“Liberalization” of Armenian sky

David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza

After the bankruptcy of the national air company Armavia on April 1st, the Armenian government finally decided to liberalize the sphere of air transport. This is said in the concept of development of air transport which was adopted by the government on June 6th. From now on there will be at least three national air companies in Armenia. Unlike Armavia which used to be the only air company of the country for 10 years, the new air companies won’t have benefits and privileges. Considering the fact that all air companies should be registered in Armenia, the government believes that it will help to establish a competitive environment. At the moment, the Armenian transport system uses Russian Aeroflot, S7, and Transaero, as well as Austrian Airlines, KLM, Fly Dubai, and other foreign companies.

At the same time, 10 airlines are registered in Armenia: Atlantis European Airways, South Airlines, «Ayk Avia», «Air Armenia», Reliable Unique Services Aviation, «Taron-Avia», Ark Airways, «Veteran-Avia», Skiva Air, and Skynet Airlines. In September the Chief Department of Civil Aviation of Armenia will announce a contest for three Armenian airlines in three air directions – to Europe, the CIS, and the Middle East. The main demands of the tender are the technical conditions of planes, booking systems, safety of flights, and financial stability of airlines. The tender had to take place in July, but the terms were shifted “due to detailing its conditions.”

After the bankruptcy of Armavia, which belonged to businessman Mikhail Bagdasarov, it seems that the authorities’ desire to liberalize the air sphere should be commended. 10 years of Armavia’s monopoly at the air transport market demonstrated ineffectiveness of such a system. However, the intention to liberalize this sphere could be more convincing, if the authorities gave equal opportunities for participation in the tender to major foreign airlines which worked in the Armenian market. Obviously the announced tender is another cover for establishing a new monopoly instead of bankrupted Armavia. Only one Armenian airline – Air Armenia – applied for participation in the tender. It has already got a non-permanent license on flying to Russian cities – Moscow, Sochi, Samara, Rostov-on-Don, Krasnodar, and St. Petersburg till the mid of September. It is thought that two Airbuses-320 will work on the destinations.

Doubts over Air Armenia are confirmed by its owners. The founders of the company are Vaan Arutyunyan and Ruzanna Tovmasyan. Arutyunyan used to state official positions for many years; he is also the brother of the chairman of the parliamentary committee on state and legal affairs, the former minister of justice, the member of the ruling Republican Party of Armenia, David Arutyunyan. Apparently, we cannot speak about free competition in this context.

Air Armenia is an airline with 10-year experience of cargo transportation, carrying cargos to the CIS, European, the Middle East, Asian, and African countries. The airline has 8 aircrafts: AN12, AN24, AN26, YaK40, TU134, TU154, IL76, and IL86. About 38% of the company’s cargos are transported through Yerevan, and Air Armenia plans to use the same scheme for passenger air travel.

Considering the absence of competitors amongst the other 9 formally existing Armenian airlines, even today we can say that Air Armenia will actually be the first Armenian airline, after Armavia’s flights have been stopped. For the same reason Air Armenia will be the only participant of the tender. The airline plans to get 6 aircrafts by 2014, it confirms that the new monopolist belongs to serious wealthy people. The new monopoly will quickly solve all problems of oligarchy which bear losses after Armavia’s bankruptcy.