Georgia’s Locked Skies

In an era of global communications, Georgia becomes a country which is hard to leave and, indeed, hard to arrive to.

Georgian parliament has locked the skies for two major international airlines: British Mediterranean Airways and Turkish Airlines. While Georgians and expatriates scramble to rearrange their plans to arrive to the major hubs of London and Istanbul, company executives make their last attempt to untangle the legal mess.

On April 1 Chief Executive of British Mediterranean Airways, Des Hetherington arrived in Tbilisi to settle his company’s disputes with the Georgian authorities. 

Before March 30 the British Mediterranean Airways, a franchise partner of the British Airways, was operating three flights a week between London and Tbilisi. However, by a decision of the Georgian Civil Aviation Administration the flights will be limited to two a week before April 15, after which the company’s flight rights will be terminated. Turkish Airlines is in a similar situation.

“This decision has been forced upon us by the Aeronautical Authorities in Georgia and I deeply regret this decision.  The six years that we have operated scheduled air services between London and Tbilisi have seen a growth in the amount of air travel to and from Georgia and I am sorry that this important link is under threat,” Des Hetherington says.

Mayor of the City of London Alderman Gavyn Arthur also expressed his concern with the situation during his recent visit to Georgia. “Problems with the British Airways are a serious setback in partnership between the two countries,” Alderman Gavyn Arthur said on March 25 briefing.

The decision of the Civil Aviation Administration builds on the Parliamentary decision of February 27, which instructed the Administration to “suspend the temporary flight licenses [for the British Mediterranean and Turkish Airlines].”

MPs explain that an “Air Transportation Agreement” was signed with Turkey in 1992. Similar agreement with Great Britain, has been finalized by the foreign ministries, but was not signed. None of these documents were submitted for the parliamentary ratification to legally enter into force. Thus the decision says, “tax breaks, enjoyed by the British and Turkish air companies lack legal grounds”.

Also, as the Civil Aviation Department explains, according to the October 9, 1999 decree of the President of Georgia, when a foreign company operates the air route not occupied by any Georgian company, it has to compensate to the Georgian flagship carrier.

The Parliamentary decision of February 27, calls upon the government to straighten both of these issues: firstly to submit Agreements with both Turkey and Great Britain for ratification, and, secondly, to bring the agreements into conformity with the presidential decree (or to annul the decree).

Parliament’s decision reads current circumstances have seriously “hindered development of the national air companies…and cause significant losses to the country’s budget”.

“The companies will not be able to resume the flights until we clarify the situation and determine a legal basis, according to which these companies have operated in Georgia,” Zviad Mukbaniani, chairman of the Parliament’s Foreign Relations Committee, told Civil Georgia.

“If the issue is solved positively, followed with issuance of all necessary documents, licenses of the companies will be resumed without delay. This is all we can do,” Zurab Chankotadze, chairman of the Civil Aviation Administration, told Civil Georgia.

The Parliament also instructed the Finance Ministry to recover the unpaid taxes of the British and Turkish air companies after their entry to Georgia in 1997 and 1992 respectively.

Announcement regarding the tax debts of the two companies was made by the Chairman of the Tax Department of the Ministry of Finances Iase Zautashvili at the March 26 Government Meeting. According to him the British Airways, which operates in Georgia since 1997, owes the country 13 million Lari (approximately USD 6,1 million) and Turkish Airlines, operating in Georgia since 1992 – 17 million Lari (approximately USD 8 million).

However, the British Airways Tbilisi office claims that the “company was fulfilling its tax liabilities completely”. Representatives of the Turkish Airlines were unreachable to comment.

The Georgian government has only two weeks to regulate legal base of relations with the two companies. “If the issue will not be solved before April 15 and the Georgian government does not resume our license, we’ll have to stop our services,” Spokesperson for the British Airways Tbilisi Office Tamuna Shanidze told Civil Georgia.

Chairman of the Civil Aviation Administration Zurab Chankotadze could not specify which companies would replace British Airways and Turkish Airlines in case the Georgian authorities refuse to prolong their licenses.

While the parliamentary decision seems to have some legal credence, observers say the reason behind unexpected parliamentary decision was successful lobbying on behalf of the Georgian carriers.

Georgian airline business has been an arena of cutthroat competition recently. Unidentified gunman murdered Kakhi Asatiani, head of the main Georgian airline Airzena in November 2002. Members of Asatiani family have pointed their finger at a competing group with links to the president’s family and an influential oligarch Badri Patarkatsishvili, who showed willingness to revamp the crisis-ridden Georgian Airlines and move into cargo transportation market.

The authorities have provided no conclusive information on any of these claims, leaving the field wide open for the rumors.

What is clear for now, Georgian skies are not welcoming the major international carriers, undermining the credibility of the country which has as its official policy to become a transit route between Asia and Europe. More importantly, the clout of legal barriers and under-the-carpet fight between shadowy clans makes it very difficult for Georgians and foreign citizens to collaborate, do business and study each other’s countries.

By Tea Gularidze, Jaba Devdariani, Civil Georgia