Page 15 - bne_newspaper_June_28_2019

Eastern Europe
June 28, 2019 www.intellinews.com I Page 15
Russia bans tourism in Georgia “to protect its own nationals”
Responding to recent developments in Tbilisi
in which Russian lawmakers were asked to terminate their visit and leave the country
amid big anti-Russian protests, which on June 24 entered a fourth night, Russian President Vladimir Putin convened an emergency session of the Russian Security Council to announce a temporary ban on flights to and from Georgia starting July 8, “to protect Russian citizens from violence or other illegal actions.”
But Russia’s move might actually prompt a wave of support for Georgia as a tourism destination. A twitter campaign #WorldWelcometoGeorgia is already online and over 18,000 Russian citizens signed within a couple of hours an online petition calling on Putin to cancel his recent ban
on flights between Russia and Georgia. Lithuania has become one of the first countries to join a new campaign supporting Georgia’s tourism industry by calling on more of their citizens to visit the country. Tourists from ormer USSR countries like Ukraine are likely to replace Russian tourists, ironically exactly because of the Russian language legacy.
The Russian Transport Ministry later announced that flights of Georgian airlines to Russia will also be suspended from July 8. It invoked debts worth under $1mn dating from 2008. But the move is more likely a response to Air Georgia offering flights to Russian tourists, who are rather unlikely to renounce their holiday plans.
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Putin reiterates Russian government's support for air carriers
IntelliNews Pro
During the annual live national phone-in Russia's President Vladimir Putin spoke in favour of includ- ing bitumen and jet fuel in the damping surcharge mechanism. The initiative would imply that oil producers will be compensated for the difference between the domestic and net back export price of jet fuel, which could cap jet fuel price growth.
As reported by bne IntelliNews, due to high jet fuel prices Russian airlines posted a record-loss in the first quarter of 2019, following a cumulative loss in 2018, risking a series of bankruptcies in the sector and/or increasing ticket prices. Regional carrier UTAir has already defaulted on bond
payments and national carrier Aeroflot has been reporting poor results.
In the first quarter of 2019 fuel costs amounted to RUB89bn out of total costs of RUB352bn, while RUB93bn accounted for leasing costs and RUB53.6bn for airport fees. Analysts surveyed by RBC believe that rising fuel costs outpacing the increasing in revenues indicate that the carriers have been trying to avoid passing on the costs to customers by sharply increasing ticket costs, as they battle for market share.
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