AMBITIOUS PLANS FOR RIGA AIRPORT; AMERICAN INVESTMENT

UNCLAS RIGA 000649

SIPDIS

SIPDIS

STATE FOR EB/CBA

STOCKHOLM FOR FCS

E.O. 12958: N/A
TAGS: EAIR BTIO ECON LG
SUBJECT: AMBITIOUS PLANS FOR RIGA AIRPORT; AMERICAN INVESTMENT
DESIRED



1. Summary: Riga airport has an ambitious plan to expand to handle
as many as 15 million passengers a year by 2020. The head of Riga
airport is seriously interested in having American firms bid on many
of the projects related to the airport's expansion. There are also
plans to increase the number of direct flights to the US, primarily
through New York. While the plans are grandiose and may not be
fully realized, we believe that there are a number of opportunities
for American businesses in the project. End Summary.


2. Pol/econ chief was recently briefed by Krisjanis Peters, head of
the Riga International Airport, on the airport's newly adopted
expansion plans. Riga expects to handle 3 million passengers this
year on the 50 direct routes that operate from Riga. Currently, the
two largest carriers are AirBaltic (jointly owned by the GOL and
Scandinavian Airlines) and Ryan Air.


3. The first phase of expansion is already under way and will
include a new, expanded check-in area, expansion of the runway from
2.3 km to 3.2 km, and addition of new long haul routes -- including
AirBaltic flights to New York and Beijing, and charter flights to
Bangkok in winter.


4. By 2012, Peters said, the airport expects to be able to handle 10
million passengers a year with a significantly reconfigured gate and
taxiway system, new air traffic control facilities, and development
of a business park and hotels on the airport premises. There is
also the possibility of a convention center, although Peters said
that was being considered separately from the main development
plans. Peters also outlined plans to have a railway station to
carry passengers to Riga or the seaside resort of Jurmala. The
airport was also discussing with the city of Riga the possibility of
a light rail or monorail system from the airport to the city center.
By 2020 Peters believes the airport will be able to accommodate 15
million passengers a year and will have a second runway.


5. Peters stressed repeatedly in the briefing that he would very
much welcome American investment in the airport's development. He
identified construction, hotel management, and the possible
convention center as particular areas of interest. He also noted
that the airport would be commissioning a new master plan and would
like to see American companies bid on the tender when it goes out in
the fall.


6. Comment: This is a very extravagant plan for Riga's airport --
mainly the work of transport minister Ainars Slesers. Nevertheless,
we believe that there are opportunities for growth as more people
discover Riga and Latvia as tourist and business destinations. With
AirBaltic and RyanAir providing low cost flights to and through
Riga, passenger traffic through the airport is growing at roughly 30
- 40 percent per annum. . We believe Peters is sincere in his
desire for American businesses to bid on projects. Planning, hotel
management, and architectural design are probably the areas of
greatest likelihood of success for US-based firms.

SELDOWITZ