Management threatened with arrest

Published: 3/31/2000

In contrast to earlier claims of cleared wage arrears; large wage debts are compelling bankrupt Baikal Airlines" management to sell three of its aircraft.According to the new temporary manager Vladimir Panfilov, who has replaced the original manager Vladimir Sisov, the airline cannot maintain and repair the aircraft. The sale will occur before the company leaves administration in May of this year according to the company and the revenues used to clear wage debts to employees. Aircraft sales are an emotive area at Baikal, as the illegal sale of three of the company"s Il-76s to East Line in 1999 caused considerable controversy when discovered by the incoming temporary management and led to an extended court case in Baikal and Moscow over who owned the aircraft. The decision to go ahead with the sale was not entirely driven by the management"s concern about the workforce, as the Council of Wage Control of Irkutsk had threatened them with arrest and imprisonment on the 22nd March after they failed to clear wage arrears of 18 m rubles ($750,000) by the end of February as promised. Employees have only just received their January salaries. The company was put under temporary management in 1998 with the firing of the then General Director Vladimir Kovalenko. Since then has been some improvement under the previous temporary manager, but current debts stand at $22m, with receivables amounting to only $5.6m.Sisov had previously argued that the sale of aircraft would be detrimental to the airline"s recovery and believed he needed more time to turn the airline around, but was strongly opposed by a sizeable section of the shareholders who were keen to have the airline"s assets liquidated. Associated articles: www.concise.org 22nd February 2000: Baikal Airlines still under threat 16th November 1999: Baikal creditors vote for management 10th August 1999: Baikal Airlines problems multiply

Article ID: 1638