Leading Airlines Pull out from Georgia

Despite burdensome two-week long negotiations with the Georgian authorities, representatives of the Turkish Airlines and the British Mediterranean Airways failed to resolve dispute with the Georgian side and terminate their flights to Georgia from April 15.

The Georgian side explains cancellation of the flight license to the British and Turkish companies with unpaid taxes, inadequate legal basis and unsolved disputes with the Georgian flagship company Airzena.

“The flight license will not be reissued until all problems are solved,” Zurab Chankotadze, head of the Georgian Civil Aviation Administration told Civil Georgia.

On April 10-11, the Turkish Airlines delegation held talks with the Airzena and the head of the Civil Aviation Administration.

Head of the international relations division of the Turkish Airlines Mine Epuksel said that Airzena rejected proposals of the Turkish side regarding joint flights to 76 countries through Istanbul. Besides, the Turkish Airlines demanded three flights a week between Tbilisi and Istanbul.

“We were ready to sign an agreement with Airzena, if they would give us the same frequency of flights as before [three a week], but they went against,” Epuksel said.

“Suggestions of the Turkish side were unacceptable for us. They wanted to maintain the same frequency of three flights a week, while offering us only one flight a week,” Tea Gabedaze, head of the PR office of the Airzena told Civil Georgia on April 14. Airzena proposes Turkish company to conduct two flights a week to Turkey.

The Georgian company has similar requests to the British Mediterranean Airways, which is the franchise partner to the British Airways company. But situation in this case is much more complicated, as Turkish Airlines has already paid to Airzena 3 million dollars in compensation to unilateral usage of the Tbilisi-Istanbul route, while British Mediterranean Airways has never paid royalties to the Georgian flagship company.

According to the 1999 decree of the President of Georgia, in case of unilateral outbound flights a foreign air company should pay the Georgian flagship company a share of the ticket sales as compensation.

The Georgian government also has financial claims towards the Turkish and British companies, as the Georgian Tax Department accuses both of tax evasion.

The Tax Department informs that the Turkish and British companies owe the Georgian budget 17 (USD 7.8 million) and 13 million Lari (USD 5.9 million) respectively.

The Georgian side claims that the 1992 Georgian-Turkish agreement, which considers tax privileges for Turkish Airlines, has not been ratified, while the British side does not have the same kind of agreement with Georgian at all. Neither of the companies recognizes the outstanding liability to the Georgian government.

When approached by Civil Georgia, neither Airzena nor the Civil Aviation Administration could name a company, to take on flights to Istanbul and London instead of Turkish Airlines and British Mediterranean Airways.

By Tea Gularidze, Civil Georgia

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