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9.2.3 Aviation corporate news
Georgian Airways, the privately owned flag carrier of Georgia, will ask the European Court of Arbitrage to award it compensation of at least $25mn from Russia for banning its aircraft from Russian airports purportedly because of $16.6mn in overdue debt and for “aviation security that does not meet standards,” Business Media reported.
The Russian Civil Aviation Agency invoked unpaid fees in the amount of $16.6mn as the ban was introduced but that explanation was simply a lie and something that could be easily proven, Georgian Airways CEO Roman Bokeria reportedly said. The airline’s compliance with safety standards could also be easily substantiated, he added.
According to an order issued by Russian President Vladimir Putin, effective July 8, Russian airlines were banned from flying to Georgia for "security" reasons. Also applying the ban to the Georgian airline, the Kremlin cited the safety standards and debts. As a result of the flight ban, the airline fell into dire financial straits as it suddenly had to return all Russia tickets sold before the summer season. The airline was flying to five destinations in Russia in this period, namely Moscow, St. Petersburg, Kazan, Ryazan and Ufa.
Speaking to Business Media, CEO Bokeria said the carrier sold 40,000 tickets before the summer season. They cost millions of dollars to refund.
Bokeria added that the airline did not receive any support from the government. “I can tell you that as of today, we have not received any help from the government. This is despite the fact that we have repeatedly appealed to the government, the head of government, in this regard. As of today, the company has not received any assistance," he said.
Russia’s Federal Air Transport Agency (Rosavia) has permitted the Russian S7 Airlines to fly from Moscow to Kutaisi, Georgia, according to Georgian news service InterPressNews. All Russian airlines were banned from flying to Georgia for “security reasons” as of July, after diplomatic relations between Moscow and Tbilisi worsened.
The decision was posted on October 15 on the website of Rosavia.
According to a decree, the airline now has permission to operate Moscow-Kutaisi flights with a frequency of sever times per week. S7 has not yet scheduled the flights.
S7 Airlines (legally JSC Siberia Airlines) is a Russian carrier that ranks second in the country in terms of the number of passengers carried. Its headquarters is located in the small town of Ob (Novosibirsk Region), near Tolmachevo Novosibirsk International Airport. It has bases at Domodedovo International Airport in Moscow and and Tolmachevo Airport in Ob.
At the end of June 2019, President Vladimir Putin signed a decree banning airlines transporting Russian citizens to Georgia from July 8, following anti-Kremlin protests by Georgians and insults thrown Putin’s way by a TV presenter.
9.2.4 Tourism corporate news
LSE-listed investment fund Georgia Capital, the largest shareholder in Bank of Georgia and Georgia Healthcare Group, has announced plans to consolidate some of its businesses into a real estate holding that will invest $560mn in the tourism industry over the next five years.
The new holding is Georgia Real Estate Holding. It will merge with the M2 Group (which will include M2 established by Bank of Georgia in 2006, and a
58 GEORGIA Country Report December 2019 www.intellinews.com
