China’s MyWay Airlines Flies Into Turbulence In Georgia

Georgia’s Civil Aviation Agency has cancelled the operating licence of the Chinese financed MyWay Airlines because it said that it was no longer Georgian majority owned or controlled, and therefore in breach of its national aviation regulations.

Airlines operating in Georgia state that airlines must be majority owned by a Georgian citizen and be practically controlled by a Georgian national.

MyWay Airlines started flying in 2018 and is considered to be a lowcost aviation link between China and Europe with transits through Tblisi.

During a meeting with Georgian prime minister, Giorgi Kvirikashvili, the Chinese firm’s president, Mi Hua, stated the group was planning to open flights to Europe and Asia from its base at Tbilisi with North America a long-term goal. On 26 February 2018, the airline received its air operator’s certificate (AOC) with plans to begin operations in May 2018. On 3 April 2018, the airline made its first flight from Tbilisi to Tehran hosting media representatives, tour operators operating in the Georgian market and representatives of public agencies. Flights between Tbilisi and Tel Aviv began on 28 June 2018.

Georgia’s CAA said that in August this year, a 40% stake in MyWay was sold to an unnamed foreign nation who, after the deal, then owned 89% of the company. After it began an investigation into MyWay’s ownership, Georgia’s aviation authorities said that the company fudged the ownership by transferring stakes back to a Georgian citizen, although the foreign party actually retained operational control of the airline.

MyWay Airlines, which was set up in 2018 by China’s Hualing Group, has responded by suing the Georgian Civil Aviation Agency and appealing to Georgian PM Irakli Garibashvili to intervene. It said that without the PM’s intervention it will be forced into bankruptcy. In a statement on its Facebook page, MyWay Airlines said that it would lose US$100,000 every day that it couldn’t fly and that 120 jobs are at risk. “The company also pays various aviation taxes and is one of the most important payers in the state budget in aviation,” it said.

The row centres on the Georgian Civil Aviation Agency’s interpretation of ownership rules. Foreign ownership in other countries is not always fully understood by Chinese investors whose initial forays into Joint Ventures occasionally assume that all countries follow Chinese regulations, and do not always engage the correct counsel. Competitors with better political, legal, and business connections can also start to create mischief if they notice a foreign – in this case Chinese – investor successfully open new revenue streams and seek to have them eliminated from the market.

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