Flight Ban as Georgia’s Key Challenge in 2019; Putin’s Expectations Failed
Russian flight ban generated serious challenges for Georgian aviation in 2019. Sanctions set by Russian President Vladimir Putin came into force on July 8 to create economic problems to Georgia.
As a result, direct air flights between Russia and Georgia ceased and air business essentially damaged. Both Russian and Georgian airlines complain about losses. Let Russian airlines blame Putin for their losses, but financial conditions of Georgian airlines also worsened.
The Georgian Authorities also joined the common breast-beatings in Georgia and made very pessimistic forecasts. They even announced plans for subsidizing the aviation sector, however, these plans were not or could not be implemented and this is related to the replacement of Prime Minister, directly or indirectly. Passenger turnover at airports essentially declined after suspension of direct flights and tourism business also lost tourists. However, this year the country managed not to worsen the 2018 indicators anyway. In May 2019, Levan Karanadze, head of LEPL Civil Aviation Agency of Ministry of Economy forecast about 6 million passengers. Indeed, Karanadze could not forecast the Russian embargo in May, however, passenger turnover at Georgian airports genuinely exceeded 6 million persons.
In 2018, Georgian airports handled 5 033 323 passengers. In January-November 2019, the figure made up 4 877 963 passengers, up 4% compared to January-November 2018, while the growth forecast for the mentioned period constituted 16%. Moreover, the Civil Aviation Agency expects the passenger turnover to grow by 2-3% at the end of 2019. Both Government and business sectors have realized that the country has quite good indicators despite the Russian embargo. “According to these indicators, despite the current challenges, passenger turnover at Georgian airports will not be lower compared to 2018”, Minister of Economy Natia Turnava noted in early December.
Russia-announced flight ban has affected GEL exchange rate too, the president of the National Bank of Georgia (NBG) noted and added that the tourism sector lost 300 million GEL revenues because of Russian flight ban.
“We know that in July Russian flight ban and information on other available official or unofficial trade sanctions generated expectations for GEL exchange rate depreciation. Consequently, prior to actual slowdown in currency inflows, foreign currency supply to the market shrank and the demand increased. As a result, the national currency exchange rate immediately plunged, much earlier than tourism sector revenues started declining. The situation was aggravated by political tensions that became additional ground for the exchange rate devaluation”, Koba Gvenetadze pointed out.
Over the past period, Hungarian low-cost airline Wizz Air ranks first in terms of passenger turnover at Georgian airports. This airline appraises Georgia as a prospective air market and plans to add new flights from Europe to Georgia.
As for another key event in the aviation sector, Irish low-cost airline Ryanair entered the Georgian market and launched operation in Tbilisi and Kutaisi airports. Ryanair launched flights to Georgia at the end of 2019. If the airline had appeared earlier, the passenger turnover would be higher.
“Over the past 3 years, about 25 low-cost airlines entered Georgian market and brought new opportunities, increased tourist inflows. At the same time, this is an additional headache for aviators, because the demand for satisfying international standards on land and in the skies grows”, Georgia’s chief economist noted.
In 2019, announcements were made that a very important project would be implemented to develop internal flights. As a result, new capabilities will open in the tourism and aviation sectors. The project was prepared in 2019 and the document will be submitted to the Government for analysis in 2020. Helidromes will be arranged in the country to develop internal flights. More than 300 locations have been selected for arranging helicopter dromes and best ones of them will be chosen to start the infrastructure construction works. At this stage, it is unclear whether the Government will arrange helidromes itself or announce interest expression.
To improve flight safety and quality of supervision, two new regulations were introduced in 2019, based on the EU requirements. Objective of the regulation on Aviation Medical Center, Aviation Medical Expert and Medical Certification of Aviation Specialist is to determine and control the health condition of aviation specialists based on European standards. Under the mentioned regulations, the Agency issued first certificates of an aviation medical expert in 2019. The next year the Agency will certify the aviation medical center.
On April 1, 2020, the Regulation on Certification of Air Navigation Service Provider will come into force. The regulation calls for certification of a provider of integrated and nonintegrated air navigation services in Georgian air space and civil airdromes in compliance with European standards. Based on the regulation’s requirements, the Agency will certify SakAeroNavigatsia in 2020 and this will upgrade air navigation services and quality of supervision;
Furthermore, to improve the supervision process over Georgian airlines, the Agency has tightened requirements for leasing airplanes through wet leasing to airlines registered in other countries. Moreover, Georgian airlines were restricted to employ the airplanes operated by foreign airlines with questionable aviation security norms (airlines included in the EU Black List). Furthermore, the agency has tightened conditions for recognizing aviation specialist diplomas issued by other countries and the certification requirements were harmonized with European standards.
On January 1, 2019 the regulation on use of aviation radio communication and standard phraseology came into force with the aim to improve flight safety and minimize misunderstanding during radio communication in the Georgian skies;
In 2019, for the first time, an aviation kerosene refueling enterprise was registered in the tourism zone. In the village of Achkhoti, Kazbegi municipality, fuel services are provided for small aircrafts based on firefighting international standards. This service essentially grows flexibility of operators.
The Civil Aviation Agency has taken important steps for regulation of the so-called light aviation and improving the legislation. It has approved rules for certification of ultralight aircrafts exploitation and navigation exploitation with the aim to ensure security of flying ultralight aircrafts in the skies of Georgia and to protect passenger rights through determining requirements for mandatory insurance of operators. The agency has determined standards for the ultralight aircraft crew (Regulation for Certification of Flying Crew of Ultralight Aircrafts”) to ensure security of flights; amendments were adopted to Georgian regulations on performing flights in the skies of Georgia to improve the flights of paraplanes. Operating requirements and restrictions were determined;
The year of 2019 was an exceptional period for strengthening Georgia’s reputation in aviation field and deepening international cooperation. The Civil Aviation Agency obtained special certificates of the ICAO board’s president for having carried out important reforms in terms of flights security and aviation safety supervision and high achievements.
The Civil Aviation Agency signed new agreements with the European Union’s Aviation Safety Agency (EASA) and European Organization for Safety of Air Navigation (EUROCONTROL). Cooperation memorandums were signed with the Single European Sky ATM Research (SESAR), International Air Transport Association (IATA), Federal Supervisory Authority of Air Navigation Services of Germany (BAF), aviation authorities of Ukraine and Armenia. We will continue active work in the future, as well.
For the first time, a representative of Georgia was elected as a Vice President of ICAO Assembly and EUROCONTROL managing board. The Civil Aviation Agency director was also elected as deputy chairman for Meetings of Directors of Regional Aviation Authorities of ICAO and European Group for Planning of Aviation Systems.