17-Sep-2012 7:35 PM

FlyGeorgia launches operations as Georgian aviation market continues to grow

Analysis

FlyGeorgia launched operations last month, emerging as the main competitor to flag carrier Georgian Airways. The new airline quickly expanded into the international market after launching domestically and is now connecting Tbilisi with Turkey and Iran. The launch of a second major carrier for Georgia comes as the country's aviation market continues to grow with over 10 new routes connecting the country with other cities across Europe. The presence of low-cost carriers is also increasing with the expansion of Pegasus' services to the nation and entry of Wizz Air to the market.

Based at Tbilisi International Airport, Fly Georgia currently operates one leased A319 aircraft in a two-class configuration. FlyGeorgia's first service to be launched was Georgian domestic trunk route Tbilisi-Batumi on 03-Aug-2012. FlyGeorgia made its debut in the international market with twice weekly services from Tbilisi to Antalya (Turkey) and Tehran (Iran) on 28-Aug-2012. FlyGeorgia is targeting routes already served by other carriers with the exception of Tbilisi-Antalya.

FlyGeorgia initial routes

Route	Frequency	Launch date	Current operators
TBS-BUS	Twice weekly (daily from 30-Aug-2012)	03-Aug-2012	Georgian Airways
TBS-AYT	Twice weekly	28-Aug-2012	N/A
TBS-IKA	Twice weekly	28-Aug-2012	Georgian Airways

FlyGeorgia increased Tbilisi-Batumi frequency from twice weekly to daily on 30-Aug-2012, becoming the leading carrier domestically in Georgia, overtaking national carrier Georgian Airways. This isn't a huge feat however as Georgia's aviation market is primarily international with only approximately 5% of total scheduled capacity attributed to the domestic market, according to Innovata data.

Eastern and Central Europe is clearly Georgia's largest market and accounts for approximately 78% of overall international capacity. The second largest market is Western Europe with 10.5%, followed by the Middle East, Central Asia and North East Asia which combined only account for 12% of total international capacity.

Georgia international capacity by region (seats): 17-Sep-2012 to 23-Sep-2012

FlyGeorgia plans significant network expansion in late 2012

FlyGeorgia plans to operate to destinations in Europe, the Middle East, CIS, central and south Asia. In late 2012 the airline plans to launch services to Amsterdam, Kiev and Minsk.

Kiev and Minsk are among the top 10 international routes from Tbilisi. Tbilisi-Amsterdam is also already operated by Georgian Airways so FlyGeorgia will be facing competition on all its new routes.

This expansion will require extra aircraft in addition to its one existing A319. In Jun-2012 it was reported the airline would initially operate two leased A319s but FlyGeorgia ended up launching with just one A319 there have not yet been any announcements about sourcing the second aircraft.

FlyGeorgia planned network expansion

Route	Current operators
TBS-AMS	Georgian Airways
TBS-KBP	Aerosvit/Ukraine International Airlines
TBS-MSQ	Belavia

Tbilisi International Airport top 10 international routes ranked by capacity (seats): 17-Sep-2012 to 23-Sep-2012

The airline has not detailed how many frequencies it will initially operate on the new routes, though FlyGeorgia is expected to operate them at least twice weekly each, given its initial network frequencies. The expansion could see FlyGeorgia double its total capacity, which is currently about 800 weekly seats.

By the end of the year, FlyGeorgia will likely account for about 4% of total capacity in Georgia. FlyGeorgia now accounts for about 2% of total capacity while Georgian Airways accounts for about 16% of capacity in its home market, where foreign carriers dominate and Turkish Airlines is slightly larger than the largest local carrier.

Georgia capacity (seats) by carrier: 17-Sep-2012 to 23-Sep-2012

Second Georgian start-up to launch in Oct-2012

Georgia's aviation market is facing a number of changes in 2012 with the launch of not only FlyGeorgia but also Air Caucasus. Air Caucasus is reportedly planning to commence operations in Oct-2012 with the launch of Tbilisi-Kutaisi service (not currently operated by any carrier). As previously reported by CAPA, Air Caucasus is backed by investment from Georgia and the Middle East.

Meanwhile, Georgia's aviation market continues to grow with the help of existing carriers, with 11 new routes launched (or to be launched) to the country from across Europe in 2012. Two of these new routes see the expansion of Georgia's low-cost market with the introduction of Wizz Air and the launch of Pegasus' second route to Georgia. Georgia's current low-cost carrier penetration rate is about 12%.

Pegasus in Oct-2012 will begin service to the Georgian Black Sea resort of Batumi from its hub at Istanbul Sabiha Goken Airport. Pegasus already serves Tbilisi.

Pegasus will be only the fourth foreign carrier at Batumi, following Turkish Airlines, Ukrainian carrier Aerosvit and Russian carriers Belavia and S7. Georgian Airways also operates a handful of international routes from Batumi including to Kiev, Moscow, Odessa, Tehran and Tel Aviv, according to Innovata. FlyGeorgia currently does not operate any international routes from Batumi.

New routes from Georgia in 2012 (excluding FlyGeorgia)

Airline	Route	Frequency	Aircraft	Launch date
Qatar Airways	TBS-GYD-DOH	Daily	A320	02-Feb-2012
Estonian Air	TBS-TLL	Four times weekly	CRJ900	16-Apr-2012
Georgian Airways	TBS-VKO	Daily	737	18-Apr-2012
Georgian Airways	TBS-CDG	Twice weekly	737	15-May-2012
Aegean Airlines	TBS-ATH	Twice weekly	A320	11-Jun-2012
Georgian Airways	TBS-DME	Three times weekly	CRJ200	21-Jun-2012
Alitalia	TBS-FCO	Twice weekly	A320	01-Jul-2012
Air Astana	TBS-TSE	Twice weekly	E190	01-Sep-2012
Armavia	TBS-EVN	Twice weekly	Yak42	24-Sep-2012
Wizz Air	KUT-IEV	Twice weekly	A320	27-Sep-2012
Pegasus	BAT-SAW	Twice weekly	737	08-Oct-2012

The launch and planned expansion of FlyGeorgia is extending Georgia's local aviation industry and resulting in a significant increase in the country's capacity albeit from a small base. Georgia has a seen a number of new routes throughout 2012 from both local and foreign carriers, further expanding the country's links with the rest of Europe as well as increasing the presence of low-cost carriers. Further developments are yet to come in 2012 with the launch of Air Caucasus in Oct-2012 and further expansion by FlyGeorgia and other carriers.

FlyGeorgia launches operations as Georgian aviation market continues to grow

FlyGeorgia plans significant network expansion in late 2012

Second Georgian start-up to launch in Oct-2012

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