Monday, September 22 2014

At the end of the past week the Armenian company Air Armenia fully paid off the past debt to the Russian State Corporation for Organization of Air Traffic in Russia, the company told Arminfo correspondent. 

The regular flights from Armenia to Russia did not stop and go on being implemented according to the schedule. 

As Air Armenia Director Arsen Avetisyan said on 12 September, the  Air Armenia Company will redeem the overdue debt in the amount of $405,000 to the State Corporation for Air Traffic in Russia for air navigation services.  According to him, the company's monthly turnover is $5.5 mln and $400,000 is not a big financial problem for the company -  some 10% of its monthly turnover. The director said the problem is not of financial nature.  It is a technical problem connected with Russia.  

He recalled that the foreign exchange accounts at SMP Bank OJSC have been blocked following the West's sanction against Russia. The Bank services the State Corporation for Air Traffic in Russia. On 8 September Air Armenia informed the Corporation that the payment has not reached the addressee and requested another account to transfer the amount to. On 11 September, the company received a letter from Director General of the State Corporation wherein he informed Air Armenia of a $405,000 overdue debt that can be paid through VTB-24 Bank that is not under sanctions. It was mentioned in the letter that the company's service will be resumed as soon as the debt is covered.  The letter is surprising, Avetisyan said, as Russia has not suspended the service of Air Armenia Company.  The company is indignant at the fact that the letter was made public.  "We have been working together for already 11 years and we have such kind of correspondence regarding debts once in two weeks. It is not clear, however, why the Corporation has made this commercial problem public. In fact, we have suffered losses," Avetisyan said.  Furthermore, this information aroused certain mess and affected the company's passenger flows. Passengers in Russia began returning their tickets to travel agencies and exchanging them for tickets of the Russian air carriers.  Air Armenia director did not blame openly the company's rivals for the situation, but he thinks it was in favor of the other companies.  "Many of our rival companies hoped that after the flights of Armavia national air carrier were suspended, no new air carrier will emerge in Armenia for a while, which will allow them gain the market.  However, Air Armenia has successfully entered the market and with its every flight attracts passengers from the rival companies," Avetisyan said. He said if the damage caused to the company is tangible - it will become known after relevant calculations -  the company will try to protect its interests in the court, he said.  The director added that initially the Russian air companies are more advantageous than the Armenian ones due to the open skies policy conducted by the Armenian authorities. For the Armenian carriers the duty per passenger is $8.4, whereas the Russian companies pay only 20% of the duty. Avetisyan explained that Armenia has introduced privileges for the foreign companies, not for its own air carrier, while Russia conducts no open skies policy and the company naturally enjoys no privileges in that country.  Air Armenia makes flights from Yerevan to Moscow (Vnukovo) twice or thrice a day, to Yekaterinburg - one a week, to Krasnodar and Saint Petersburg - thrice a week, to Nizhny Novgorod and Samara - once a week, and to Sochi - twice a week. The company has recently launched regular flights to Paris and Frankfurt am Main.  

At present Air Armenia owns two Airbus 320 and one Boeing 737-500.  Air Armenia is a private airline established in Armenian in 2003 and based at Yerevan Zvartnots Airport. For 10 years since its foundation, Air Armenia operated only cargo flights, except for a short period in 2003-2004 when it was contracted to operate passenger flights. Upon liberalization of air passenger transportation policy in Armenia in 2013, Air Armenia launched regular passenger services to Russia, and is planning to expand to other destinations in the CIS and Europe.