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Did Siberia Develop Armavia, and Did Baghdasarov Ruin It?
April 5 2013
Already former employees of the air company think so While analyzing
the reasons for the `collapse' of the air company Armavia, a set of
experts in the field of aviation, expressed an idea that the owner of
the company, Mikhail Baghdasarov, and his careless attitude and
incorrect marketing were mostly to blame for all that. According to
people familiar with the field, before the majority of Armavia's
shares passed on to Baghdasarov, this company had prospered, and even
after the bankruptcy of the Armenian Airlines and society's
disappointment, Armavia won trust. In 1996, when Armavia whose
shareholders included also Mikhail Baghdasarov was established, the
name of the company was known to few people. According to our
interlocutors, it became famous when the second largest Russian air
company, Siberia, gained 70% of Armavia's shares in 2011. That air
company also took over all the air routes of the Armenian Airlines
that was already bankrupt. One can say that Siberia started to work in
Armenia from scratch; firstly, it imported the Airbus 320 aircraft not
operated in our country before that, then they put the brand Armavia
into circulation, for which purpose they invited The Bank, an
international company. After examining the market, The Bank created
the apricot logo so dear to Armenians and Armavia's symbol with the
image of Mount Ararat. Besides, today many people will remember the
anthem of the company played in Armavia's commercial, which is also
Siberia's contribution. According to our interlocutors, all that was
the first steps, which the Russian company made, so that the airplanes
with these Armenian symbols become trustworthy and reliable to
Armenians living in different corners of the world. One of the correct
marketing moves of the then director of Siberia, Andrei Nikitin, was
the training of specialists abroad. We didn't have any educational
institution in Armenia to train specialists in aviation, therefore a
set of pilots and mechanics were trained abroad, furthermore, there
were neither pilots nor other employees in Armenia who were
experienced in operating Airbuses. Regularly launching new air routes
for Armavia was one of the achievements of Siberia. As people familiar
with the history of Armavia said during a conversation with Aravot, in
the most flourishing period of Armavia, in 2005, Siberia decided to
leave Armenia, handing over all shares, rights, and obligations to
Armavia. So Mikhail Baghdasarov acquired also the shares belonging to
Siberia. And on that day, the decline of the company started, despite
the fact that it was not obvious at first. People who worked at
Armavia for many years and contributed greatly to the building up of
the company, say with pain today that the work they did with so much
devotion has been in vain. Already former employees of Armavia told us
that Baghdasarov knew very little about aviation, in the first place,
otherwise, he wouldn't have acquired unprofitable air routes.
According to the employees, `He would launch air routes, then close
them, he wouldn't take into account how profitable a flight to the
given country was or whether there was an Armenian community there or
whether that community was big, whether there was an Armenian embassy.
For example, he launched the Yerevan-Tel Aviv air route: to begin
with, there is no Armenian embassy there, the Armenians who wanted to
go to Tel Aviv would go through Tbilisi, because firstly, the tickets
were cheaper than those of Armavia, secondly the embassy is in
Tbilisi. Therefore, it was more profitable to leave for Israel from
Georgia. Then he operated the Yerevan-Warsaw-Yerevan route for a short
period of time, then he sold it to Lot, a Polish company, the same
thing happened to the Yerevan-Rome-Yerevan air route or he launched
the Yerevan-Zurich route, which made losses, or he launched the
Yerevan-Birmingham route. Who needed that? It is a small English town,
where even 100 Armenians would not go annually or no Englishman would
come from there. We don't even know what such work should be called?
Even a person unfamiliar with aviation will understand which air
routes are profitable for Armenia, if he is quick on the uptake.'
According to former employees, the owner of Armavia, importing Boeing
and CRJ aircrafts, made a serious mistake again. `Although he leased
them, they are mortgaged in banks, but he was compelled to bring new
specialists to operate the aircrafts, and if he had imported Airbuses
again, he would have been able to operate them with the existing
employees. So many good pilots and mechanics left Armenia.' Today
Armavia owes millions of dollars; the Armenian company owes around $30
million to Rosaeronavigation alone. According to some specialists, if
Armavia is not able to pay off its debts, the Armenian government will
have to do that. In response to Aravot's question whether the Armenian
government had guaranteed that it would pay off the debt to
Rosaeronavigation, in particular, if Armavia was insolvent, the
representatives of the General Department of Civil Aviation adjunct to
the government of the Republic of Armenia said that the government was
not under any obligation with regard to any debt of the air company
Armavia. We also inquired of the Civil Aviation Department whether the
government had planned to carry out an audit in Armavia, in response
to which we were informed: `Not yet.' So it turns out that the
government doesn't have any wish to find out what the reason for
Armavia's bankruptcy is, particularly given the fact that the head of
the Civil Aviation General Department said on one occasion that the
prices for Zvartnots's services were not high at all. Basically,
Armavia will follow in the Armenian Airlines' footsteps, when hundreds
of employees, including pilots, didn't get salaries for years of work.
According to the bankruptcy procedure, it is intended that the
property of Armavia - the mortgaged aircrafts and 1-2 offices - will
be sold to first of all pay off the money owed to banks, and the $5.5
million debt to Zvartnots will hardly be pending; the pilots and a
group of other employees will suffer from this whole story. Armavia
must pay the pilots salaries for months of work, which also reach
millions. NELLY BABAYAN
Read more at: http://en.aravot.am/2013/04/05/153426/
© 1998 - 2013 Aravot - News from Armenia
From: Baghdasarian
April 5 2013
Already former employees of the air company think so While analyzing
the reasons for the `collapse' of the air company Armavia, a set of
experts in the field of aviation, expressed an idea that the owner of
the company, Mikhail Baghdasarov, and his careless attitude and
incorrect marketing were mostly to blame for all that. According to
people familiar with the field, before the majority of Armavia's
shares passed on to Baghdasarov, this company had prospered, and even
after the bankruptcy of the Armenian Airlines and society's
disappointment, Armavia won trust. In 1996, when Armavia whose
shareholders included also Mikhail Baghdasarov was established, the
name of the company was known to few people. According to our
interlocutors, it became famous when the second largest Russian air
company, Siberia, gained 70% of Armavia's shares in 2011. That air
company also took over all the air routes of the Armenian Airlines
that was already bankrupt. One can say that Siberia started to work in
Armenia from scratch; firstly, it imported the Airbus 320 aircraft not
operated in our country before that, then they put the brand Armavia
into circulation, for which purpose they invited The Bank, an
international company. After examining the market, The Bank created
the apricot logo so dear to Armenians and Armavia's symbol with the
image of Mount Ararat. Besides, today many people will remember the
anthem of the company played in Armavia's commercial, which is also
Siberia's contribution. According to our interlocutors, all that was
the first steps, which the Russian company made, so that the airplanes
with these Armenian symbols become trustworthy and reliable to
Armenians living in different corners of the world. One of the correct
marketing moves of the then director of Siberia, Andrei Nikitin, was
the training of specialists abroad. We didn't have any educational
institution in Armenia to train specialists in aviation, therefore a
set of pilots and mechanics were trained abroad, furthermore, there
were neither pilots nor other employees in Armenia who were
experienced in operating Airbuses. Regularly launching new air routes
for Armavia was one of the achievements of Siberia. As people familiar
with the history of Armavia said during a conversation with Aravot, in
the most flourishing period of Armavia, in 2005, Siberia decided to
leave Armenia, handing over all shares, rights, and obligations to
Armavia. So Mikhail Baghdasarov acquired also the shares belonging to
Siberia. And on that day, the decline of the company started, despite
the fact that it was not obvious at first. People who worked at
Armavia for many years and contributed greatly to the building up of
the company, say with pain today that the work they did with so much
devotion has been in vain. Already former employees of Armavia told us
that Baghdasarov knew very little about aviation, in the first place,
otherwise, he wouldn't have acquired unprofitable air routes.
According to the employees, `He would launch air routes, then close
them, he wouldn't take into account how profitable a flight to the
given country was or whether there was an Armenian community there or
whether that community was big, whether there was an Armenian embassy.
For example, he launched the Yerevan-Tel Aviv air route: to begin
with, there is no Armenian embassy there, the Armenians who wanted to
go to Tel Aviv would go through Tbilisi, because firstly, the tickets
were cheaper than those of Armavia, secondly the embassy is in
Tbilisi. Therefore, it was more profitable to leave for Israel from
Georgia. Then he operated the Yerevan-Warsaw-Yerevan route for a short
period of time, then he sold it to Lot, a Polish company, the same
thing happened to the Yerevan-Rome-Yerevan air route or he launched
the Yerevan-Zurich route, which made losses, or he launched the
Yerevan-Birmingham route. Who needed that? It is a small English town,
where even 100 Armenians would not go annually or no Englishman would
come from there. We don't even know what such work should be called?
Even a person unfamiliar with aviation will understand which air
routes are profitable for Armenia, if he is quick on the uptake.'
According to former employees, the owner of Armavia, importing Boeing
and CRJ aircrafts, made a serious mistake again. `Although he leased
them, they are mortgaged in banks, but he was compelled to bring new
specialists to operate the aircrafts, and if he had imported Airbuses
again, he would have been able to operate them with the existing
employees. So many good pilots and mechanics left Armenia.' Today
Armavia owes millions of dollars; the Armenian company owes around $30
million to Rosaeronavigation alone. According to some specialists, if
Armavia is not able to pay off its debts, the Armenian government will
have to do that. In response to Aravot's question whether the Armenian
government had guaranteed that it would pay off the debt to
Rosaeronavigation, in particular, if Armavia was insolvent, the
representatives of the General Department of Civil Aviation adjunct to
the government of the Republic of Armenia said that the government was
not under any obligation with regard to any debt of the air company
Armavia. We also inquired of the Civil Aviation Department whether the
government had planned to carry out an audit in Armavia, in response
to which we were informed: `Not yet.' So it turns out that the
government doesn't have any wish to find out what the reason for
Armavia's bankruptcy is, particularly given the fact that the head of
the Civil Aviation General Department said on one occasion that the
prices for Zvartnots's services were not high at all. Basically,
Armavia will follow in the Armenian Airlines' footsteps, when hundreds
of employees, including pilots, didn't get salaries for years of work.
According to the bankruptcy procedure, it is intended that the
property of Armavia - the mortgaged aircrafts and 1-2 offices - will
be sold to first of all pay off the money owed to banks, and the $5.5
million debt to Zvartnots will hardly be pending; the pilots and a
group of other employees will suffer from this whole story. Armavia
must pay the pilots salaries for months of work, which also reach
millions. NELLY BABAYAN
Read more at: http://en.aravot.am/2013/04/05/153426/
© 1998 - 2013 Aravot - News from Armenia
From: Baghdasarian