The company, Fly Arna, was set up by the United Arab Emirates-based carrier Air Arabia and the Armenian National Interests Fund (ANIF), a state agency, in July 2021 a year before launching inaugural flights to a limited number of foreign destinations. It is equally co-owned by Air Arabia and ANIF, with each of them having invested 4.4 billion drams ($11 million) in its operations.
Armenian officials said at the time that Fly Arna will become the country’s leading domestic airline. The then ANIF director predicted that it will have a fleet of 15 aircraft.
Fly Arna leased only two passenger jets, however, despite hiring and training over 120 people. One of those planes was removed from Armenia’s civil aircraft register and reportedly moved to India late last year in a sign of serious financial issues facing the carrier.
Fly Arna halted all of its flights on January 16, saying that it is going through “operational changes” and hopes to resume its service “as soon as possible.” It appears to have also lost its sole remaining plane.
Under Armenian civil aviation regulations, airlines lacking any aircraft must have their licenses suspended for six months.
“As things stand now, the [Fly Arna] license is suspended,” Deputy Minister of Territorial Administration and Infrastructures Arsen Simonian told the Armenian parliament on Tuesday. He said the license will be revoked altogether if the company fails to acquire at least one plane within six months.
“The matter is being examined and we will inform you if there is clarity. The problem is mainly financial,” he said without giving details.
The Armenian government is facing growing calls to explain why Fly Arna has found itself on the brink of collapse despite substantial public funds injected into it.
Armenia has had no large domestic airlines ever since the state-backed Armavia carrier went bankrupt in 2013. The bankruptcy led the then Armenian government to liberalize the country’s aviation sector.