Another state investment bubble bursts: MP comments on Fly Arna

ArmInfo. Opposition MP from the <Armenia> faction Tadevos Avetisyan, commenting on rumors circulating  in the media about serious financial problems of Fly Arna, declares the dissipation of public funds and demands an answer from officials.

Let us recall that The project to establish a new airline became  known in July 2020,  when David Papazian,  CEO of Armenian National  Interests Fund (ANIF) and  Adel Al Ali, CEO of the Sharjah-based  budget airline Air Arabia,  signed an agreement.

On December 10, 2021, Armenian National Airlines CJSC received state  registration and began operating in Armenia under the Fly Arna brand  - ARmenian National Airlines.

"The authorities of that time presented this investment program  loudly and on all kinds of platforms. Of course, this populist  staging was launched at the most convenient moment - during the  pre-election period of the 2021 parliamentary elections. They did not  miss the opportunity and, as usual, with this program they promised  new foreign investments and new jobs, cheaper air travel, solutions  to many security problems, etc.

In fact, now it is becoming clearer - this was another portion of the  government's boundless populism in exchange for votes," says the MP's  statement received by ArmInfo.  Tadevos Avetisyan provides some  details of the program. Thus, by the decision of the Government of  the Republic of Armenia in October 2021, 4 billion 733 million 720  thousand drams (about 12 million US dollars) were allocated from the  state budget to  ANIF. Thus, the state, represented by ANIF, became  the owner of 49% of the company's shares. (On October 14, by decision  of the Cabinet of Ministers, the authorized capital of the ANIF fund  was increased. The allocated funds were used to establish the  national air carrier Fly Arna, a joint project of ANIF with Air  Arabia, ed. note).

The parliamentarian notes that two years after the establishment of  the air carrier, as yet unrefuted information is being circulated in  the media that Fly Arna is experiencing serious financial problems,  does not operate flights and is on the verge of ceasing its  activities. Another state investment bubble is bursting, he  emphasizes.

Now, according to Tadevosyan, the time has come for the  "all-promising" and once again failed officials, and the law  enforcement agencies serving them, to at least answer questions about  possible financial abuses in this state investment program and about  lost public funds. The MP is also interested in whose incompetence  caused the failures in the management of the company and what  negative consequences the suspension of the company's activities will  have on the air transportation market.

"What negative impact will the further possible liquidation of this  company with state participation have on the investment rating of the  state? And is there any investment program that you have "opened"  that has not suffered or will not suffer the same fate?" asks Tadevos  Avetisyan, expecting comprehensive and public answers from those in  charge to the questions posed.

It should be noted that in connection with the widespread rumors  about Air Arabia's intentions to leave the Armenian air  transportation market as early as December 2023 and withdraw from the  authorized capital of the established joint airline Fly Arna, at  ArmInfo's request in November last year, the Civil Aviation Committee  of Armenia clarified  that it does not have data on possible  withdrawal from the Armenian market. As sources close to the Arab  airline told ArmInfo, the reason for this intention was the failure  of the Armenian side to fulfill a number of agreed upon agreements.

However, on December 1, during a briefing, Armenian Minister of  Economy Vahan Kerobyan, answering a question regarding the possible  cessation of airline flights in Armenia, admitted that the national  air carrier Fly Arna needs additional funding. "I don't have that  information. I know that the company needs additional financing, and  this issue is currently being discussed. I think appropriate  solutions will be found.  We are working with the company," the  minister noted. However, he did not specify what decisions he was  talking about.