Tuesday, December 3 2019 12:42
Alexandr Avanesov

The application of amendments to the law "On state duties" will lead  to an increase in passenger traffic by 200 thousand people

The application of amendments to the law "On state duties" will lead  to an increase in passenger traffic by 200 thousand people

ArmInfo.According to preliminary data, the application of amendments to the law "On State Duty" will lead to an increase in passenger traffic. On December 3,  presenting the draft law in the first reading in the country's  parliament, the chairman of the Civil Aviation Committee of the  Republic of Armenia Tatevik Revazyan stated.

According to her, it is planned that in annual terms the passenger  flow will increase by 200 thousand people. Given that both airports  Armenia - Yerevan "Zvartnots" and Gyumri "Shirak" - annually serve  3.9 million people, an increase in passenger traffic by 200 thousand  people seems to be a very tangible figure.  In addition to the growth  in passenger traffic, the application of privileges will create  thousands of new jobs, increase tax revenues, develop infrastructure,  and improve the investment environment.  The Chairperson of the  Committee said that tax incentives relate to the abolition of the  so-called air tax (10 thousand drams for each ticket - Ed.) for new  routes. The benefits will be provided to the airline for a period of  three years with the right to prolong it for another two years if it  begins to operate flights along the new route. If another airline  appears on the market that declares its intention to operate flights  in the same direction, the period of privilege from 3 years will be  reduced to 2.5 years. Thus, Tatevik Revazyan continued, the  government sets itself the task of attracting new air carriers to the  Armenian market that will operate flights on new routes. At the same  time, the volume of budgetary deductions will not only not decrease,  but also increase due to an increase in the frequency of flights. In  addition, the application of tax incentives will improve the  competitive environment and reduce the possibility of the emergence  of termination risks, which are estimated at less than 5%.

As previously noted by the Minister of Territorial Administration and  Infrastructures Suren Papikyan, today the revenues from the "air tax"  to the state budget are annually about 11-12 billion drams. However,  there is reason to believe that the provision of benefits for this  type of tax will have a positive effect, especially given that this  will facilitate the opening of new areas and stimulate existing ones.  In addition, due to the multiplier effect, the state budget will  receive additional revenues. According to the minister, the draft law  applies to all airlines that will begin implementing flights to new  destinations in which no flights have been flown from Armenia over  the past 12 months. "This will create a competitive atmosphere,"  Suren Papikyan pointed out.

In turn, Prime Minister Nikol Pashinyan emphasized that on the basis  of meetings held in the government, a political decision was made to  eliminate the "air tax" for new directions. "As a result, we already  have one company that showed interest and announced its intention to  start flights to Yerevan and Gyumri. It's about RyanAir. This was  followed by criticism that one company is granted privileges.  However, the privilege is not related to a specific airline - we are  ready to distribute it to all companies that wish to enter the  Armenian market, which will have a significant impact on the pricing  policy in the sphere and economic development in the country, "the  head of the Armenian government noted.  Note that, as expected, the  vote in the country's parliament on the submitted document will be  held on December 4. 

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Yield at cut-off price

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Maximum yield

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