Mar 21, 2011

Armenia Airport, Airline Settle Debt Row

Armenia’s main international airport and national airline said on Monday that they have settled a bitter financial dispute that threatened to disrupt the country’s air communication with the outside world.

Yerevan’s Zvartnots airport last week delayed several flights by the Armavia carrier for what it called a failure to pay outstanding debts for airport ground services.

Armavia executives denied that and said Zvartnots’s Argentine management has drastically raised its service fees. They claimed that the tariffs were already much higher than those charged by major airports in Russia and western Europe. The airport chief executive, Marcelo Vende, responded by accusing the airline of spreading “disinformation.”

The two sides announced that they signed on Friday a compromise agreement brokered by the Armenian government’s Civil Aviation Department. But they refused to disclose details of the deal.

“All issues have been resolved,” Armavia’s Russian-Armenian owner, Mikhail Bagdasarov, said. “I’m not going to tell you how because it’s a commercial deal. Both sides are satisfied.”

“We certainly wanted to gain more. But the two sides are making concessions to each other,” he told at a joint news conference with Vende and Artyom Movsesian, head of the Civil Aviation Department.

“We understand that Armavia is making a lot of investments, trying to bring more aircraft to Armenia and seeking to develop civil aviation in Armenia,” Vende said, for his part. “But we also have liabilities to various foreign banks and Armavia should understand that we have made a lot of investments in the new terminal which we will inaugurate this autumn.”

According to Movsesian, the Zvartnots management agreed to reschedule the repayment of “a considerable part” of Armavia’s debt. He gave no further details, and it thus remained unclear how much Armavia owes to Zvartnots.

Bagdasarov said last week that his company spends between $4 million and $8 million a month on various services provided by the airport.

Zvartnots is run by the Corporacion America group of Eduardo Eurnekian, an Argentine billionaire of Armenian descent, in accordance with a long-term management agreement signed with the Armenian government in 2002. Eurnekian has pledged to invest more than $100 million in rebuilding the airport and upgrading its facilities. 

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