UKRAINE One of the reasons for Russia’s financial problems has been the sanctions imposed by Western nations because of the conflict in eastern Ukraine. This has also had a dire economic effect on Ukraine itself, although there are green shoots of recovery as well. After two years of recession, Ukraine finally returned to growth with GDP up by
One reason for optimism is a resurgence
in the aviation sector, particularly with low-cost carriers such as Ryanair and Wizz Air making major moves in the Ukrainian market this year. Ryanair is introducing flights from both
the capital Kiev and Lviv in western Ukraine for winter 2017/18. The Irish carrier will serve four routes from Kiev including
“The arrival of Ryanair in Ukraine is, without exaggeration, a remarkable event for Ukraine”
2.3 per cent in 2016, helped by a “bumper” agriculture harvest, according to the International Monetary Fund (IMF), which is predicting further growth of around 2 per cent in 2017, which should increase further in the following two years. However, the IMF warns that this recovery could be threatened by “an escalation of the conflict” in the country’s eastern regions.
Eastern Europe: regional growth While the economies of
Russia and Ukraine are slowly improving, the rest of eastern Europe has enjoyed relatively robust economic growth in recent years
According to the IMF, the Central and Eastern Europe region (Czech Republic, Hungary, Poland, Slovakia and Slovenia) is collectively set to enjoy GDP growth of 3.2 per cent in 2017, while the three Baltic states (Estonia, Latvia and Lithuania) are on course to increase GDP by 2.8 per cent this year. GDP growth is projected to be even stronger for the region encompassing Bulgaria, Croatia and Romania at 3.7 per cent.
But does economic growth always translate into increased business travel within these regions and countries? Not necessarily, says Pavel Namec, managing director of HRG Czech Republic and Slovakia, who adds: “The economic
86 BBT July/August 2017
Stansted and Manchester, while Stansted is also among the seven European destinations from Lviv.
Ukraine’s infrastructure minister
Volodymyr Omelyan says: “The arrival of Ryanair in Ukraine is, without exaggeration, a remarkable event for Ukraine. Negotiations lasted for several years and I am proud that our team was able to successfully hold them.
I am convinced Ryanair will be another bridge that connects the infrastructure of Ukraine with Europe and it will be a good signal for the world’s major investors.” Meanwhile, Budapest-based Wizz Air has
also increased its operations in Ukraine with the opening of its second base in the country at Lviv for this summer and deciding to base a second aircraft at Kiev from August. In another positive move, local carrier Ukraine International has increased capacity on routes from Kiev to key European cities such as Amsterdam, Madrid, Paris, Milan and Rome this summer. It has also added a service from Kiev to Budapest. This expansion has encouraged airline
data firm OAG to declare Kiev as one of three destinations in eastern Europe to watch for potential major traffic growth during the next few years – alongside the Bulgarian capital Sofia and Warsaw in Poland.
growth looks good but it isn’t being reflected generally in business travel. “There are many clients who travel a lot as their business is growing, but there are also clients with continued travel bans, mainly on internal travel or a trip which isn’t on real business or chargeable to a project.” The picture looks more rosy for Poland, which is set for GDP growth of 3.4 per cent in 2017 and has been named as one of the top five future growth markets for business travel by the GBTA, alongside Indonesia, Malaysia, Mexico and Turkey.
Poland has been benefiting
from a major expansion in air services over recent years with passenger traffic expected to rise by another 11 per cent this year – driven primarily by the expansion of low-cost carriers. Even Brexit could end up
having a positive impact on Poland’s business travel, according to Katarzyna
Warsaw, Poland: Could Brexit bring benefits?
Hryniewicz, managing director of HRG Poland, although she admits it is “too early” in the process to make firm predictions.
“But I expect that it will bring positive results to Poland,” she says. “Poland is a great place for UK firms
wanting a European base – we have a growing economy, population and easy access to highly-skilled staff who are well educated, capable young people eager to work hard and a relatively low-cost of workforce. We seem to be a great place to invest.”
BUYINGBUSINESSTRAVEL.COM
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