Tweet
ARMAVIA AGONY: BANKRUPT AIRLINE FACES PROTESTS FROM PLANE TICKET HOLDERS, LAID OFF STAFF
http://armenianow.com/economy/business/45008/armenia_armavia_bankruptcy_national_air_carrier
BUSINESS | 04.04.13 | 15:36
Photolure
The bankruptcy of Armenia's national air carrier, Armavia, has left
about 400 staff without jobs, and ticket holders without a means
of travel.
In a statement last week Armavia said that for three years its owners
have had to sustain the airline using means from other businesses they
run. It said the situation could not last any longer and declared the
start of a bankruptcy procedure with the termination of all flights.
Armavia, owned by tycoon Mikhail Baghdasarov, has been struggling for
more than a year and has been in recurrent disputes with Yerevan's
international airport, Zvartnots, and air navigators over outstanding
debts for services that often resulted in delays and cancellations
of flights causing inconveniences for passengers.
Vazgen Manukyan, the chairman of the Public Council, a
president-appointed advisory body, met with the airline's pilots on
Wednesday to hear their complaints and concerns regarding the future
of the company and themselves.
Manukyan suggested holding a broad discussion regarding the situation,
with all parties taking part in it.
Hundreds of citizens who purchased Armavia tickets before April 1 have
not yet been able to get compensation for them. They gathered at one
of the airline's offices in Yerevan on Monday demanding that their
tickets be replaced by those of flying airlines or money be returned.
The office, however, was closed and the people had to continue their
protest near the government building from where they got the promise
that their problems would be solved.
Later, the ticketholders also presented their complaints to the
Ombudsman's office, which, too, said it was dealing with the matter.
Armavia told ArmeniaNow that they have sold tickets up until October
26 and at this moment the bankrupt airline's commercial department
is devising a scheme for all ticket holders to get compensation and
for all booked tickets to be canceled.
Armavia was established a decade ago on the ruins of a state-run
company, Armenian Airlines, which went bankrupt in 2002. Under an
agreement with the government Armavia in fact enjoyed a monopolistic
position on some destinations. Still, critics often accused the
airline of abusing its de facto monopoly, which often resulted
in disproportionately high ticket prices and inadequate quality
of service.
According to management expert Harutyun Mesropyan, it was a wrong
decision from the very beginning to give such a strategic sphere to
a private company.
"The state informally has distanced itself from this situation. A
serious state does not act like that," the expert told ArmeniaNow.
Mesropyan said this bankruptcy, perhaps, would be used to clear the
debts in the aviation sphere, as, according to him, such a sphere
cannot always be under the burden of increasing debts.
Mesropyan said it is the lack of management professionals that must
have led to this situation with Armavia.
"Our country is in a semi-blockade and an air link is vital to us. And
here we see incompetent management and lack of development strategy,"
said the expert.
Head of the National Assembly's Finance and Budget Committee,
Republican MP Gagik Minasyan said at a press conference on Wednesday
that what happened to Armavia wasn't something unexpected, because
a number of other international airlines have found themselves in
the same situation after being unable to overcome the consequences
of the 2009 global economic crisis.
"We should expect the new company replacing Armavia to have a greater
potential and safety cushions to be able to stay in business despite
global shocks," said Minasyan.
While the national air carrier is trying to clear its internal mess,
the Armenia International Airports company has found its way of
resolving the issue by adding flights of other international airlines.
On Wednesday the company issued a statement announcing that it has
reached agreement with three airlines about increasing the number of
flights. It said discussions were underway with other airlines as well.
http://armenianow.com/economy/business/45008/armenia_armavia_bankruptcy_national_air_carrier
BUSINESS | 04.04.13 | 15:36
Photolure
The bankruptcy of Armenia's national air carrier, Armavia, has left
about 400 staff without jobs, and ticket holders without a means
of travel.
In a statement last week Armavia said that for three years its owners
have had to sustain the airline using means from other businesses they
run. It said the situation could not last any longer and declared the
start of a bankruptcy procedure with the termination of all flights.
Armavia, owned by tycoon Mikhail Baghdasarov, has been struggling for
more than a year and has been in recurrent disputes with Yerevan's
international airport, Zvartnots, and air navigators over outstanding
debts for services that often resulted in delays and cancellations
of flights causing inconveniences for passengers.
Vazgen Manukyan, the chairman of the Public Council, a
president-appointed advisory body, met with the airline's pilots on
Wednesday to hear their complaints and concerns regarding the future
of the company and themselves.
Manukyan suggested holding a broad discussion regarding the situation,
with all parties taking part in it.
Hundreds of citizens who purchased Armavia tickets before April 1 have
not yet been able to get compensation for them. They gathered at one
of the airline's offices in Yerevan on Monday demanding that their
tickets be replaced by those of flying airlines or money be returned.
The office, however, was closed and the people had to continue their
protest near the government building from where they got the promise
that their problems would be solved.
Later, the ticketholders also presented their complaints to the
Ombudsman's office, which, too, said it was dealing with the matter.
Armavia told ArmeniaNow that they have sold tickets up until October
26 and at this moment the bankrupt airline's commercial department
is devising a scheme for all ticket holders to get compensation and
for all booked tickets to be canceled.
Armavia was established a decade ago on the ruins of a state-run
company, Armenian Airlines, which went bankrupt in 2002. Under an
agreement with the government Armavia in fact enjoyed a monopolistic
position on some destinations. Still, critics often accused the
airline of abusing its de facto monopoly, which often resulted
in disproportionately high ticket prices and inadequate quality
of service.
According to management expert Harutyun Mesropyan, it was a wrong
decision from the very beginning to give such a strategic sphere to
a private company.
"The state informally has distanced itself from this situation. A
serious state does not act like that," the expert told ArmeniaNow.
Mesropyan said this bankruptcy, perhaps, would be used to clear the
debts in the aviation sphere, as, according to him, such a sphere
cannot always be under the burden of increasing debts.
Mesropyan said it is the lack of management professionals that must
have led to this situation with Armavia.
"Our country is in a semi-blockade and an air link is vital to us. And
here we see incompetent management and lack of development strategy,"
said the expert.
Head of the National Assembly's Finance and Budget Committee,
Republican MP Gagik Minasyan said at a press conference on Wednesday
that what happened to Armavia wasn't something unexpected, because
a number of other international airlines have found themselves in
the same situation after being unable to overcome the consequences
of the 2009 global economic crisis.
"We should expect the new company replacing Armavia to have a greater
potential and safety cushions to be able to stay in business despite
global shocks," said Minasyan.
While the national air carrier is trying to clear its internal mess,
the Armenia International Airports company has found its way of
resolving the issue by adding flights of other international airlines.
On Wednesday the company issued a statement announcing that it has
reached agreement with three airlines about increasing the number of
flights. It said discussions were underway with other airlines as well.