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Government Unconvinced By Armavia Rescue Plan


Armenia -- A new Airbus A320 aircraft of the Armavia national airline, 07May 2010.

Armenia -- A new Airbus A320 aircraft of the Armavia national airline, 07May 2010.

Armenia’s civil aviation authority on Friday dismissed as unrealistic a rescue plan that was submitted to the government by Armavia, the troubled national airline, late last month.

Armavia asked the government to help it avoid bankruptcy with tax breaks and other measures that would support its renewed operations.

The debt-ridden company submitted the written proposals nearly one month after saying that it will file for bankruptcy because of mounting losses. Armavia flights to more than 40 cities in the former Soviet Union, Europe and the Middle East were discontinued immediately after the announcement of the move on April 1.

“We consider that program unrealistic,” Sahak Hakobian, a senior official at the government’s Civil Aviation Department, told RFE/RL’s Armenian service (Azatutyun.am). “That program basically amounts to a set of demands. We all understand that a [credible] program cannot involve only demands.”

Armavia says it can resume flights if it is exempted from a fixed $25 tax on all tickets, gets a 30 percent price discount for airport ground services and is allowed to import fuel for its own planes.

Hakobian described as “strange” the fact that the private carrier has still not asked an Armenian court to declare it bankrupt. “In fact, they only discontinued their flights,” he said. “A company declaring itself bankrupt should take further actions, should ask the court to declare it bankrupt. We still have no official information that Armavia has filed for bankruptcy.”

The government, for its part, has yet to decide on exclusive rights to international flights to and from Armenia which it controversially granted to Armavia in 2004. According to Hakobian, relevant government bodies are still holding discussions on whether to transfer them to another Armenian airline or liberalize the aviation sector instead. President Serzh Sarkisian is personally overseeing those discussions, the official said.

Government critics have long been advocating a so-called open sky policy, blaming Armavia’s privileged status for the relatively high cost of air travel to and from Armenia. The government has said until now that the country needs a state-supported airline for national security considerations.
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