ROUTES SILK ROAD: Developing Georgia as an Aviation Hub for the Silk Road

Since forming in 2011 as the airports authority of the state, United Airports of Georgia (UAG) has been sharply focused on developing key aviation infrastructure and growing the country’s airline networks. UAG owns three international airports (Tbilisi, Batumi and Kutaisi) and one domestic gateway (Mestia). TAV Georgia operates Tbilisi and Batumi, while Kutaisi and Mestia are operated by UAG.

Combined, Georgia’s airports achieved passenger growth of more than 30% in 2013. This saw UAG’s passenger numbers reach 1.8 million, up from 1.4 million in 2012. And the good news has continued in 2014, with the first quarter notching up growth of 20%, and signs point to this trend continuing.

UAG’s CEO, Ketevan Aleksidze, told our sister publication, Routes News, that Turkey, Russia and Ukraine are the group’s key markets, while the Baltic States, Poland, Israel and Western Europe are also experiencing significant growth. In particular, business traffic is showing positive signs. “Business traffic is growing to Georgia, because of its strategic location, domestic connections and the increased frequency of direct flights [from key markets],” she says.

Located at the crossroads of Asia and Europe, Georgia’s geography is an advantage on which UAG is looking to capitalise. Ideally situated between Europe to the west and Asia to the east, Aleksidze believes Georgia can profit from being a major transfer point between the two regions. To realise this, Aleksidze hopes to see more airlines launching direct flights from UAG’s airports.

While Georgia’s geography gives it a natural advantage, UAG is not resting on its laurels when it comes to growth. The group’s growth plans are based on a three-pronged approach: improving the group’s aviation infrastructure; positioning Georgia to become a regional hub; and raising awareness of the country’s tourism potential.

Aleksidze cites the construction of Kutaisi International Airport, the country’s and region’s first low-cost airport, as one of UAG’s biggest achievements. In its first full year of operation in 2013, Kutaisi’s performance exceeded expectations, handling more than 10% (188,682 passengers) of Georgia’s total aviation market of 1.8 million. “The airport made dramatic leaps forward in 2013 and judging by 2014 to date, its share is likely to double to 20% by year-end,” Aleksidze says.

Kutaisi International is located in Georgia’s second biggest city and opened in September 2012. Its full name is King David the Builder Kutaisi International Airport, after David IV, who is considered Georgia’s most successful ruler. The low-cost gateway’s facilities include a 4,000sqm terminal building designed by renowned Dutch architect studio UNStudio, as well as a new traffic control tower and office buildings. The airport’s European design symbolises UAG’s focus on growing partnerships with Europe’s leading low-cost carriers, including Wizz Air.

Wizz Air was the first LCC to start serving Georgia, carrying 173,000 passengers through Kutaisi in 2013. “Wizz Air is a good example of the sort of partnerships we wish to create,” Aleksidze says. “We started with the aim of opening up previously untapped Eastern European markets and we’ve steadily grown together.”

Improvements have been made at other Georgian airports, with Tbilisi and Batumi recently getting infrastructure and terminal upgrades. The two airports each experienced 20% growth last year and Tbilisi, in particular, is seeing an increase in frequencies. Aleksidze says expansion plans that will allow for increased capacity at the capital’s airport are already being considered.

Together, Georgian airports offer 35 direct connections to major destinations in CIS, Europe and the Middle East. UAG is hopeful it will be able to add new routes to the Americas in the next two years. Twenty-nine airlines currently serve the group’s airports, including international carriers Air Baltic; Alitalia; China Southern; Flydubai; Lufthansa; Qatar Airways; S7; Turkish Airlines; and homegrown Georgian Airways.

Wizz Air and Pegasus currently operate the largest number of low-cost flights within Georgia, and Aleksidze says expanding low-cost traffic is a top priority for the group. The CEO is confident Georgia’s business environment is conducive to attracting new LLCs. “The ease of setting up and conducting business here is simple thanks to an uncomplicated regulatory framework and down-to-earth bureaucracy. Georgia is also the region’s only country to have become part of the Open Skies agreement, another key attraction for LCCs.”

China is one of the countries from Asia that UAG is focused on, due to its huge market potential and its growing interest in Georgia. The airport group is in active negotiations with a number of major Asian airlines and believes there are a number of routes that hold promise.

Since its inception, raising the group’s profile and that of Georgian aviation and tourism in general has been a key focus for UAG. It has attended and exhibited at a number of global aviation and tourism events, most recently April’s Routes Europe. UAG also joined ACI Europe last October and participated in its 78th committee meeting in January.

The CEO says hosting Routes Silk Road is an opportunity to showcase Georgia to key airline decision-makers. The event will also allow delegates to personally experience what Georgia has to offer. “I always say that an airport is not only the doorway to a country, but a chance to create a strong first impression for customers and business partners,” she concludes. “The better we can serve the airlines, the better they can serve their passengers and that’s of crucial importance for us.”