports noted that the selection criteria included the requirement that the route be operated at times and frequencies convenient for business travelers. Additionally, profitability would have been a major determining factor for airports.

So, while it’s less exciting to see more of the same, incumbent airline LOT Polish Airlines will continue serving the route. Based on data from FlightRadar24.com, this appears to currently be a five-times weekly service operating as flights LO273 and LO274.

“This route is a prestigious project and a very strategic one in the context of the existing regular flights. From October onwards, the flight will continue to operate from Vilnius at very convenient time, which we believe will also contribute to its growing popularity. It is very important to understand that the country’s investment in the development of priority flights is necessary, therefore, together with our partners, we will make every effort to ensure that the state budget will provide the necessary amount for the effective continuation of the development of the flights in the coming years as well,” -Simonas Bartkus, CEO, Lithuanian Airports

What do you think of a risk and profit-sharing model for route developments, particularly for smaller capital cities and economic centers that may be overlooked by airlines? Share your thoughts by leaving a comment!

Sources: FlightRadar24.com