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"Armavia" Blames Armenian Authorities For The Created Situation

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  • "Armavia" Blames Armenian Authorities For The Created Situation

    "ARMAVIA" BLAMES ARMENIAN AUTHORITIES FOR THE CREATED SITUATION

    ARMINFO
    Tuesday, April 2, 13:09

    After suspension of the activity of the national air carrier "Armavia",
    no air company really dealing with passenger and cargo traffic will
    remain in Armenia, the letter of several responsible employees of
    Armavia about the situation created in the company says.

    The letter was sent to Arminfo's request.

    To recall, starting 1 April Armavia stopped implementing flights
    and started the bankruptcy proceedings. "This is not simply a store
    that was closed and is not even a company with 400 employees. Few
    persons understand the depth and consequences of the tragedy. We did
    not manage to withstand the competitive fight, and could not find
    sales markets. As for our market, it is small, technologies are old,
    machines are from the Soviet times, and the management is wrong
    (the favorite word of our rulers)", - the letter says.

    It also recalls that at the end of 2012, at one of the parliament
    sessions, a member of the parliament from ARF "Dashnaktiutyun"
    parliamentary faction applied to the government and demanded
    explanations regarding the situation in Armavia. They replied: "We
    don't know, we shall clarify and reply in a written form". "Four
    months have passed, but they are still clarifying. Perhaps, this
    is their business - to lead the company to bankruptcy. One of the
    most important companies of the country, the second after the army,
    is being bankrupted but they are not aware of that! Sir functionaries,
    perhaps you don't know that our generation remembers and knows well the
    pilots, like the most courageous sons of our people. Not foreigners but
    our pilots used to fly to the partly ruined airport of Gyumri at the
    first night after the earthquake, and not foreign but our equipment,
    engineers and air communicators ensured security of flights. Our
    pilots risking their life used to fly to Baku, Artsakh and recently to
    Syria, whereas others refused to fly", - the letter says. The owner of
    Armavia, Mikhail Bagdasarov, has started the bankruptcy proceedings,
    but the government is silent, as Bagdasarov did not inform them in
    advance. "But the aviation does not belong to Bagdasarov or Eurnekian,
    it belongs to those who fly and work in it.

    What if tomorrow Eurnekian will also bancrupted and close the airport?

    What will you say? Will you again repeat your favorite word expression
    "wrong management"? This is a private capital and we have nothing
    in common with it",- the letter says. It also recalled about the
    bankruptcy of the "Armenian airlines" company 10 years ago, though
    there was no financial and economical crisis that time. "Perhaps, you
    are the reason of all this, sirs, as you used to make public statements
    that you are not going to let foreign companies to raise ticket and
    baggage prices. How are you going to make foreign companies not to
    do that? You can only forbid these companies to fly to Yerevan. But
    in that case, how people will fly?", - the letter asks.

    "The army of jobless people will be replenished by another 400 people,
    mainly the last generation of pilots, engineers and airplane flight
    chiefs, which got fundamental education during the Soviet times.

    Moreover, the state budget will lose about 30-40 mln drams of income
    taxes and social payments per year. This means that about 1 million
    pensioners will not get their 40 000 drams. As for those 40 mln
    drams, they will go to the budget of those states, the air companies
    of which will transport our passengers. Moreover, those 400 people
    should get unemployment benefit at the expense of other tax payers,
    and Armenia's budget will not gain the sum for the customs clearance of
    the air repair parts, the profit tax of which our company had to pay.

    Training of an aviation specialist (aviation engineer, aviation
    technician etc.) costs at least $20,000, while training of pilots costs
    up to $100,000. Armavia training engineers, technicians and pilots
    spending huge amount of money on that. Where will those young pilots,
    engineers and technicians occur is still unknown. The aviation market
    of Armenia totals approximately $800 million annually. The figures
    are approximate but the authorities may know the precise ones.

    The figures may be higher but not lower. Passengers pay this money
    for arrival in and departure from Armenia. VAT makes up 20% of this
    amount of money, which is nearly $160 million replenishment of the
    state budget annually. The ideal version is when the transporters
    of both markets work 50x50. This means that the companies registered
    in Armenia must transport 50% of passengers and pay VAT in Armenia,
    which is nearly $80 million annually. The remaining $80 million is
    annually supplied to the budgets of such 'poor' states as France,
    Germany, and Russia. Then the Government of Armenia borrows those
    funds boasting of low interest rates (1%-6% annual) and on-lends to its
    citizens and enterprises under 10%-24% annual interests. Enterprises
    go bankrupt, citizens starve amid prosperity of banks and statesmen,"
    the letter reads. For instance, the policy of the aviation authorities
    of Lebanon prohibiting flights of the Armenian airline, despite the
    fact that Armenia underwent audit of the most authoritative European
    organizations over the last 6 years. Armenian pilots and engineers are
    highly in demand by the world airlines. "It is government that must
    fight for the hard-earned niche in the world market of aviation and not
    the private companies, because these are international relations. In
    the meanwhile, our authorities have been using the phrase 'open sky'
    too frequently recently." "The countries well-disposed towards Armenia"
    try to persuade our officials that this step is right. Actually, it is
    deception, as they have already gained our market and try to nail down
    their achievement by means of our officials, the authors of the letter
    say. They recall that immediately after collapse of the Soviet Union
    then head of the Civil Aviation Department of Armenia Yeritsyan signed
    an agreement with Russian aviation authorities that can be called
    'Parity of seats'. It meant that Russian air companies had a right
    to transport equal number of Armenian passengers to any destination.

    Mechanisms were developed and introduced to control over provisions
    of that agreement. Then no one flew to Armenia except CIS companies.

    "Then our government decided that aviators manage aviation in a
    wrong way (our government did not know the word management then). As
    a result, a big number of 'manager specialists' emerged in the
    aviation, among them there were hairdressers and directors of funeral
    bureaus. So, we have got a high-ranking aviator that organized debauch
    on the board of the plane. Afterwards, the Armenian Airlines collapsed,
    and passengers were no longer transported by Armenian airlines, but by
    foreign companies, including European ones. It was only after transfer
    of flights to Armavia in 2005 - giving proper respect to Siberia
    Airline - that in conditions of stiff competition Armavia independently
    began gradually regaining our people's share in the aviation market,
    which made up nearly 40%-45% in 2010 in the CIS and Middle East. There
    were also European countries Armavia yielded to due to high level
    of requirements and stiffer competition. It was necessary to study
    markets, passenger flow, open new flows, no one would welcome us so
    easily. Armavia lacked force and opportunities, while the government
    provided no support to it. On the other hand, Russia and Ukrainian
    companies were oppressing up by dumping. One and a half year ago
    the Armavia insisted on signing of the agreement on "Parity seats"
    between the Armenian Government and Russia. However, that agreement did
    not help returning our people's share, because the document provided
    for equal number of flights that could be made by both big and small
    planes. In that situation, to win one should have a big aircraft fleet
    and big internal market," the letter reads. The authors of the letter
    highlight that customs services are to protect the domestic market,
    first. Nevertheless, in Armenia they have turned into a machine to
    seize money from enterprises and citizens. "The Government considers
    those enterprises as milk cows exclusively. Recently specialists had
    arrived in Armenia on the credit funds, taught Armenian specialists
    how to upgrade management efficiency, and taught Armenian tax officers
    how to collect taxes efficiently. In the meanwhile, those credit funds
    could be invested in a small enterprise producing men's socks and stop
    importing them from Turkey. This will allow employing several dozens of
    people. What are you engaged in our oppositional and pro-governmental
    parliamentarians? Why did we elect you? You eat our bread that was
    sown also by Baghdasarovs, Tsarukyans and Sukiasians. You can't work,
    indeed, because your hands cannot bring benefit to the people, you
    are too busy with retaining your seats," the letter reads.

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