At Present, Kapan Airport Serves Only Domestic Flights to and from Yerevan

In order to grant international status to Kapan’s “Syunik” Airport, the Ministry of Territorial
Administration and Infrastructure of the Republic of Armenia will begin discussions with the
airport’s shareholders.

This was stated in response to a request to comment on the plans
voiced at the Armenian Government session on January 22. At that session, the
Government approved amendments to the concession agreement on Armenia’s
international airports with “Corporacion America,” a company owned by the family of
Argentine-Armenian billionaire Eduardo Ernekian.

At present, Kapan Airport serves only domestic flights to Yerevan and in the opposite direction.
The department reported that plans regarding the airport’s international status are at a
very early stage, and that working discussions with the airport’s shareholders have not yet
begun. Therefore, there is currently no clear understanding of how much additional
investment would be required for border control, runways, and other components, nor
when such investments could be implemented.

Previously, under the contract, “Corporacion America” had a preferential right to extend the
concession to any new international airport located within a 250 km radius of “Zvartnots.” It
should be noted that, since this radius is measured as a straight-line distance by air, it
effectively covers almost the entire territory of the country. For this reason, from the outset
in 2001 the concessionaire assumed the management of Yerevan’s “Zvartnots” Airport,
and in 2007 also Gyumri’s “Shirak” Airport.

With the latest amendments to the concession agreement, this provision has been
repealed. According to the Ministry, this was done to make it possible to designate Kapan
Airport as an international airport (or at least to initiate discussions to that end) without
transferring it to the concessionaire.

It should be recalled that the shareholders of “Syunik Airport” LLC are the Zangezur
Copper-Molybdenum Combine and the “Syunik Region Development Foundation”
established by the Government.