Tuesday, March 15 2016 17:17
Naira Badalian

Air Armenia will be back: Court approves the company`s financial sanation program

Air Armenia will be back: Court approves the company`s financial  sanation program

ArmInfo. The regular court of Kentron and Nork Marash administrative districts of Yerevan has approved the financial sanation program of Air Armenia company.  The company hopes to resume its flights in the near future and to redeem its debts within the next 24 months, Arsen Avetisyan, Director of Air Armenia, has told ArmInfo.   

 
Last week the creditors approved the sanation program, which implies rehabilitation of the infrastructure, acquisition of 4 planes on lease at the expense of the funds of the East Prospect Fund, including 2 SRJ-700 planes (78 seats) and 2 A320 planes (150 seats). Avetisyan says that the company intends to redeem its debts within the next 24 months: the asset-backed debts will be repaid following the sale of property, with the remaining part of the debt to be redeemed in the order stipulated by the Armenian Law "On Bankruptcy". 
 
He notes that at the current stage the company is going to make the final arrangements with the local and foreign partners. "The company has an Air Operator Certificate. It is only necessary to prolong the validity of the document," Avetisyan says. "The action plan on 
financial sanation of the company has been prepared with due regard for all possible risks under the "open skies" policy conditions," he says, noting that the company keeps insisting on introducing equal conditions for all market players. "If the Russian air carriers enjoy preferences in the Armenian airport, then the local carriers should also be provided with the same conditions," he says. 
 
Arsen Avetisyan is not afraid of competition with the newly-created Armenia company. "We have always campaigned for healthy competition and cooperation on equal terms," he says, noting that Air Armenia will return to the Armenian aviation market no sooner than early 
summer. "We do not want to hurry in order to prevent the previous mistakes," he says. 
 
To recall, the national air carrier of Armenia - Armavia - suspended its flights on 1 April 2013 and launched the bankruptcy procedure. In 2014 the same happened to Air Armenia. On October 23, 2013, the Armenian government approved the programme implying provision of 
competitive and long-term air transportation services in the country.  The program is based on a joint study of McKinsey & Company and National Competitiveness Foundation of Armenia. 
 
In August 2015, Air Armenia received US$68.6 million from East Prospect Fund in exchange for 49% of its shares.  Chief executive of the East Prospect Fund  Vladimir Bobylev told reporters in Yerevan that at the first stage they were planning to spend $30mln to buy new 
planes and to open new flights to Arab states and Southeast Asia and to reschedule the company's debts. "We have chosen Air Armenia because we believe that it can prosper. Our goal is to make Air Armenia the leader of the region," Bobylev said. However, there are 
no specific results yet. To note, following the liquidation of Armavia, the "open sky" policy resulted in large-scale exodus of foreign companies from the Armenian market. As a result, due to the high prices of air tickets, many Armenian passengers prefer to make use of the services of neighboring Georgia, where there are several low-cost European companies.  
 
East Prospect Fund is a licensed financial structure registered on the British Virgin Islands. It invests its own and borrowed funds in the problematic assets of enterprises and protects them. The Fund is managed from London and Kyiv
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