MFA ENTHUSIASTIC ABOUT ISTANBUL-YEREVAN

UNCLAS SECTION 01 OF 02 YEREVAN 000165

SIPDIS

DEPT FOR EUR/CACEN, EUR/ACE, DRL
EUR/CACEN FOR EUGENIA SIDEREAS AND MARGARET PAWLICK

SENSITIVE

E.O. 12958: N/A
TAGS: PREL PHUM TU AM
SUBJECT: MFA ENTHUSIASTIC ABOUT ISTANBUL-YEREVAN
FLIGHTS

REF: 03 ISTANBUL 1847


1. (U) Sensitive But Unclassified. Please treat
accordingly.

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SUMMARY
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2. (SBU) MFA officials told us recently that they
consider the weekly Yerevan-Istanbul flights an
important part of efforts to improve relations
between the two countries. MFA Turkey Desk Officer
Anahit Harutunyan said the MFA is "more than a
little enthusiastic" about this and future travel
routes with Turkey, including new charter flights
operated by Tower Aviation. Post research revealed
that local travel agencies are aware of the Tower
Aviation flights, but Armavia's well-established
marketing strategy gives it a clear advantage in the
Armenian market. End summary.

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MFA ENTHUSIASTIC ABOUT ISTANBUL-YEREVAN FLIGHTS
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3. (SBU) MFA officials told us recently that weekly
Yerevan-Istanbul flights are an important part of
efforts to improve relations between the two
countries. MFA Turkey Desk Officer Anahit
Harutunyan conveyed the MFA's enthusiasm about the
popularity and commercial viability of these
flights. She pointed to their success as an
indication of things to come once the Turkish-
Armenian border is opened and other travel routes
are established. Harutunyan said the MFA was
watching the newly established Tower Aviation
flights with great interest (reftel). She said she
was aware of marketing obstacles Tower Aviation had
experienced from the Armenian side while starting up
its operations. MFA Middle East Department Head
Karen Mirzoyan confirmed the GOAM's position that
more flights were good for the local economy and
evolving bilateral relations and therefore had full
MFA support.

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ARMAVIA'S MARKETING GIVES IT AN ADVANTAGE
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4. (U) Despite the existence of two travel options
to Istanbul from Armenia, Armavia Airways appears to
maintain a strong hold on the local market through
well-established marketing ties with travel
agencies. (Note: Russian SibAir owns 70 percent of
Armavia while a local Armenian investor owns the
remaining 30 percent. Armavia operates slightly
more than half of the international flights
departing Yerevan, followed by Aeroflot, British and
Austrian Airlines. End note.) Post research
revealed that local travel agents were aware of
Tower Aviation's route to Istanbul from Yerevan but
were more comfortable with booking tickets on
Armavia. Travel agents said they would be more
willing to use Tower Aviation once it demonstrated a
reliable track record and offered promotional
materials and specials similar to Armavia's. There
did not appear to be overt systemic obstacles to
purchasing a Tower Aviation ticket from Armenia.
One travel agent reported a technical "glitch,"
however, that made reservations on Tower Aviation
more labor-intensive since Tower Aviation listed
itself as a charter and not regular commercial
airline.

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A SNAPSHOT OF PEOPLE-TO-PEOPLE CONNECTIONS
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5. (SBU) Customers aboard the Yerevan-Istanbul
flights are mostly Armenian "suitcase traders" who
purchase goods in Turkey for resale in Armenia
(reftel). An informal survey by Post of one of the
flights in mid-December 2003 revealed that 60
percent of travelers were textile merchants while 30
percent operated small household electronics or
novelty businesses. The remaining travelers were
executives or Turkish-Armenians visiting family in
either country. Only a handful of travelers were
Turkish citizens returning from Yerevan. The
majority of business travelers did not speak Turkish
but claimed it did not hamper their ability to
operate in Turkey. They claimed that Turkish-
Armenian friends or relatives often serve as
translators for Armenians during these buying trips.
According to one Armenian traveler, anti-Armenian
discrimination did not pose a problem while in
Turkey "unless conversation changes to politics or
history." "We make better business partners than
friends," he told Poloff.

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COMMENT
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6. (SBU) Flights between Yerevan and Istanbul
provide the most consistent examples of successful
Armenian-Turkish linkages at the grassroots level.
FM Oskanian reportedly points to these flights
during meetings with Turkish FM Gul as proof that
open borders between the two countries will bring
commercial success. The MFA, while aware of
important Armenian business interests in Armavia,
appears more interested in increasing travel routes
between the two countries than in protecting any
single business interest. Tower Aviation's
obstacles in getting off the ground in Armenia
appear more directly related to marketing problems
than systemic pressure from the GOAM. End comment.


7. (U) This cable has been coordinated with Embassy
Ankara.
ORDWAY