Thursday, May 21 2015 14:39

The number of operating air carriers in Armenia has decreased from 35 to 27 since the launch of the "open skies" policy at the end of 2013. A source, who wished to remain anonymous and who is close to the aviation circles of the country, has told ArmInfo journalist the "open skies" policy has been failed. It is quite likely that the number of airlines to operate in Armenia will keep decreasing.  

Etihad Airlines, that provides quite an affordable and comfortable air hub at Abu Dhabi Airport, has recently announced about the suspension of its participation in Armenia's "open skies". The company's main focus was on Armenian passengers flying to the USA.  According to the source, the company failed competing with the main rivals - Aeroflot, Transavia and S7, which provide more advantageous terms. For the same reason famous airlines such as "Czech Airlines" and "Al Italia" suspended flights to Armenia last year. Polish LOT is quite likely to join the aforementioned airlines.   

According to the source, the 20% growth of passenger flow in 2014 inspired hope that airlines would stop suspending their activities in Armenia. However, there has been serious reduction in this industry since the beginning of this year. Despite the growing number of passengers (more than 2 mln people) the situation has not improved.  According to the expert, the aggressive policy of Russian airlines is quite coherent - prices in airmarket decrease due to that very policy. 50% of flights from "Zvartnots" airport land in the Russian capital. Moscow airports are becoming the main air hub for Armenian passengers. "Aeroflot"'s savvy pricing policy has tempted Armenian airflow away.      

The expert believes it noteworthy, that the International Monetary Fund and World Bank have forced the "open skies" policy to Armenia with former U.S. Ambassador to Armenia John Heffern as the policy's strident apologist. The source did not exclude that American diplomats had been espousing the issue aiming to prevent a widely diversified system of air traffic in Armenia. The complete absence of governmental action (ceded to Ministry of Economy in 2013) has worked in Russian airlines' favour, too - such conditions have provided them with a natural carte blanche.     

According to the expert, the "open skies" policy aimed at preventing the emergence of well-operating national airlines in the market. In 2000s Armavia was the best attempt, however, the controlling block of shares of the company was later issued to Russian "Sibir" airlines, which was trying to establish its huge passenger hub in Armenia for flight to Middle Eastern countries and further. After the "exile" of "Sibir" and Armavia's bankruptcy the "open skies" policy was the obstacle for "Air Armenia"' s effective work.  The company fell victim to black PR and complete ignorance from its own government. 

According to the source, the policy of "open skies" is impossible without a government that regulates its own interests. Georgia is a good example in this case - the country manages this policy quite well, at the same time keeping up the interests of the national airlines. Georgia maintains the needed diversification level of market players - this is an issue of national security. The source believes that once the airmarket is occupied, passengers will have to pay the same high prices.  
To remind, 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 effect of the new policy appeared to be short-term. Nowadays there are as many airlines in Armenia as there were before the launch of the "open skies" policy.