Tuesday, April 2, 14:55

An ad hoc committee will probably be set up in Armenia to engage in
bankruptcy procedure of Armenia national air carrier, Levon Ghazaryan,
Head of the Armavia IT-Service told ArmInfo. Ghazaryan has worked in
the aviation sphere for over 30 years.

He said that the committee will comprise representatives of both
creditors and the state. Part of the company's aircrafts will probably
be sold to redeem the accumulated debt, while the other part will be
written off.

According to, Armavia's demand for air navigation in Russia
totaled $288,000. "It is an overdue payment to the State Corporation
for Organization of Air Traffic for January 2013. The debt for the
following months is considered the current debt," the source reported.

Levon Ghazaryan said that the company's aviators have already begun
thinking of changing citizenship and workplace. Many of them will
sure take advantage of the new law lifting the ban on employment of
non-citizens of the Russian Federation at Russian airlines that came
into effect in Feb 2013. Russia needs nearly 1000 pilots of civil
aviation and Armavia's pilots intend to use the situation. In the
meanwhile, training of a pilot requires nearly $100,000 and Armenia
may remain with a foreign air company and without pilots. Nearly 22
air companies in the country exist only on paper. It is an opportunity
to get money at the expense of others. They create a company without
aircrafts, without equipment. The company makes contracts with foreign
airlines and offers flights of one airline instead of parity, and gets
funds for a definite quantity of sold tickets. The operating foreign
air companies already offer their services instead of Armavia. Thus,
Aegean Airlines has already offered a Yerevan-Saloniki flight for
much higher price.

Ghazaryan thinks that Armavia's bankruptcy will affect not only the
citizens of Armenia but also Zvartnots Airport that was reconstructed
on Armavia's allocations. Armavia paid the airport 52 million drams
per 9 flights. This amount was by 25% higher for nighttime flights.

The company made over 350 flights monthly and 24 flights daily. Other
airlines make one-two flights a week. It is not clear who will serve
the board number 1 (the president's plane) instead of Armavia.

Ghazaryan is bewildered at the statements of some parliamentarians
who compared Armavia's bankruptcy will possible bankruptcy of a
candy factory.

"It is interesting, if the Electric Networks of Armenia go bankrupt,
and the country remains without electric power, what will those
parliamentarians say?" Ghazaryan asked.

Bagdasarov set up Armavia in 1996 and sold it to Russian S7. In 2005
pressured by the Armenian tax authorities, S7 gave the company back
to Bagdasarov. Today Armavia carried out over 100 flights to over 40
destinations in 20 countries. It was the first to exploit SSJ-100. In
autumn 2012 Sukhoi Civil Aircrafts reported that Armavia's debt
for exploitation of SSJ-100 was over $4 million, inclusive of the
underfinanced transactions on the aircraft, debt for service and spare.