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Head of National Competitiveness Foundation of Armenia denies rumors about profitability of air transportation business

YEREVAN, December 10. /ARKA/. The rumors going around about high profitability of air transportation business has nothing in common with the reality, Arman Khachatryan, executive director of the National Competitiveness Foundation of Armenia, said Tuesday at a news conference in Novosti International Press Center.

“If we consider the matter in a global context, we’ll see that between 1990 and 2012, investments in the international air transportation area, i.e. interests paid to banks, exceeded profits a great deal,” he said adding that the maximal profitability in the world aviation was equal to zero at the mentioned period.

The executive director also said that the air companies’ average one-passenger profit is 1% or $2.56, while losses are equal to 5% or $10.

Speaking about the state/private sectors ratio at the air transportation market, Khachatryan said that air transport market in North America fully belongs to private companies, in Europe and Latin America less than 20% of the market is run by the government, in African and Asia Pacific public and private sectors have equal shares in the market and only in the Middle East about 90% belongs to the government.

“In particular, in oil-rich Middle-East countries, multibillion investments are made to support local air companies… Besides, these companies are owned by state sovereign funds, not the government,” he stressed adding that so-called open-sky policy is pursued even in the countries with governments dominating the air market.

On October 23, Armenia’s government approved the program implying provision of competitive and long-term air transportation services in the country.

The program is based on a joint study of McKinsey & Company and National Competitiveness Foundation of Armenia.

According to the data in the study, Ryanair, with its 79.6 million passenger turnover, topped the passenger turnover ranking in 2012.

The other companies in top five passenger carriers were Lufthansa (50.8 million), easyJet (44.6 million), Emirates (37.7 million) and Air France (33.6 million).

Emirates was singled out among the world air companies for the longest mileage (79.6 million kilometers), United Airlines came second (50.8 million kilometers), Lufthansa third (44.6 million kilometers), Air France (37.7 million kilometers) and Delta Airlines fifth (33.6 million kilometers). —0—

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