New Armenian Airline Announces Entry Into Market
A new local airline promising some low cost flight options has announced its imminent entry into Armenia’s civil aviation market. The bid by the company called “Armenia” comes less than two years after another local airline stopped operating passenger flights citing unfair competition as the main reason.
Since the early 2000s for about a decade Armavia was considered Armenia’s national air carrier, but the airline owned by wealthy businessman Mikhail Bagdasarov eventually contracted debts and declared bankruptcy in 2013.
Air Armenia, a private carrier thereto engaged only in cargo transportation, attempted to replace Armavia as Armenia’s passenger airline amid the Open Skies policy announced by the Armenian government. The airline, however, soon began to experience difficulties, accusing a Russian air navigation agency of creating unequal conditions for it in its competition with Russian airlines for destinations. The situation led to Air Armenia’s suspending its flights in late 2014.
Now another airline where a majority stake is held by a local businessman is making a bid to regain some of the passenger traffic in the country’s civil aviation market. Among the stakeholders of the “Armenia” airline there are also people who have experience of civil aviation management in Georgia.
Tamaz Gaiashvili, who has a 24-percent stake in the company, is director of Georgian Airways. His deputy Robert Oganesian owns 25 percent of the newly established airline.
The owners of “Armenia” say they plan to launch flights already in April. Destinations will include Moscow and other large Russian cities as well as Kyiv, Minsk, Tehran, Dubai, Barcelona, Prague and a number of other European cities.
By the end of the year the company expects to have up to eight passenger jets in its fleet. The new airline’s owners also promise affordable ticket prices, starting at around 100 euros (about $108) in one direction.
“We are going to become competitors not only for Russian airlines. Of course, aviation is a difficult business, and without government support one can hardly have a serious airline in Armenia,” Gaiashvili said at a press conference in Yerevan on Wednesday.
Aviation expert Shahen Petrosian, however, does not consider realistic the prospect of having two-way flights from Armenia to a European city for just 200 euros.
“It is possible that they can sell a certain number of tickets at discount prices, but the bulk of the tickets will still be priced as usual. I can’t imagine how they can do that under the current fuel prices in Armenia, where fuel supply remains monopolized,” he said.
Petrosian doubts that so-called lowcoasters will be a real prospect in Armenia until airport taxes in Yerevan go down and monopoly on fuel sales is eliminated. “Georgia has no oil of its own either. But there air tickets are twice as less expensive as in Armenia,” he said.
The majority stakeholder in the newly created “Armenia” airline is Ashot Torosian, a hitherto unknown businessman who introduced himself to media as a former dentist. He refused to be drawn on how he managed to become a majority stakeholder in an airline. Some Armenian media, meanwhile, have speculated that in reality the new company may belong to Prime Minister Hovik Abrahamian’s extended family. Abrahamian’s press service, however, has denied the speculations. Gaiashvili also denied there are any Armenian officials among the founders of the “Armenia” airline.