Yerevan Airport counting on liberalization of air travel

Zvartnots Airport's new terminal (Photo by CJSC Armenia - International Airports)

In 2014, Zvartnots International Airport in Armenia’s capital Yerevan served its 2 millionth passenger of the year for the first time ever. This year, however, the airport’s passenger traffic growth slowed down dramatically against the background of the continuing Open Skies project.

Zvartnots Airport’s traffic had nearly doubled over the past decade, from 1.11 million passengers in 2005 to 2.05 million in late 2014. There were three cyclical traffic declines during that period at Armenia’s prime air gateway: in 2009 (-10.0%), in 2011 (-0.7%), and in 2013 (-0. 01%). In 2007, 2010, and 2014, on the other hand, traffic growth rebounded sharply at 21-23%.

By 2020, Yerevan airport is planning to have passed its next milestone of 3 million passengers served annually. “Our infrastructure is completely ready for this,” says Gevorg Abramyan, a spokesman for the Zvartnots managing company CJSC Armenia – International Airports. In 2002, the Armenian government granted the company a concession of the state-controlled airport for 30 years. Zvartnots’ private operator is controlled by Eduardo Eurnekian, an Argentinean businessman of Armenian descent, whose business structures participate in dozens of airports, mainly in Latin America.

Step forward

Commissioning a new modern passenger terminal at Zvartnots became the new managerial team’s crowning achievement. With an annual design throughput capacity of 3.5 million passengers, the terminal sits on the left-hand side of the original circular terminal, which is currently inactive.

With its new terminal and a completely renovated airfield, including the 3,850 meter-long runway, Zvartnots has enough capacity for the time being. “After our passenger traffic has exceeded 3 million people, we will proceed to expand the airport hub,” Abrahamyan says. “As a matter of fact, our airport’s potential exceeds current demand.”

Open Skies

Armenia began liberalizing its airspace in late 2013. At the time, Sergey Avetisyan, the country’s deputy economics minister, said in an interview to Russian Aviation Insider’s sister publication Air Transport Observer that 23 airlines had been flying regularly to Zvartnots as of early November 2013. When the Open Skies project started, the government expected that 40 to 50 domestic and foreign carriers would be operating in the country by 2016.

However, not everything is that simple with airline presence at Zvartnots: Air Armenia, which came to the airport after the 2013 bankruptcy of Armavia, itself ceased operations last fall. Air Armenia CEO Arsen Avetisyan did not hesitate to call the Open Skies policy a “meat grinder”, citing it as the main reason why the airline had folded.

The Zvartnots management, for its part, praises Open Skies for the sharp growth in passenger numbers. Yet, based on recent data supplied by Armenia’s General Department of Civil Aviation, Zvartnots saw its traffic drop 9% year-on-year in the first nine months of 2015, to 1.589 million passengers; the number of aircraft movements decreased by 17% over the same period.

A source close to the Armenian transport market explains the situation at Zvartnots by the fact that the Open Skies policy has failed to help major international airlines compete successfully with Russian carriers in Armenia: “For example, Etihad Airways, which has left Yerevan recently, was offering convenient connection flights to the USA via Abu Dhabi, but eventually lost out to Aeroflot with its Moscow connection.”

The Russian airlines operating on the Armenian market carried 1.3 million passengers between the two countries on scheduled flights in 2014, up 12% year-on-year. This elevated Armenia from eighth to fourth place on the list of the most popular air travel destinations for passengers flying from Russia, after Germany, Italy, and China. Passengers traveling from Yerevan to other countries via Moscow accounted for a significant share of this traffic.

Avetisyan says that Poland’s LOT and Czech Airlines will resume flights to Zvartnots in early 2016. Also, according to local operators, Zvartnots may be able to “steal” some traffic from Tbilisi’s Shota Rustaveli Airport, located just 175 km to the north.

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