Loading

Ryanair to Georgia after Russia bans flights; confronts Wizz Air

Ryanair will add Georgia as the 39th country in its network, with three route launches this winter and a fourth next summer. This followed intensive negotiations with the Georgian government, keen to cultivate new routes to EU destinations after Russia imposed a ban on direct flights between Russia and Georgia on 8-Jul-2019.

Before the ban Russia-Georgia routes were operated by Georgian Airlines and a number of Russian operators: Ural Airlines, Pobeda, S7, Aeroflot, Nordavia and Red Wings.

Russia imposed the ban in response to anti-Russia protests in the Georgian capital Tbilisi, but cited concerns over safety and air navigation services debts in connection with Georgian Airways and the much smaller Georgian operator MyWay Airlines. In late Sep-2019, Russia's foreign minister expressed hopes of a resumption of services, but did not give a time frame.

Ryanair's entry makes Georgia another battleground between Central Europe's biggest ultra LCC, Wizz Air, and Europe's biggest ultra LCC, Ryanair. After entering in 2012, Wizz Air is now the leading airline in Georgia, operating 27 routes (week of 9-Sep-2019, including one for Wizz Air UK), versus 17 for Georgian Airways.

Georgia's aviation market has enjoyed strong growth in recent years but the Russian flight ban is interrupting this trend. Ryanair's entry comes at a politically opportune time for the Georgian government.

Summary

Ryanair to launch three Georgia routes in Nov-2019 and one in Apr-2020

On 21-Aug-2019 Ryanair announced that it will launch its three routes from Georgia in Nov-2019. Tbilisi to Milan Bergamo will be operated four times weekly, and Kutaisi to Bologna and Marseille will both be twice weekly services.

In addition, Ryanair will launch a twice weekly Tbilisi to Cologne service in Apr-2020, after being persuaded by the Georgian Prime Minister of the importance to the country of having links with Germany.

Ryanair expects to carry 170,000 passengers annually to/from Georgia on these four routes and has said that it hopes to add new routes in the future.

None of Ryanair's four new routes are currently served by any operator, but Wizz Air will now also launch Kutaisi-Bologna in Nov-2019. Tbilisi-Cologne was previously operated in summer 2018 by Georgian Airways.

Wizz Air is also expanding in Georgia

Ryanair's ultra LCC rival Wizz Air remains far bigger in Georgia by seat share and plans to launch a Kutaisi-Cologne service from 1-Jul-2020, expanding its Kutaisi network to 41 routes. In addition to the airline's Kutaisi-Bologna launch, the two new routes will bring an additional 94,000 seats to Wizz Air's Georgian network, amounting to more than 1.5 million seats in 2020.

It also plans to increase Kutaisi-Milan frequency to four times weekly from 19-Nov-2019 and launch Kutaisi-Nice service on 12-Dec-2019 (brought forward from its originally planned launch in summer 2020).

Annual seat growth has averaged 20% pa since 2012, but is set to reverse in the coming winter

According to data from OAG, annual seat capacity to/from/within Georgia has grown at a compound average rate of 19.7% pa from 2012 to 2019 – more than doubling since 2015 and increasing by 3.5 times since 2012.

However, year-on-year growth will slow to just 4.3% in 2019, and winter 2019/2020 capacity is currently indicated to fall by approximately 5% versus last winter.

The national airline Georgian Airways increased its annual seat numbers at an average of 15.9% pa from 2012 to 2019, which was slower than the market average, but it has achieved 21.6% pa since 2015, in line with market growth.

Georgia: annual seats 2012 to 2019*

 

Georgian Airways was the biggest airline by seats in Jul-2019

In the week of 1-Jul-2019, the last week before the Russia flight ban, Georgian Airways was the leading airline by seat capacity in Georgia, with a 12.9% share. This was ahead of Wizz Air, which had 11.1% (including a 0.4% share for Wizz Air UK).

Number three Turkish Airlines had 9.2% of seats, just ahead of Ural Airlines, which had 8.3%. Flydubai was fifth, with 4.3%, followed by Aeroflot's LCC subsidiary Pobeda, with a 4.0% seat share, S7 Airlines on 3.8%, and the Ukrainian LCC SkyUp at number eight, with 3.6%.

Georgia: top 10 airlines, week of 1-Jul-2019

Rank

Airline

Seat Share

1

Georgian Airways

12.9%

2

Wizz Air

11.1%

3

Turkish Airlines

9.2%

4

Ural Airlines

8.3%

5

flydubai

4.3%

6

Pobeda

4.0%

7

S7 Airlines

3.8%

8

SkyUp

3.6%

9

Ukraine International Airlines

3.1%

10

Qatar Airways

3.0%

Wizz Air was the biggest airline by passengers in 1H2019

Wizz Air had more passengers than Georgian Airways in 1H2019, in spite of a lower seat share, reflecting its superior load factor.

The passenger share of the top five airlines in 1H2019 was 14% for Wizz Air, 11% for Georgian Airways, 10% for Turkish Airlines, 7% for Ural Airlines and 7% for Pobeda, according to Georgia's Civil Aviation Agency.

Wizz Air's leadership in Georgia by passenger numbers is also reflected in its leading seat share in the late summer period (14.9% for Wizz Air/Wizz Air UK versus 13.1% for Georgian Airways in the week of 9-Sep-2019) and in the coming winter schedule (19.5% versus 18.1% for Georgian Airways in the week of 4-Nov-2019).

LCC share in Georgia is more than 29%

In the first nine months of 2019, LCCs have their highest ever share of 29.1% of international seats to/from Georgia. This compares with an annual share of 26.8% in 2018 and marks a sharp increase from 3.5% 10 years ago.

Progress was rapid from 2009 to 2013, when LCCs' international seat share reached 24.4% before falling to 19.1% in 2016 and then growing once more to reach its current level.

All LCCs operating in Georgia are foreign and predominantly based in Eastern/Central Europe.

In addition to Wizz Air/Wizz Air UK and the leading airlines in the country are the LCCs SkyUp and Pobeda, also in the top 10, and the other LCCs serving Georgia: flydubai (just outside the top 10, with 2.9% of seats in the week of 9-Sep-2019), Pegasus Airlines, Air Arabia, airBaltic, flynas and Onur Air.

Ryanair's entry will no doubt help to push the LCC seat share higher still in 2020.

Georgia: LCC seat share*, 2009 to 2019**

 

Tbilisi International is Georgia's leading airport; traffic growth reversed in Jul-2019

Tbilisi International is Georgia's leading airport, serving the capital city and acting as Georgian Airways' main hub. It handled 3.8 million passengers in 2018 – more than three times the combined passenger numbers of the country's other two airports, Batumi and Kutaisi, each of which handled 0.6 million passengers in 2018.

Batumi is located on the Black Sea coast and Kutaisi is located between Tbilisi and the Black Sea.

Tbilisi's passenger numbers grew by 40.5% in 2017 and by 20.4% in 2018. In 1H2019 growth slowed to 11.6% at Tbilisi, to 1.9 million, whereas Kutaisi's passenger traffic jumped by 55.4% to 365,000 and Batumi's rose by 30.3% to 247,000. Combined traffic at the three airports was up by 18.2% year-on-year in 1H2019.

However, traffic fell by 10% at Tbilisi and Batumi in Jul-2019 following the suspension of nonstop Russia services, although Kutaisi enjoyed 14% growth in Jul-2019.

Georgia: airports ranked by passenger numbers, 2018

Rank

Airport

Passengers

1

Tbilisi International Airport

3,808,619

2

Batumi Airport

617,342

3

Kutaisi Airport

598,891

E/C Europe is the leading destination region for Georgia: one fifth of this traffic was Russia

Georgia's schedule is dominated by international routes, accounting for 99.5% of seats in the week of 1-Jul-2019, which was just before the ban on direct flights to/from Russia.

In that week E/C Europe accounted for 62.1% of international seats and Western Europe accounted for 10.5%. Middle East's share of international seats was 23.6%, Asia accounted for 3.0%, and North Africa for 0.8%.

Russia's 12.9% share of international seats accounted for just over one fifth of E/C Europe capacity.

Virtually all routes to/from Georgia are short/medium haul, with long haul destinations reached only through connections at hubs in Europe and the Middle East. However, there are signs that this could start to change: the Georgian Civil Aviation Authority has started to discuss with the US authorities the possibility of direct trans-Atlantic services.

Georgia: departing international seats by region, week of 1-Jul-2019

 

Expect more growth in Georgia-W Europe capacity

Ryanair's new services are good news for Georgia's government, which was keen to attract more EU routes even before the suspension of Russian services.

The country's Prime Minister, Mamuka Bakhtadze, said on 20-Aug-2019: "I have been personally receiving requests from our citizens to see Ryanair in Georgia and we made it happen".

Since a brief war with Russia in 2008, visitor arrivals to Georgia have grown from 1.5 million in 2009 to 7.2 million in 2018. The Georgian National Tourism Administration worked hard to achieve this growth.

Airline capacity between Russia and Georgia had been on a growth path before the ban. Weekly one way seat capacity between the two countries was less than 3,000 seats five years ago in the summer of 2014. In Jun-2019, it had risen past 21,000 seats.

Weekly seat capacity to Western Europe is now 10,000 seats, on average (Sep-2019).

Visa-free travel to the EU and expressions of support from the European Council (which called the ban "unjustified and disproportionate"), together with Ryanair's entry, suggest that Western Europe could take over from Russia as an important source of aviation demand for Georgia.

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More