By Gevorg Stamboltsian
The executive director of Armenian Airlines said on Wednesday that the state-owned carrier which was declared bankrupted recently is highly unlikely to fully repay its debts estimated to total $28 million.
In an interview with RFE/RL, Arsen Avetisian said the company would be able to do so only if it was allowed to resume and operate a single daily flight from Yerevan to Moscow for at least two consecutive years. “But given the existing agreement between [the private airline] Armavia and the Armenian government, the likelihood of the implementation of a financial adjustment plan drawn up by Armenian Airlines is very small,” he admitted.
Armavia, which is owned by Russia’s second-biggest Sibir airline, was granted most of Armenian Airlines’ flight rights in the former Soviet Union and Western Europe when it signed the agreement with the government more one year ago. It has since replaced Armenian Airlines, notorious for mismanagement and poor service, as the country’s flagship carrier.
The Yerevan-Moscow flights reportedly generate 42 percent of Armavia’s operating revenues. Sibir, which has already invested heavily in its Armenian subsidiary’s fleet of mainly European-made aircraft, is therefore unlikely to share the lucrative service with anyone.
Meanwhile, Armenian Airlines creditors, most of them based outside Armenia, are expected to gather in Yerevan next month to discuss its future. According to Avetisian, they will likely decided to liquidate the company. He said it can partly clear the debts with proceeds from the planned sale of its property and equipment, including Soviet-era commercial jets.
Armenian Airlines, profitable as recently as in 1997, began steadily sliding into bankruptcy in 1998 and carried out its last flight in December. Avetisian blamed the downfall on the Russian economic crisis of 1998 and a series of subsequent restructurings which deprived the company of some of its profit-making divisions. But some independent aviation experts believe that the company fell victim to government corruption, inefficiency and mismanagement.