Russian air carriers lost $50mn from Moscow’s Georgia flight ban
Russian airlines are looking for compensation from the government after the Kremlin’s ban on direct flights to Georgia cost them a combined 3.2 billion rubles ($50 million).
President Vladimir Putin ordered a temporary ban of passenger flights from Russia to Georgia this summer following an outbreak of unrest in Tbilisi triggered by the visit of a Russian lawmaker. The Russian government promised at the time to compensate airlines for their losses. The Russian move came as an external economic shock to Georgia, whose tourism industry, which mostly relies on Russian tourists, suffered heavy losses.
According to the calculations of Russian officials, the Yekaterinburg-based Ural Airlines suffered the heaviest losses at around 1.2-1.3 billion rubles (around $20 million). Aeroflot and S7, the country’s two biggest airlines, lost 700 million rubles ($11 million) each. The losses of Pobeda Airlines, a Moscow-based low-cost airline amount to 400 million rubles (around $6.1 million), with the other Russian air companies, Red Wings and Smartavia losing around 120 and 100 million rubles ($1.9 million and $1.65 million), respectively.
In October, the Georgian foreign minister Davit Zalkaliani called for resumption of flights while Sergey Lavrov, his Russian counterpart, said this could only be done if the Georgian government takes steps against what he described as Russophobia in the country.
There has been “no progress” in compensation talks with the Transportation Ministry, one of the airline employees was cited by Vedomosti as saying. Most likely, talks will continue at a “sluggish” pace until flights to Georgia resume and the topic dies, another airline employee told the news outlet.
The airlines’ fears reportedly stem from them not being compensated for a rise in kerosene prices in 2018 despite a presidential order.
In the third quarter of 2019 Georgia has lost more than 100 000 tourists from the Russian Federation. Totally for three quarters of the year, 213 300 Russian tourists visited Georgia: 74 000 Russians arrived in the country in the first quarter of 2019, 131 500 in the second quarter and 7 800 in the third quarter. In general, despite the prohibition of direct flights from July 8, 2019, the decrease in tourist flow from January to September from Russia to Georgia amounted to only 3,5% (last year, 220 900 Russian travelers arrived for the same period). As the spokeswoman of the Russian Union of Travel Industry Irina Tyurina explained, this result is connected with significant increase of tourist flow to Georgia from January to July 2019.