My Way Airlines Fails to Capture Georgian Market

In March of this year, My Way Airlines began laying the groundwork for its wide array of flight routes, using Tbilisi, Georgia as its hub. Flights officially launched in June. Routes included Tbilisi/Batumi-Kharkiv, Tbilisi/Batumi-Tehran, Tbilisi-Samara, Tbilisi-Athens, Tbilisi-Kiev, Tbilisi-Budapest, Tbilisi-Rome, and Tbilisi-Tel Aviv. There were plans to expand routes to Minsk, Dubai, Urumqi, Moscow, and St. Petersburg. Those plans were put on hold this week, however, when the company suspended its flights to Rome, Budapest, and Kiev until March, and has stopped flights to Kharkiv.

The company is owned by Chinese conglomerate Hualing Group, which has already made significant investments in Georgia. In May, My Way reported that it owned two Boeing 737-800s and planned to purchase two additional aircrafts by the end of 2018, but in a statement to Business Media Georgia, Chief Commercial Director Igor Aptsiauri noted that they only had one plane. Aptsiauri, who previously served as First Deputy Director of the Georgian Civil Aviation Agency, blamed the routes’ failures on low demand, a poor sales system, and the worsening political situation in Ukraine. Ticket sales were a particular challenge as tickets were only available by phone and in person for several months, and when routes and prices could be viewed online, they were not listed on the major flight aggregator websites.

My Way does not rule out the possibility of resuming flights in the high season, the spring and summer, and will continue to conduct flights to Tel Aviv all winter. Regular flights on most routes only started at the end of the summer, losing this year’s high season for travel. Flights were initially planned to start in March. Aptsiauri blames the delay on “pressure from certain companies on state agencies,” who dragged their feet in issuing operation permits. Aptsiauri refused to name the companies he accuses of pressuring governmental bodies, but said they are companies “already on the market.” He characterizes the airline industry in Georgia as “unhealthy competition” and says that it is an open secret within the industry that certain companies control the market.

There were rumors last week that Hungarian company Wizz Air, the biggest low-cost carrier operating in Georgia, which conducts flights out of Kutaisi International Airport, was being forced out of the country. Georgia’s Ministry of Economy and Sustainable Development rejected the claims, and added that the “disinformation” harms the national business environment. The rumor was started by HUB Georgia, who claimed they had a source who revealed that “the government had been putting pressure on the company, a process suspended due to the presidential elections in the country,” and that the government wanted to make changes to the aviation market, restricting competition in the field of passenger transportation. Wizz Air itself denied the rumors, saying they have no plans to leave the market, and will instead expand their activities in Georgia.

Approximately 1000 passengers have already purchased tickets for the canceled flights, all of whom will receive refunds in line with European regulations and standards.

More than $50 million has been invested in My Way, according to Aptsiauri. In May, he pitched the airline as a much-needed addition to the Georgian market and announced an ambitious five-year business plan to turn Tbilisi into a regional transit hub between Europe and Asia. Currently, international transit accounts for only 5-6% of Tbilisi International Airport’s traffic, and My Way stated a goal to eventually raise that number up to 40% through increased volume and new destinations. “What we see from Georgian Airways is they have their own niche market, they have their historical routes,” said Aptsiauri in a May interview with Forbes, “If you look at their development over the last ten years, it’s the same routes, it’s the same frequencies, the same the future, we [at MyWay] will also concentrate on connecting and transiting passengers. I think in this way we will … be at some point bigger than Georgian Airways.”

In March, just days after My Way released its plans, Georgian Airways announced 11 new European and Russian routes, bringing the number of direct flights the company offers up to 21. Davitashvili tried to differentiate his airline from the competition, saying, “Georgian Airways is...generally oriented on day-time flights to make our customers feel safer during the flight. Additional comfort and flight safety are two major priorities that we want to fully accomplish to create satisfaction among our passengers.”

By Samantha Guthrie

Image source: My Way Airlines

03 December 2018 17:27