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ARMENIAN "ARMAVIA" GOES BANKRUPT: FUTURE OF NATIONAL AIR TRAFFIC UNDER QUESTION
YEREVAN, April 2. /ARKA/. According to official information released
Thursday, Armenian national air company Armavia made a decision
to cease its flights as from April 1st 2013 and start a bankruptcy
procedure. For the second time an Armenian national air carrier goes
into bankruptcy: Armenian Airlines turned bankrupt in 2003.
Armavia is starting a bankruptcy process.
There has been a lot in mass media about Armavia's problems, its
big debts and that its license may be revoked. Now events take an
unexpected turn. Armavia's press service announced the company's
decision to cease the flights and start a bankruptcy process.
"Aviation is a field where you must not be satisfied with what you have
already achieved. During three years, owner of Armavia air company
kept investing money from his other businesses to support the air
carrier. But today the situation is that there is no possibility left
to continue like this. Hence, a decision is made to cease flying and
start a bankruptcy", says the report. The document also says that
the 2008 global economic crisis cause bankruptcy of many foreign
air companies, such as KUBAN, AEROSWIT, RED WINGS, AMERICAN AIRLINES
and others.
Debts and disputes over SuperJet
As early as in November 2012 reports said that owner of the company,
president of MIKA Limited and a major Armenian businessman Mikhail
Baghdasarov intended to sell its Armavia. The The main alleged reason
was the economic crisis and the losses suffered from maintenance of
the new Russian SuperJet.
Last year Armavia returned one of the two Sukhoi SuperJet 100 on order
to Sukhoi Civil Aircraft company: the reason given was the low quality
assembly. The second Sukhoi SuperJet 100 had not been supplied and
Baghdasarov said he had no debts to the jet manufacturing company.
But the Sukhoi Civil Aircraft said that Armavia had not paid some
4 million dollars for the first aircraft, that there is encumbrance
recorded against it in an Armenian bank that the air company could
not return the jet unless it exonerated the aircraft.
Baghdasarov retorted saying that if the manufacturer had a buyer they
would have exonerated the aircraft themselves since long ago.
Yet, according to Armenian mass media, Armavia owes not only to Sukhoi
Civil Aircaraft.
Haykakan Zhamanak newspaper says the company has not repaid its 22
million dollars loan from Bank VTB Armenia (taken for buying SuperJet
100) and has not paid overdue salaries to the staff.
Who is the buyer?
Armenian print media say Baghdasarov intends to sell the air company
at $50 million, but potential buyers are scared away because of the
huge debts of Armavia.
Late 2012 Baghdasarov told RBC daily that no Russian investors are
interested in the deal, but there are Italians and investors from
the East among potential buyers.
According to Armenian mass media, a major businessman and leader of
Prosperous Armenia party Gagik Tsarukyan showed the greatest interest
in purchasing Armavia, but, reportedly, the two businessmen failed
to come to an agreement.
According to mass media reports, negotiations are under way with two
foreign, an American and an Italian, companies.
Allegedly, during his meeting with Baghdasarov Tsarukyan tried to
convince him to first declare the company bankrupt and then sell it
to him, but the government said the overdue salaries should be paid
first (to avoid protests).
Press secretary of Tsarukyan Ivetta Tonoyan, in commenting
allegations, said that Gagik Tsarukyan has never had intentions to
buy Armavia. "This information has no basis in fact", she said.
After the bankruptcy...
A number of questions remain to be answered after Armavia announced
it will start a bankruptcy process, and the first one is who will be
operating the company's flights. The press service said the company
will cease its flights as from April 1, yet no single Armavia flight
was operated from Zvartnots on Friday March 29.
Will the company be sold or nationalized? For instance, Armenia's
Public Council suggests partly nationalizing Armavia.
"We believe that Armenia should have its national air carrier
registered in Armenia, with most of its staff being Armenians", head
of the Public Council Vazgen Manukyan told journalists. He also said
that partial (from 30 to 51%) nationalization of air companies is
quite common in many countries.
According to Manukyan, having a national air company is of strategic
importance to Armenia. "In case of a war, if we don't have our own
air company, flights from other places may be forbidden, and then we
will find ourselves in a full blockade", Manukyan said.
Apart from this, many people still remember the protests held by
employees of Armenian Airlines who were set adrift for long years in
fighting for their occupational disease compensations to be paid.
Let us hope the questions will be answered by the respectively agencies
in the near future and both the staff and the passengers of Armavia
will then know what to expect.
Hayk Khalatyan, reporter of ARKA Agency
The author's opinion does not necessarily reflect the opinion of the
editorial office.
YEREVAN, April 2. /ARKA/. According to official information released
Thursday, Armenian national air company Armavia made a decision
to cease its flights as from April 1st 2013 and start a bankruptcy
procedure. For the second time an Armenian national air carrier goes
into bankruptcy: Armenian Airlines turned bankrupt in 2003.
Armavia is starting a bankruptcy process.
There has been a lot in mass media about Armavia's problems, its
big debts and that its license may be revoked. Now events take an
unexpected turn. Armavia's press service announced the company's
decision to cease the flights and start a bankruptcy process.
"Aviation is a field where you must not be satisfied with what you have
already achieved. During three years, owner of Armavia air company
kept investing money from his other businesses to support the air
carrier. But today the situation is that there is no possibility left
to continue like this. Hence, a decision is made to cease flying and
start a bankruptcy", says the report. The document also says that
the 2008 global economic crisis cause bankruptcy of many foreign
air companies, such as KUBAN, AEROSWIT, RED WINGS, AMERICAN AIRLINES
and others.
Debts and disputes over SuperJet
As early as in November 2012 reports said that owner of the company,
president of MIKA Limited and a major Armenian businessman Mikhail
Baghdasarov intended to sell its Armavia. The The main alleged reason
was the economic crisis and the losses suffered from maintenance of
the new Russian SuperJet.
Last year Armavia returned one of the two Sukhoi SuperJet 100 on order
to Sukhoi Civil Aircraft company: the reason given was the low quality
assembly. The second Sukhoi SuperJet 100 had not been supplied and
Baghdasarov said he had no debts to the jet manufacturing company.
But the Sukhoi Civil Aircraft said that Armavia had not paid some
4 million dollars for the first aircraft, that there is encumbrance
recorded against it in an Armenian bank that the air company could
not return the jet unless it exonerated the aircraft.
Baghdasarov retorted saying that if the manufacturer had a buyer they
would have exonerated the aircraft themselves since long ago.
Yet, according to Armenian mass media, Armavia owes not only to Sukhoi
Civil Aircaraft.
Haykakan Zhamanak newspaper says the company has not repaid its 22
million dollars loan from Bank VTB Armenia (taken for buying SuperJet
100) and has not paid overdue salaries to the staff.
Who is the buyer?
Armenian print media say Baghdasarov intends to sell the air company
at $50 million, but potential buyers are scared away because of the
huge debts of Armavia.
Late 2012 Baghdasarov told RBC daily that no Russian investors are
interested in the deal, but there are Italians and investors from
the East among potential buyers.
According to Armenian mass media, a major businessman and leader of
Prosperous Armenia party Gagik Tsarukyan showed the greatest interest
in purchasing Armavia, but, reportedly, the two businessmen failed
to come to an agreement.
According to mass media reports, negotiations are under way with two
foreign, an American and an Italian, companies.
Allegedly, during his meeting with Baghdasarov Tsarukyan tried to
convince him to first declare the company bankrupt and then sell it
to him, but the government said the overdue salaries should be paid
first (to avoid protests).
Press secretary of Tsarukyan Ivetta Tonoyan, in commenting
allegations, said that Gagik Tsarukyan has never had intentions to
buy Armavia. "This information has no basis in fact", she said.
After the bankruptcy...
A number of questions remain to be answered after Armavia announced
it will start a bankruptcy process, and the first one is who will be
operating the company's flights. The press service said the company
will cease its flights as from April 1, yet no single Armavia flight
was operated from Zvartnots on Friday March 29.
Will the company be sold or nationalized? For instance, Armenia's
Public Council suggests partly nationalizing Armavia.
"We believe that Armenia should have its national air carrier
registered in Armenia, with most of its staff being Armenians", head
of the Public Council Vazgen Manukyan told journalists. He also said
that partial (from 30 to 51%) nationalization of air companies is
quite common in many countries.
According to Manukyan, having a national air company is of strategic
importance to Armenia. "In case of a war, if we don't have our own
air company, flights from other places may be forbidden, and then we
will find ourselves in a full blockade", Manukyan said.
Apart from this, many people still remember the protests held by
employees of Armenian Airlines who were set adrift for long years in
fighting for their occupational disease compensations to be paid.
Let us hope the questions will be answered by the respectively agencies
in the near future and both the staff and the passengers of Armavia
will then know what to expect.
Hayk Khalatyan, reporter of ARKA Agency
The author's opinion does not necessarily reflect the opinion of the
editorial office.