By Raffi Elliott 

A history of problems: 

The brief time since Armenia's regaining of independence has been rather turbulent for its small aviation industry. 

As the USSR fell apart, Armenia, having been a constituent republic received a number of former Aeroflot jets which formed the basis for a new Armenian national carrier, Armenian Airlines, which served a number of routes to Russia and continental Europe. 

However, environmental restrictions within the European Community meant that the soviet-era fleet would no longer be able to fly its European routes, effectively condemning the new airline to bankruptcy. This failed first attempt was shortly followed by a second, albeit controversially short-lived venture; Air Armenia's assets were opaquely liquidated to form the new, privately-run, supposedly publicly-traded, Armavia.  

Armavia, officially managed by the Russian-Armenian oligarch Mikhail Baghdasarov was able to lease, and later purchase, a small fleet of second-hand airbuses, allowing it to expand its routes into the EU and Russia, as well as serving some middle-eastern destinations, such as Dubai, Aleppo and  Beirut. despite a few accidents, Armavia essentially flew with a descent record. 

Despite apparent successes, it soon became apparent that Armavia was being plagued by financial issues, incompetent management, and inefficient use of resources; with more flights being cancelled, and others being delayed as a result. The company's true financial situation began to surface when, being the first recipient of the Russian-Italian made Sukhoi Superjet, it soon had to return its purchase, as well as cancel a second order for a second one.  

This was followed by a drastic reduction of routes. Armavia further caused controversy, when they cancelled their flight to Aleppo, only to reinstate it with grossly inflated ticket prices, which most of the ethnic-Armenian refugees fleeing the Syrian Civil War could not afford.  

A recent dispute between the failing airline and the Corporacion-America-managed Zvartnots Airport over gate fees further raised speculation of imminent bankruptcy; and, as an "ArmeniaNow" article pointed out, fully embodied the stark contrast between  a western-style properly managed corporation (such as the Airport), and a soviet-style oligarch run and operated company which relies on kick-backs and government favouritism to survive. 

Today, Armavia flights are routinely between 2 and 3 hours late or sometimes cancelled, to the great discomfort of travellers, and its future is uncertain. As of March 30th, Armavia has already filed for bankruptcy. 

Challenges and Solutions 

Other than the obvious factors such as the endemic results of oligarch-style mismanagement, which plagues most other sectors of the Armenian economy, the most glaring problem is that Armavia simply missed its mark. the airline failed to establish its niche. it flies against tough competition in very crowded routes such as Yerevan-Moscow, Yerevan-Sochi, Yerevan-Krasnodar, and so on, which are served extensively by a number of domestic Russian airlines, without offering a competitive edge such as better service, cheaper airfare, customer loyalty points or anything. As far as most labour migrants are concerned, it is a soviet airline like all the others. The Yerevan-Dubai route, for example, is served by both Armavia and Emirates subsidiary: FlyDUBAI. The difference in Ticket-price is almost minimal (usually less than 50 Euros), yet FlyDUBAI offers outstanding customer service, friendly staff, both on the phone, and on the plane, as well as online booking. Armavia offers none of that…well worth the extra 50 Euros…. 

Low-Cost People Mover? 

Second, Armavia totally fails to make proper use of its logistical hub in terms of boosting number of travellers. There is a gross miscalculation in their mission statement: Yerevan does not have to be a FINAL DESTINATION, as much as it could also serve as a transit station. Granted, Zvarnots airport (which recently won an award for the best-managed airport in Eastern-Europe by the way) DOES have higher-than-average gate fees, which, with some negotiations, could be brought down, but the point is that the aerodrome is equipped to handle almost all aircraft flying in the world today, and the facilities could handle much larger volume than it does today. This, coupled with Armenia's suitable geographical location as a transit point between east and west would allow the company to compete in a new airline market: that of low-cost alternative.  

If people could travel from Western Europe, or North America to South-East asia for several hundred dollars less than one of the major airlines, they would certainly not mind a layover in Armenia; and similarly, Hotel managers, tour companies and various other Armenian businesses wouldn't mind the extra customer base. Seems like a win-win for all.  

It wouldn't be difficult for Armavia to pull this off. It would be as simple as following the Ryanair, or EasyJet model of avoiding large airports in favour of smaller, regional airports, where gate fees are much lower, serve better quality meals for a small fee, charge for luggage, or extra leg room and so on.  

Brand Recognition 

One of the most irritating parts about Armavia, is the fact that the first 3 letters in the name correspond to the name of the Republic of Armenia. Right now, there is no greater shame than having such an airline serving as Armenia's national air carrier. I'm also sorry to say that hiring Gerard Depardieu, who has recently lost his marbles, and began prostituting himself to the whims of a number of post-soviet dictators does nothing to help raise brand awareness.  

Maybe Armavia would do well to hire a public relations firm, rebrand itself as safe, reliable and cheap alternative to Emirates of British Airways, and advertise themselves as such.  

Freight-Traffic Development 

Being based in a tiny, landlocked country which is being blockaded on two sides, it comes as a total shock that Armavia hasn't yet developed a cargo division. the solution seems obvious: buy freight aircraft and start flying cargo in and out as a way to make extra cash. 

Of course, none of these changes could be implemented until the management problem is resolved. the practice of hiring and promoting based on nepotism and kick-backs needs to cease immediately, as such positions which be awarded on the basis of meritocracy. This would allow a competent management team to properly oversee company operations. 

To recap: if Armavia one day decides to get its act together, it could very easily rise from the grave through a simple formula of hiring a competent management team, finding its niche, and gaining the competitive edge by rebranding itself as  a safe, reliable, low cost airlines which can connect the world. That way, Armenians will finally regain their pride in their national carrier....oh, and maybe have an ARMENIAN version to their site for a change...  

Raffi Elliott is a Yerevan-based Canadian-Armenian political commentator who frequently writes about Armenian social, political and economic trends on his blog: www.mshak.org