ArmInfo. Criminal competition prevails on airline market in Armenia, Chairman and founder of "Armenia" Airline Company Tamaz Gaiashvili stated at the press conference today.
"We are not afraid of competition, if it is fair, however quite other conditions prevail in this country. Setting prices lower than the prime cost is nothing else than dumping", Gaiashvili emphasized referring to the tariffs set by "Pobeda" low cost airline company and recalled that it is subsidiary of Aeroflot. According to him the Russian company intends to neutralize all the competitors and remain the main player on the Armenian market so that it will able to dictate its conditions. "I assure that no one is going to carry out flights for free, this is a temporary measure to drive out all the competitors, after that the prices will be set at least $200 for any direction", he stated.
Director General of the Company Robert Hovhannisyan for his part explained why the prices of the airline company are non competitive on the airline market. "For the Russian carrier Yerevan-Moscow-Yerevan flight costs $10-12 or even $15 thousand cheaper than for any Armenian airline carrier, as a result we had to cancel all the planned flights to Russian cities of Moscow, Saint Petersburg, Sochi, Rostov, etc", he said.
Hovhannisyan noted that service prices for Armenian and Russian companies are different. "If the Russian carrier pays $200 for 1 ton of fuel, we pay $600, while at least 15 tons are needed for a flight. We spend $3 thousand for navigation, while the Russian company pays only $200, their airport service price is $500 while our airport service costs are $7000", he explained.
The company intends to meet members of the new government in the nearest future to discuss all the issues. "We continue to work, carrying out regular and charter flights, however not everything depends on us. There are issues, which can be solved only with the help of the government. The state should protect the interests of its companies and exert efforts to stop the current chaos", Gaiashvili noted.
Despite difficulties of working in "Open Sky" regime the company managed to transport nearly 800 thousand citizens on regular and charter flights in one year, the Director of the Company informed. Next year the company plans to carry out flights to Brussels, Barcelona, transit flight to Spain and possibly Portugal.
In a talk to ArmInfo's correspondent Hovhannisyan noted that the company intends to increase passenger turnover by 150% in one year, which may be achieved due to recent successful agreement on carrying out flights to Beirut and a number of Iranian cities (Tehran, Shiraz, Rasht etc.). "We have discovered this market and we hope that these directions will be profitable and will serve as financing source for the flights we intend to carry out to a number of European countries", he summarized.
To note, "Armenia" airline company entered the market in 2016. The founders of the "Armenia" air carrier are Ashot Torosyan (51% stake), Tamaz Gaiashvili (25%) and Robert Hovhannisyan (24%). According to the Director of the company as of today 53 specialists of civil aviation work in the company and 4 young pilots are being trained. Recently "Armenia" received license to carry out flights to European countries directly or via transit over third countries.
To recall, the national air carrier of Armenia - Armavia - suspended its flights on 1 April 2013 and launched the bankruptcy procedure. In 2014 the same happened to Air Armenia. On October 23, 2013, the Armenian government approved the programme implying provision of competitive and long-term air transportation services in the country. The program is based on a joint study of McKinsey & Company and National Competitiveness Foundation of Armenia. The "open sky" policy that was announced in the country in 2013 sparked a large-scale exodus of foreign companies from the Armenian market. Consequently, due to the high prices of air tickets, many Armenian passengers prefer to make use of the services of neighboring Georgia, where there are several low- cost European companies.
