Current approach of Business under Covid-19, short and long-term perspective
Dr. Constantin von ALVENSLEBEN
President of FIAA/ CEO OF Tirana International Airport (TIA)
Starting around 12th of March, GoA stopped the regular passenger flight activity. First all flights from and to Italy were banned, then consecutively all other passenger flights except for the connection between Tirana and Istanbul. End of March, this service also stopped. Since then, TIA continues to service several cargo flights per day as well as humanitarian and repatriation flights. There are one or two repatriation flights daily, connecting TIA with European capitals. The provider is mostly Air Albania but sometimes also Albawings. A flight from an Albanian national to the EU requires confirmation from the respective Embassy of the destination country, and the destination country may require the passenger to undergo quarantine after arriving in the destination country.
While TIA had up to 64 turnarounds per day in the most busy periods, the airport is now reduced to two or three. Revenues since the second half of March are heavily impacted as a consequence, while the airport continues to bear high fixed costs. No dismissals have been made yet, but a short work scheme was introduced which guarantees to employees at least 50% of their salaries. Management has agreed to a salary reduction, and a Voluntary Donation Scheme was set up ensuring additional support to the employees with the lowest salaries.
Even in the absence of normal revenues since mid of March, TIA continues its capital expenditure program focusing on work on the airfield renewing and upgrading the taxiway infrastructure. Further investment in refurbishing the runway will depend on air traffic and revenues coming back in the second half of the year.
In the meantime, TIA is also preparing for the restart of air traffic under the still existing COVID-19 situation. Special measures will have to be adopted, such as the keeping of distance while queuing, plexiglass shields in front of counters, the taking of temperature etc. The full range of measures affecting airport and airline operators has not been finally agreed by GoA and the governments of the EU. In addition, the date of the restart of air traffic depends on political decisions of GoA and the EU countries.
TIA looks forward to see you all back at the airport as passengers as soon as possible!
Mr. Xingyun Sun talks over the business situation under COVID-19 pandemic
CEO of Bankers Petroleum Albania & Board Member of FIAA
“We are hopeful that we will come stronger from this difficult period as we see that even the government is showing support for big investors, such as Bankers”!
The outbreak of Covid-19 virus which has been declared a pandemic by the `World Health Organization is an immense global crisis which has affected us all. The rapid spread of this virus has led to a deteriorating economic outlook, low oil prices and upheaval in financial markets worldwide.
The price of oil sunk to levels not seen since 2002 as demand for crude collapses amid the coronavirus pandemic. Brent crude fell up to $20 a barrel, the lowest level since November 2002. Oil prices fell by more than half during the past months as companies cut back or close production.
On the other side refineries decided to reduce production. The decision came as refineries around the world are processing less crude oil. As countries bring in tougher measures to fight the coronavirus outbreak, demand for transport has been hammered by grounded airlines and fewer cars on the roads. Therefore, the request for crude oil has declined affecting negatively Bankers, which depends on the market demand and the oil price as well.
During March, Bankers was informed by our main crude buyer of a Force Majeure event due to the enforcement by the Government of Spain of a state of Emergency throughout the country. These events put Bankers in a very difficult situation, in selling the product and more important storage it.
Bankers Petroleum Albania during all the months of April, March and ongoing is trying its best to mitigate the impact Covid-19 and maintain the production activities as at maximum as possible. We received additional storage at our export terminal in Vlore (PIA) and made use of all available inventories in the Patos-Marinza oilfield. But, even with these mitigation efforts, we were forced to first reduce production and then shut-in the oilfield.
Even in this situation we kept every employee at work and assured them that we will keep strong together even in this difficult period.
As the oil prices are improving (currently Brent price is around 31 USD/bbl), we are slowly getting the oilfield back to work. All this period, we have tried to find new buyers, which will allow us to reduce storages and restart production. We have begun to sell small quantities and we are working to add the sales and the production in the next weeks.
Our team of engineers, which I must say is very competent, is working hard to get back to work the oilfield at minimum costs. These months have been really difficult and it’s really painful to see such big and important oilfield to “get to sleep”… But, I can say that it has worked as a period of studying in deep this important asset, the way and technologies to exploit it better as in common working days it’s difficult to find time to analyze every detail.
As for the long-term perspective, I can say that if the oil prices will improve, this will allow the company to increase its production and the revenues, pay more taxes to the government of Albania.
We are hopeful that we will come stronger from this difficult period, as we see that even the government is showing support for big investors, such as Bankers, which represents over 90% of the overall oil production in Albania, paid over 54 Million USD in taxes only last year, and employees around 2000 people (530 direct/1470 indirect).
Mr. Elvin GURI
Investor at Telekom Albania & Board Member of FIAA
Our focus at Telekom Albania during the lock-down, has been servicing as best as we can our customers. As our stores were physically closed for a substantial amount of time, we focused on alternative channels of maintaining communication with our customers through internet, social media, telesales etc. This was a good time for us to show real commitment to our customers even in these unusual times.
While the whole industry extended more favorable terms and bigger data packages to the customers during the lockdown, we also had to take a closer look at ourselves. This crisis forced us to consider the fundamentals of both our current structure and the way we operate. Physical offices were transformed and adapted to new operating reality to meet our customers ‘demand more efficiently.
I believe that living in these challenging times, Organizations shall become more flexible in order to better face similar challenges in the future. Faster acceptance of digitalization, including virtual offices, internet and social media-based customer service etc, would differentiate the industry competitors. More investment in infrastructure network, software etc, combined with better service and better products, should serve to increase customer loyalty. Finally, size and focus shall be key to survival and success in business.
Mrs. Stela DHAMI, MBA, LEED® GA
Managing Partner of Colliers International
As all of FIAA’s member firms, Colliers was also impacted by the COVID-19 pandemic. Our ways of working have primarily changed, but the level of commitment to our clients increased as to respond best to their real estate commercial and advisory needs especially during difficult times.
The main impact in the real estate sector was the closure of all retail/shopping centers, which put a lot of financial burden and pressure to owners and tenants. Most tenants tried implementing force majeure clauses in their rental agreements. Few landlords responded positively, which put most of the pressure of the crisis directly on the tenants. Those tenants that implemented new multi-channel approaches to their customers by enabling online retail sales were able to gain some business, otherwise they were directly negatively impacted.
In the office sector, companies were less fortunate in receiving rental deductions as most office buildings were open for business albeit the increased safety and hygiene measures. However, even here international and local tenants tried receiving rental deductions which were offered on an one off basis. Those landlords who offered such deductions strengthened the relationships they had with their tenants.
In the hospitality sector, I am happy to observe that the international hotel brands remain interested in expanding their presence to Albania, but remain skeptical of the delay in infrastructure investments in the country. As soon as the country can facilitate better air and road traffic links to the South of Albania the higher the chances of attracting international hotel chains to this part of the Albanian Riviera.
Mr. Përparim KALO
Managing Partner at KALO & ASSOCIATES & Board Member of FIAA
KALO & ASSOCIATES continued its activity based on the new regulations of doing business under the COVID 19 circumstances issued by the Government of Albania.
We organized the work from home for 90 per cent of the staff, whereas 10 per cent of the staff practiced from the offices, following the rules such as distance, hygiene, and timing.
Although, the activity was reduced and at least 5 mega projects, we were working on were suspended, we decided to keep the office intact from human resources and payment obligations.
Now, we believe that the way the work was organized during the last 2 months will very likely continue for inertia, so it is important to strengthen the IT solutions and also literacy of people in the firm.
We believe the situation will be normalized when communication between continents and especially between the EU countries and EU with Western Balkans are relaxed.
Mr. Rohan D’Souza
Chairman of Shell Industries Albania & Board Member of FIAA
“Shell in Albania adjusted rapidly to the lockdown, because of the spread of Coronavirus. Overnight, our entire workforce began working from home. Like other businesses at the beginning we had to work through a range of challenges (like IT infrastructure & people’s physical working conditions). But our thoughts and prayers remain with the people who are both physically and economically affected by this pandemic and we will play our part in bringing Albania back to normal.”