Benchmarking Zvartnots airport passenger fees shows that EVN has one of the highest fees in the region.

1. Sep 16, 2018
Armen Mkrtchyan
Email: armen@sloan.mit.edu
Benchmarking and estimating impact of Zvartnots (EVN) airport’s passenger fees
Opinions expressed are solely my own and do not express the views or opinions of any organization

2. Zvartnots (EVN) has one of the highest airport (departure) fees
per passenger in the region
46.6
52.5
35.7
28.3
16.4 15.0 12.3
Baku
(GYD)
Vienna
(VIE)
Tbilisi
(TBS)
Warsaw
(WAW)
Moscow
(SVO)
Istanbul
(IST)
Yerevan
(EVN)
-18.30
Airport (departure) fees1, $ Airport (departure) fees1, $
25.6
21.0
24.0
Yerevan
(EVN)
Tbilisi
(TBS)
46.6
28.3
4.3
-18.30
Service charge Security fee
▪ Zvartnots airport has one of the highest fees per passenger
▪ This is mainly driven by the security fee that Zvartnots charges at $25.6 or ~12,000 AMD
▪ Tbilisi airport’s security fee is 6x lower at $4.3 or 2,000 AMD, resulting in much lower departure fee of $28.3
1. Departure fees are based on one-way travel fees from all above airports to Frankfurt, Germany, assessed for Oct 1st 2018 using United Airlines website.
Sep 15, 2018 | Armen Mkrtchyan (armen@sloan.mit.edu)
Note: Opinions expressed are solely my own and do not express the views or opinions of any organization

3. Zvartnots airport’s passenger revenue1 exceeded that of Tbilisi
airport, despite 40% lower passenger traffic
Number of departing
passengers2, million
Per passenger fee
charged by airport
Total airport revenue
(passenger only)
Yerevan
(EVN)
Tbilisi
(TBS)
Baku
(GYD)
$58
million
$50
million
$107
million
1.25
1.75
2.03
$46.6
$28.3
$52.5
1. Only passenger revenues paid by airlines are considered. Other sources of revenue, such as refueling, maintenance, selling of services to passengers on the ground are not considered
▪ While Tbilisi
airport had 40%
more passenger
traffic, it gene-
rated $8M less
revenue from
passenger fees in
2017
▪ However, overall
positive economic
impact of larger
number of
passengers can
be significant
Sep 15, 2018 | Armen Mkrtchyan (armen@sloan.mit.edu)
֏28 billion
֏24 billion
֏52 billion
2. 2017 totals were used
Note: Opinions expressed are solely my own and do not express the views or opinions of any organization

4. Matching Tbilisi airport’s passenger fees can increase number of visitors
to Armenia by ~25,000 and GDP by 14 billion AMD
1. IATA Air Travel Demand, Economics Briefing No 9; Assumes that the full amount of reduction in taxes and fees are passed on to the passengers
Sep 15, 2018 | Armen Mkrtchyan (armen@sloan.mit.edu)
490,000
Price-sensitive
passengers
▪ Number of passengers visiting
Armenia for leisure in 2017
▪ Does not include business
travelers and 90% of visits by
diaspora Armenians (assuming
they would visit despite higher
fees)
▪ Includes only travelers arriving /
departing Armenia through
Zvartnots
515,000
Expected number of
passengers after
airfare reduction
▪ Calculated number of passengers
if average airfare is lowered by
$18.3 (9,000 AMD)
▪ Price elasticity of demand is
assumed to be -0.8, based on long-
haul EU average1
▪ Average round-trip airfare is
assumed to be $300
▪ Each passenger on average
contributes $1,130 (550,000 AMD)
to the GDP, including direct and
indirect impact
▪ Based on 2018 World Travel
and Tourism Council report on
Armenia
֏14 billion
Expected increase
in GDP from
increased air traffic
Rationale
Note: Opinions expressed are solely my own and do not express the views or opinions of any organization