New Georgian carrier gets Boeing 737s and looks to recover ceded routes

Published: 1/21/2000

At the end of last year, the bid by Jermal Margveladze, former Chairman of the Georgian Department of Air Transport, to sell off the struggling Georgian Airlines failed. Now, the country"s two private airlines, Airzena and Air Georgia, have formed an alliance to rescue the state owned carrier. The reasons for the failure to sell the airline appear to be not only its general condition, but the rather onerous investment conditions for a new investor, including guaranteeing jobs among the 450 workforce, and the reported price of $25m for a 49% stake. The only reported interest in the tender came from neighbouring Turkish Airlines. However, according to a report in the 7 Dghe in Georgia, the government, fearing foreign control of the sector, withdrew the airline from the tender. It has also been reported that Margveladze has now been replaced by Gya Nizharadze as Chairman of the Department of Air Transport, suggesting that the complex tendering process did not have full government support. Discussions regarding the leasing of western aircraft, to add to the all-Russian fleet of Georgian Airlines, led to premature reports in November 1999, that two Boeing 737-500 had been leased from Hamburg-based, Hapag-Lloyd. It seems that the discussions have now been completed and, according to Nizharadze, two aircraft will be leased to the alliance carrier, Airzena Georgian, for a period of five years, with potentially another 737 being leased in the summer. The acquisition of new aircraft will also allow the Georgian carrier to recover those routes to major centres it had ceded to other carriers, due to inadequate aircraft. There does seem to be some debate as to whether this move will be in breach of contract with British Airways, owing to early cancellation. According to Air Georgia, the new airline operates one newly delivered Boeing 737-500, three Tu-154,one Tu-134, one Il-62 and will probably have one or two Yak-40s. The state retains control of the rump of the Georgian Airlines fleet listed in the tender documentation of five Tu-154s and five Tu-134s and 11 Yak-40s. Associated articles: www.concise.org 21st May 1999; 28th July 1999; 22nd November 1999;

Article ID: 1339