Jul 21, 2013

U.S. Firm Contracted To Assist In Armenian Aviation Reform

The Armenian government has hired a U.S. consulting company to offer advice on its plans to open up Armenia’s aviation sector to more domestic and foreign airlines.

The government’s National Competitiveness Foundation signed a corresponding agreement with McKinsey & Company in Yerevan on Thursday. Under the agreement, McKinsey will assist in the planned “gradual liberalization” of the sector that was announced by the government last month following the bankruptcy of the Armavia national airline.

The private carrier ran up massive debts to airports, fuel suppliers and other service providers despite having enjoyed exclusive rights to international flights to and from Armenia for almost a decade.

A liberalization strategy drafted by Armenia’s Civil Aviation Department and approved by Prime Minister Tigran Sarkisian’s cabinet last month envisages that Armavia will be replaced by up to three other Armenian airlines to be selected soon. Officials said on June 6 that the government will call a relevant tender within a month.

The head of the department, Artyom Movsesian, told RFE/RL’s Armenian service (Azatutyun.am) that the tenders have been postponed until after McKinsey submits concrete proposals on aviation reforms. He said the delay was suggested by that Armenia’s foreign partners.

In Movsesian’s words, only one Armenian company has applied for flight permissions so far. The company, Air Armenia, has transported only cargo by air until now.

Andre Andonian, a senior McKinsey executive who signed the agreement, said the U.S. consultancy will look into the aviation experiences of Armenia’s neighbors as well as Latin American countries, notably Chile and Peru. “We will talk to all relevant partners in Armenia and abroad and will come up with a balanced approach and the best option,” he said at the signing ceremony attended by Sarkisian.

Several European, Russian and other foreign companies have increased the frequency of their flights or launched new services to Armenia since Armavia terminated flights to Europe, the former Soviet Union and the Middle East on April 1. The Argentine operator of Yerevan’s Zvartnots airport welcomed these developments in May, saying that they will reduce the relatively high cost of air travel to the country.

Andonian said that the Armenian aviation sector continues to be characterized by a lack of competition.

Source: azatutyun.am

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