Central and Eastern European low-cost carrier Wizz Air is to significantly expand its operations in the Caucasus region of Eurasia with the introduction of four new routes from Kutaisi in Georgia, including the first ever low-cost connection from the country into the European Union. The carrier will introduce new connections to Dontesk and Kharkiv in Ukraine and Katowice and Warsaw in Poland, adding to its existing link to Kiev.

Wizz Air made its debut in the Georgian market in October 2012 when its Wizz Air Ukraine division inaugurated flights from Kiev to Kutaisi, Georgia’s second largest city and former capital of the ancient Kingdom of Colchis. The city, the principal location in Georgia’s western region of Imereti was a major industrial centre prior to Georgia’s Independence from the Soviet Union but the subsequent economic collapse in the country has meant that the majority of development and resources was instead focused on the capital Tbilisi.

However, this is beginning to reverse as Georgia looks to the tourism market to support its economic development and the recent reconstruction of Kopitnari Airport in Kutaisi, now better known as David the Builder Kutaisi International Airport after the 11th Century King David IV, who is popularly considered to be the greatest and most successful Georgian ruler in history, has helped support this policy.

“These announcements underpin Wizz Air's commitment to Georgia.  Our landmark Warsaw - Kutaisi route brings Georgia closer to the European Union as Warsaw serves as a natural connecting point to Wizz Air's extensive network to Western Europe.”

John Stephenson
Executive Vice President, Wizz Air

Up until this year, air service connectivity from Kutaisi has been limited. Russian carriers S7 Airlines and Ural Airlines offer the only other direct scheduled flights from the city with links to Moscow and the arrival of Wizz Air Ukraine last year was a major step in putting the city on the global route map. Kiev was not a new destination from Kutaisi and had been formerly served by Soviet behemoth Aeroflot, but more recently by Georgian International Airlines and Aerosvit Airlines. However, the introduction of a low-cost offering has brought stronger demand stimulating the market and the increase to a daily operation will support this further.

“King David the Builder Kutaisi International Airport has brought new possibilities for travellers as well as for the economic development of the region and country,” said Georgian Deputy Minister Dimitri Kumsishvili. “The increase of the Kutaisi – Kiev route frequency shows the success of the new Airport and growing interest of tourists in Georgia. We believe that these new routes will contribute to even greater boost of tourism and put a solid brick in the further strengthening of the Georgian Economy.”

The growth into Poland and the first direct low-cost links from Georgia into the European Union is a major step. Wizz Air revealed in mid-February that it would introduce a twice weekly link to Warsaw from May 15, 2013 but has already brought the launch date forward to April 24, 2013 due to high demand. In the past few days it has confirmed the addition of Katowice to its Kutaisi network on a twice weekly basis from May 18, 2013 to meet the strong interest for Polish tourists travelling to Georgia.

"These announcements underpin Wizz Air's commitment to Georgia. Our landmark Warsaw - Kutaisi route brings Georgia closer to the European Union as Warsaw serves as a natural connecting point to Wizz Air's extensive network to Western Europe,” said John Stephenson, Executive Vice President, Wizz Air.

These will be the first direct air services between Kutaisi and Poland in at least four decades. In 2012 an estimated 31,000 bi-directional O&D passengers travelled between the two countries, up 35.9 per cent on the previous year. LOT Polish Airlines currently offers the only non-stop flight between the two countries with a link between Warsaw and Tbilisi.

In mid-February Wizz Air revealed that following the success of its Kiev route its Wizz Air Ukraine division would boost frequencies to a daily basis from April 1, 2013 and also introduce twice weekly services from Kutaisi to Dontesk from April 23, 2013 and a twice weekly link to Kharkiv from July 1, 2013. “With our eleven weekly flights to Kutaisi from Kiev, Donetsk and Kharkiv, Wizz Air is also making it easier and cheaper than ever to travel between Georgia and Ukraine. These three new routes will boost the economic development of the respective regions, contribute to the rise of tourism and create dozens of jobs," said Stephenson.

Although there is no direct competition from Kutaisi, others do already offer flights between these Georgian cities and Kiev. Ukraine International Airlines has recently inherited the Tbilisi - Kiev route from Aerosvit Airlines, while UTair Ukraine serves the Dontesk route from the Georgian capital and Georgian Airways has up until recently linked Tbilisi and Dontesk. Historical schedule data shows that in the past Dontesk and Kharkiv have both been linked directly to Kutaisi. The Dontesk route was served weekly by Georgian International Airlines between August and November 2009 using a Tupolev Tu-134, while Kharkiv was linked to Kutaisi on a weekly basis by the same airline from November 2009 until November 2011 using a Saab 340.

The expansion of Wizz Air in Kutaisi is not the only notable recent development in the Georgian market with the arrival of new carrier FlyGeorgia providing some additional stability to the troubled local market which has seen a host of airline failures through the years. The Independently-owned venture – owned by owned by Georgian and Iranian investors - launched operations in August last year with a single Airbus A319 but has now expanded its fleet to three aircraft following the arrival of a second A319 in November 2012 and a first A320 the subsequent month.

Since its inauguration, FlyGeorgia has been providing daily flights on the domestic route between Tbilisi and Batumi, and although it has been serving some international routes such as Amsterdam, Antalya, Hurghada, Sharm el Sheikh and Tehran, these were all flown on a charter basis due to local licencing restrictions from the Georgian CAA which restricts carriers with only a single aircraft from flying scheduled flights outside national borders.

The fleet growth now enables the carrier to expand its network coverage across Europe and the Commonwealth of Independent States (CIS). Scheduled flights to Amsterdam commenced in November 2012 and this has been followed by new links being introduced to Dubai and Tehran from January 2013. This is just the first stage of growth and in an exclusive interview with The HUB, the airline’s Chief Executive Officer, John Kohlsaat, revealed the carrier has ambitions to extend its network to serve up to 15 destinations during 2013 with the arrival of a fourth aircraft.

With a population of five million, FlyGeorgia has aspirations not only to serve the local O&D market of Georgia, but to provide connections through Tbilisi from Europe through to the Middle East, former CIS states and potentially Northern India. There are big plans to develop Tbilisi International Airport as a major regional hub and FlyGeorgia intends to play a major role in this. “The Georgian market has changed a lot over the past few years and requires enhanced air connectivity,” said Kohlsaat.

The airline is currently finalising its network plans and is seeking bilateral approvals to serve many of its preferred markets. A number of new destinations are high on its list. Locations in Germany, Kazakhstan, Israel, Iran, Iraq and Turkey are all possible growth options, while in the future markets such as India, Saudi Arabia, Greece, Spain, UK and Scandinavia could be served. “Europe will be a key growth market for us,” said Kohlsaat, identifying the strong trade between Europe’s Northern regions and the Middle East via Tbilisi, due to the Georgian diasporas in these areas. The airline also in the future expects to introduce a smaller aircraft type to the A319 and this will help support network growth on thin routes.

These are ambitious growth plans but as many of the markets are relatively thin, FlyGeorgia can serve the demand with lower frequency services and is understood to be looking at offering just two or three weekly rotations on some of its new routes. The hub plan at Tbilisi will help complement the point-to-point demand.

“The Georgian market has changed a lot over the past few years and requires enhanced air connectivity.  FlyGeorgia is Georgian airline which aims to connect Georgia with the world and the world with Georgia, to support the development of tourism, economic growth and popularisation of the country.”

John Kohlsaat
Chief Executive Officer, FlyGeorgia

FlyGeorgia offers a quality product, with a 12-seat Business Class cabin on its Airbus fleet and provides a full inflight service with complimentary meals. Tickets are distributed through its website and agents, but the carrier is looking to get access to the GDS and Kohlsaat acknowledges that as FlyGeorgia serves a number of diverse markets it therefore needs to use “different distribution techniques to access” potential customers.

“FlyGeorgia is Georgian airline which aims to connect Georgia with the world and the world with Georgia, to support the development of tourism, economic growth and popularization of the country,” said Kohlsaat. “Our chief priority is to deliver the highest quality service which shall satisfy the requirements of any customer and meet their expectations.”

There is plenty of opportunity to grow the aviation market in Georgia. Last year Tbilisi International Airport grew 15 per cent but total traffic is still relatively low at just 1.2 million. The airport is served by 20 carriers including Lufthansa, flydubai, Qatar Airways and Turkish Airlines. The latter is one of the key hub feeders and serves the market with 17 flights per week, a link that will grow in importance this year as Tbilisi is to lose its London link as a knock-on effect of last year’s merger between British Airways and bmi British Midland International.

FlyGeorgia currently has a 5.5 per cent share of the Georgian international market, a figure that is expected to rise rapidly with its network ambitions. The largest operator in the Georgian international market is currently Turkish Airlines, which held a 16.3 per cent share, but it is closely followed by Pegasus Airlines (14.5 per cent) and Georgian Airways (12.4 per cent). In the table below we highlight the top five O&D markets currently not served directly from Tbilisi.