Apr 26, 2013

Flight Plan: Armavia approaches Public Council with a “rehab” offer

Experts of Armavia air company, Armenia's national carrier that declared bankruptcy on April 1, has submitted to the Public Council a “rehabilitation” plan to overcome the stagnation in the sphere of civil aviation in the country.

The rehab plan suggests that the 10,000 drams ($25) air tax be taken out of the ticket price, independence be granted to air companies in acquisition of aviation gasoline, and Armavia’s debts to the state budget be rearranged.

Public Council (PC) chairman Vazgen Manukyan believes the package of suggestions can also help to rehabilitate Armavia. He says it is possible to have several national carriers, one of which could be Armavia, but on a smaller scale.

Countering to Manukyan, PC member Vazgen Safarayn, chairing the Union of Domestic Manufacturers of Armenia, says for a few times already both state and private structures have made concessions to help Armavia, however the company’s fiscal policy is unclear up until now.

Another PC member Karine Danielyan, leading the Association for Sustainable Human Development, says Armenian Airways – the previous “national carrier” -- should not have been sold and privatized. She believes by doing so Armenia has lost small aviation, and is now losing big aviation. Danielyan says in terms of national security the state approach to this issue has to be as strict as possible, otherwise the crisis might lead to outflow of skilled pilots from Armenia parallel with the aggravation of the situation.

Armavia had sold tickets for flights months ahead till October 26 and has been returning tickets to those passengers since early April. Around 300 tickets have been refunded, the reimbursement process is ongoing.

This is the second national carrier to go bankrupt in Armenia, the first was Armenian Airways. Armavia owner Mika Limited company, belonging to Michael Baghdasarov, is registered in Jersey Island, recognized as an offshore zone by a government decree of the Republic of Armenia.

Armavia owes the state budget 24.2 billion drams (around $58 million). Its total debt to the local banks makes $35 million, bringing the company’s overall debt to around $93 million. PC’s Manukyan stresses that Armavia has a plan on how to pay back its bank debts, while the debt to the state budget is suggested to be exchanged for company stock.

Source: armenianow.com

Apr 25, 2013

Armavia presents plan of rehabilitation actions

Armenia's national airline Armavia that suspended flights from the 1st of April 2013 to begin the bankruptcy proceedings, submitted to the presidential Public Council a plan of actions which it says is designed to rehabilitate the company, according to Public Council chairman Vazgen Manukian.

He said Armavia suggests to abolish the state due of 10 000 drams included in the ticket price (the so-called air tax, to create equal conditions for all players at this market, to allow it to purchase independently aviation fuel, to restructure its debts to the government  and so on. Manukian said these proposals need to be examined profoundly.

A Public Council member Vazgen Safarian,recalled that both government agencies and private companies met very often the company’s wishes halfway, however, its financial policy is still unclear. He said the airline was granted monopoly to operate flights in several directions and the problems it encountered were caused primarily by its ineffective and poor marketing policies.

Another member of the Public Council, Karen Danielian, said from the point of view of national security the government’s approach to this situation should be strict. Danielian also expressed concern that while a solution is being sought many experienced pilots could find jobs outside Armenia.

After discussions the Public Council decided to ask the government to create several national airline and create equal conditions for all.

Source: arka.am

Apr 19, 2013

Armavia’s departure had no effect on tourism in Armenia, deputy minister claims

Suspension of Armavia’s operations and start of the bankruptcy procedure have not affected Armenia’s tourism sector, deputy minister of economy Ara Petrosyan told journalists Friday.

The government keeps in contact with air companies and tour operators and received no complaints so far, Petrosyan said.

“Other companies increased the number of their flights to Armenia and filled in the gap left by Armavia”, the deputy minister said.

Petrosyan also said that Armavia reduced frequency of its flights even before announcing itself bankrupt; hence the company’s departure has not provoked any crisis.

Earlier, the head of Armenia’s civil aviation department Artem Movsisyan reported the government was negotiating with air companies to reduce ticket prices. The only company who raised its prices (by 10,000 drams) was FlyDubai, he said.

According to Armenia’s civil aviation department, in the last two years Armavia accounted for 20-24% of the overall air traffic. The company’s share was even lower this year – 16% in January and February and only 12% in March.

Source: arka.am

Apr 17, 2013

Till now Armavia has returned money for tickets to 40 people

“Armavia” Air Company has returned money for more than 100-120 tickets to 40 people. This was noted by press service of “Armavia” in the interview with Armenpress.
“Only people included in the list of Nalbandyan 23 “Armavia” office have received the compensation.” press service informed. In order to receive compensation for the tickets of canceled Armavia flights citizens are still registering in the “Armavia” offices.
Armenia's national air carrier "Armavia" air company made a decision to suspend the flights starting from April 1, 2013. The air company informed Armenpress that during the last three years the owner of the company implemented funds from other enterprises belonging to him aimed at the development of the Air Company. The situation became very complicated and hence, a decision was made to suspend all the flights and start the bankruptcy procedure. "Armavia" Air Company expresses its gratitude to the whole its passengers, whom they worked with for 12 years.

Source: armenpress.am

Apr 16, 2013

Secrets of Armavia’s bankruptcy reveale

The Armavia airline owes all airports large sums of money and for that reason these airports do not allow it to operate flights, the former head of the Main Department of Civil Aviation Shahen Petrosian said at the meeting with journalists today. In his words, the airline made a decision about bankruptcy because of its debts.
Economist Harutyun Mesrobian said for his part that bankruptcy is the best way to get rid of one’s debts.
He also underlined the importance of having a strategy of the sector. “Every self-respecting state should have such a strategy and a policy based on it,” Mesrobian noted.

Source: aysor.am

Armavia CEO blames poor management for bankruptcy

The chair of the Public Council of Armenia named bad management, high prices and insufficient governmental involvement among reasons for Armavia air company’s bankruptcy.
As Vazgen Manukyan stated at the April 11 hearing on Armavia bankruptcy, on April 18, the Council will submit a final conclusion on the issue for the government’s consideration. As Manukyan noted, Armenia must have 2-3 competing air companies to curb monopoly and provide transparency in the sector.
Armavia CEO Norayr Beluyan, in turn, stressed that a national air company with a 51% governmental share is necessary in order to provide proper management. He further agreed with Manukyan as to poor management in Armavia.
The General Manager of Armenia-International Airports CJSC Marcelo Wende, in turn, noted that currently, many companies are interested in operating flights to Armenia, which will help decrease the prices. As he noted, forming a new company will take up to 1 year.
The head of Krunk Air Vladimir Poghosyan expressed readiness to get a certificate for flights operation. “We have enough funds to purchase 8 planes to form an air company within 2-month period,” he said.

Source:  panarmenian.net