ARMAVIA INCREASES ITS SHARE IN ARMENIA’S AVIATION MARKET FROM 38% TO 50%

YEREVAN, JULY 22. ARMINFO. The national air carrier of Armenia Armavia
has increased its share in the country’s aviation market from 28%
to 50%, says the company’s commercial director Artur Zakaryan.

If in the first half year of 2004 Armavia carried 164,300 of 434,600
passengers travelling via Zvartnots Airport this year the share is
172,000 of 352,600. Armavia is presently facing serious competition
and one of its key tasks is to retain its positions on the market.
Zakaryan says that all the company’s recent problems were due to
transition: transfer of the company’s technical administration from
Russian cities to Armenia, optimization of the ticket sales network
and so on.

Zakaryan says that recently Armavia started flying from Yerevan to
Voronezh and Tashkent bring the number of its directions to 29.
Besides the company has increased the frequency of its flight to
Europe. Given tough competition in the European direction Armavia
is going to follow the policy of commercial aggression. The company
has already reduced its ticket prices for Europe by 20% and also to
certain extent to Moscow. But this costs the company a pretty penny
as the fuel price at Zvartnost has rose from $443 to 750. So Armavia
is considering more flexible reduction mechanisms.

Armavia is also planning to seriously enlarge its sales network in
the US and by July 30 to sign a contract with Lufthansa for the use
of its sales network.

Zakaryan says that Mika Armenia Trading has got all the rights and
liabilities concerning the leasing of Armavia’s four Airbus-A-320s.
Besides Armavia is exploiting Yak-2 and IL-86. In Sept the leasing
of one A-320 is expiring. In next winter the company will work with
three A-320 but by next summer it will lease one more A-320 again.
The maintenance is carried out according to the scheme agreed on with
Lufthansa Technics via Siberia company (Russia) – minor problems are
resolved in Armenia, medium ones in Russia (Novosibirks) and serious
ones in Europe. But in case of a more acceptable proposal the company
will change the scheme.

Zakaryan says that the company fulfills all of its obligations to
the state and tightly cooperates with Zvartnots Airport. There are
certain tasks in the airport which I hope will be resolved as soon
as a new terminal is launched in 2007, says Zakaryan.

The new projects for example the US direction are long-term and
safety-related. The US sets very high airport operation requirements
in both technical and security terms. Not all depends on Armavia
here. The growing demand is for the moment being covered by the
optimized work of the available planes.

To remind, in early June Mika Armenia Trading bought 68% of Armavia’s
shares from Siberia and now controls all 100% o the company. In 2004
Armavia made 5,375 flights carrying 430,900 passengers – 42% more
than in 2003. In 2004 the company’s turnover totalled almost $90 mln.