Once in a while, especially during the peak season of tourism, our society starts complaining of high air ticket prices in our country. Airlines attribute it to the service tariffs charged by the airport. Moreover, certain Armenian airlines claim that the reason for their failure in the local market is the high service prices of Zvartnots Airport, not uttering a word about their own wrong marketing policy.
Are service prices of “Armenia” International Airports” CJSC reasonable, competitive and comparable with those offered by other similar airports? Let’s try to understand the rates set by Zvartnots. And in order everything is simple and fair, as well as for purposes of a justified comparison, it’s important to consider a number of factors affecting the airport service fees, among them the regional peculiarities of an airport, annual passenger flow, international certification criteria, and others. Another important factor to be considered is that airport operating costs are divided between its users, so larger airports serving more airlines can afford lower service fees, while smaller ones have to charge more for the same services.
In order to understand Zvartnots tariffs, we compared the basic and ground handling tariffs offered by regional and European international airports that served up to 4.1 million passengers in 2017.
Last year Zvartnots served almost 2.5 million passengers. Let’s now speak in figures on the example of “Airbus A320”, with average assumed load of 130 passengers, and 75 tons of maximum load. Landing and take-off fees for this aircraft are $1,112 at Zvartnots airport, $1,227 at Minsk Airport, $663 at Tbilisi airport, $878 at Baku, and $722 at Zagreb [the capital city of Croatia]. These airports are comparable in terms of the number of passengers served yearly. Passenger service costs at these airports are $3,042 in Yerevan, $2,860 in Minsk, $3,120 in Tbilisi, $4,259 in Baku, and $2,586 in Zagreb. There is no charge for aircraft security at Yerevan and Zagreb airports, while it costs $380 in Minsk, $132 in Tbilisi, and $263 in Baku. Passenger security fee – $304 in Yerevan, $798 in Minsk, $563 in Tbilisi, $3,346 in Baku and $989 in Zagreb.
No infrastructure fee is charged in Yerevan, Tbilisi and Baku, while in Minsk it costs $650, and in Zagreb – $436. Ramp handling charge is $1,636 in Yerevan, $1,672 in Minsk, $1,645 in Tbilisi, $2,383 in Baku, and $1,563 in Zagreb. The total cost of these services at the mentioned airports makes $6,094 in Yerevan, $7,587 in Minsk, $6,122 in Tbilisi, $11,129 in Baku, and $6,296 in Zagreb.
Here are the prices that an airline pays at the given airport:
| Zagreb | Minsk | Yerevan | Tbilisi | Baku | |
| ZAG | MSQ | EVN | TBS | BAK | |
| Landing and take-off | $722 | $1,227 | $ 1,112 | $ 663 | $ 878 |
| Passenger service fee | $ 2,586 | $2,860 | $ 3,042 | $3,120 | $ 4,259 |
| Aircraft security fee | – | $380 | – | $ 132 | $ 263 |
| Passenger security fee | 989 | 798 | 304 | 563 | 3,346 |
| Infrastructure fee | $ 436 | $650 | – | – | – |
| Ramp handling fees | $ 1,563 | $1,672 | $1,636 | $1645 | $2,383 |
| TOTAL | $6,296 | $7,587 | $6,094 | $6,122 | $11,129 |
As the figures show, among the 5 airports in the sample, although the other 4 serve more passengers yearly, Zvartnots is the cheapest in terms of declared tariffs. Moreover, the infrastructure of Zvartnots is the best in the region and, unlike other airports, Zvartnots has not increased its tariffs in the past 6 years, thus offering the cheapest tariffs, as shown in the table above.
However, there is a problem: prices at Zvartnots are cheaper if the State Air Exit Duty is not considered. It is that very AMD 10.000 state duty paid by every departing passenger in Armenia. The mentioned fee is paid by regular air carriers to the state budget of Armenia after each flight, and in case of non-regular / charter flights the airport charges it from the air carrier and transfers to the state budget. In other words, this AMD 10,000 collected from each passenger is not included either in the income of the airline or in that of the airport, but it is transferred to the Armenian state budget.
But how does this State Air Exit Duty of AMD 10.000 affect the airline costs? For example, if without the state duty an airline pays $6,094 for a single flight, the total cost including the State Air Exit Duty amounts to $ 8,785, thus increasing the airline’s expenses by 44%. That is, the price of AMD 10.000 included in the ticket price increases the airline costs almost by 44%.
Aravot Daily
06 November 2018
