The FINANCIAL — “Forecasts are more pessimistic than optimistic,” says Nino Giorgobiani, PR Manager of Georgian Airways, commenting on airline traffic in Georgia and worldwide. In Georgia since the war with Russia airline companies have faced double impacts. Conflict with Russia helped Ukraine International Airlines to and from Georgia to increase its number of passengers by 90%.
“Since the August war, according to our analysis the number of Ukrainians wishing to enjoy Georgian hospitality has decreased by 90%. Transit traffic increased dramatically due to the cancellation of direct flights between Georgia and Russia,” Evgeniya Satskaya, Corporate Press Secretary of Ukraine International Airlines, told The FINANCIAL.
“The total number of UIA passengers to/from Tbilisi in 2008 was 28 thousand. During the September-December period there were about 12 thousand. Approximately 72% were transfer passengers and 28% point-to-point,” Evgeniya Satskaya says.
“During the economic crisis, even for the biggest airline companies in the world, the number of passengers is decreasing. Most people who had stable work are losing their jobs. A certain category of people who had previously been going on flight trips will now not be able to fly. There are also some problems connected with tourism. According to all these forecasts the outlook is more pessimistic than optimistic. The number of passengers will decrease,” Nino Giorgobiani, PR Manager of Georgian Airways, told The FINANCIAL.
Due to the economic crisis, for most of the leading airlines worldwide, the number of passengers has decreased.
“After the August war, the number of passengers of Georgian Airways (Airzena) has decreased by 55%. 32,546 passengers were carried from Georgia and 23,409 passengers to Georgia with the direct flights of our company. In 2008, 110,204 passengers have used our airlines,” Nino Giorgobiani said.
According to The FINANCIAL’s information, the International Air Transport Association (IATA) forecasted industry loss of USD 2.5 billion in 2009.
Passenger traffic was expected to decline by 3% following growth of 2% in 2008. This was the first decline in passenger traffic since the 2.7% drop in 2001.
IATA has forecasted that the losses for European carriers will increase ten-fold to USD 1 billion. Europe’s main economies are already in recession. Hedging has locked in high fuel prices for many of the region’s carriers in US dollar terms, and the weakened EUR is exaggerating the impact.
The aviation industry is currently reporting falls in passenger volume and collapsing demand worldwide, a negative trend which continued in November, Austrian Airways reports.
“The Austrian Airlines Group carried 7.1% fewer passengers in November 2008 in the scheduled and charter segments than in November 2007, although this was also due to capacity reductions. The overall load factor fell by 0.8 percentage points, to 72.8%. The aviation sector is expected to continue suffering significantly from the effects of the wider financial and economic crisis in coming months”.
“Lufthansa cancelled flight operation to TBS for a certain period during the August war in Georgia and LH was the first western airline to restart flight services after schedule interruption. All in all despite August flight cancellations we had a stable number of passengers carried by Lufthansa in 2008 in comparison with 2007,” Stefan Schwarz, Lufthansa General Manager Georgia, told The FINANCIAL.
“It took some time to recover and in October 2008 Lufthansa had fully recovered from the war and came back to normal passenger flow,” Stefan Schwarz declares.
“Lufthansa carried more passengers worldwide in 2008 than in the previous year. In the twelve months from January through December, a total of about 57 million passengers took flights with Lufthansa, an increase of 1.2 percent from the previous year’s level. Capacity in the same period was raised by 4.9 percent. Revenue passenger-kilometres’ rose by 3.5 percent. The seat load factor fell by 1.1 percentage points to 78.6 percent,” Mr. Schwarz says.
Apart from decreasing the number of passengers, due to the reduced oil prices at the time, ticket costs are falling.
According to Praguepost.com Czech Republic’s biggest travel agencies are cutting fuel fees for charter flights in reaction to the drop in oil prices, which were especially steep in the last quarter of 2008. A barrel of oil, close to USD 150 in July, has sunk to below USD 50 (963 Kč). That price, however, is likely to remain volatile and rise again.
“Moreover Lufthansa further reduced its fuel surcharges as of 16 December. Prompted by the lower oil price, the surcharges for European flights were cut by EUR 3 to EUR 21 per flight segment. The surcharge for long-haul flights was slashed by EUR 10 to EUR 82 per flight segment,” Stefan Schwarz declares.
“UIA already decreased the ticket price on Kiev-Tbilisi-Kiev starting from December 15 by 28%. We will continue to reduce fuel charges on all our flights. The competitor situation will force us to keep all costs as low as possible,” Evgeniya Satskaya says.
“We had special discounts on Kiev trips, which continued till now, one way begins from EUR 50. From the end of January we will have discounts on Tel-Aviv. A round trip to Tel-Aviv instead of USD 500 will cost USD 299. This action will be continued till March,” Evgeniya Satskaya told The FINANCIAL.
“Prices of tickets to Austria, round trip – EUR 330 (German Euro 330, French Euro 385). Transit trips: Europe via Vienna – EUR 450; Europe passing through Paris – EUR 450; United States passing through Amsterdam – EUR 475,” Nino Giorgobiani declares.
“We have more than 20 fares in each direction. To give you an idea, fares from Tbilisi to most of Western European points and back via Kiev this winter start from EUR 263 (Round Trip),” Evgeniya Satskaya says.
“All ticket fares always depend on the details of booking: destinations, variety of service class, how many days in advance the booking is made, etc. The most attractive fares are available in the frames of special offers,” Stefan Schwarz declares.
Lufthansa officials declare that in today’s economical environment worldwide it’s a good result to stay stable which is what LH is showing for the time being.
Georgian Airways Airzena declares that price changes will depend on the changes of the national currency against the USD and EUR.
“Scotland’s main airports have lost almost 500,000 passengers in just 10 months, signalling a reversal in the era of expanding air travel and highlighting a major dent in the Scottish economy,” according to Scottish newspaper The Herald. Passenger figures for Scotland’s biggest airports – Edinburgh, Glasgow, Aberdeen and Prestwick show that the drop in passengers accelerated in November, while industry analysts and business leaders told The Herald that the UK’s economic problems would put more pressure on airlines in 2009.
Opposite to Scottish airlines, officials of Ukraine international airlines are staying optimistic and declare that they hope an increase of passengers will be possible in 2009. “We are going to attract customers by flexible commercial policy, keeping the quality of a high service classic airline and excellent balance of price and quality,” Evgeniya Satskaya says.
“We are going to change our menu from Tbilisi to Kiev and provide passengers with regular European meals that we are offering on all other international flights, just after Georgian authorities together with the World Health Organization will stop limitation for catering in Tbilisi airport,” Evgeniya Satskaya declares.
“Security is our company’s top priority, we are going to continue working on technical issues and offer our customers high quality service,” Nino Giorgobiani says.
Written By Tako Khelaia