Rocky future for the airline

Published: 6/28/2000

State-owned Kirov Airlines (Kirov State Unitary Aviation Enterprise) based in Vyatka and currently headed by Valentin Komlev, General Director, has suffered an ignominious slide over the last eight years from an air company employing over 1500 people to its current level of 420, with only nine cabin staff currently employed. During the summer season the company is only planning to make six flights a week to Sochi, Krasnodar, Norilsk, Baku, Samara, and Mineralny Vody. Even with this limited schedule and prices between 1,000 to 2,500 rubles, demand for the flights remains low with passenger numbers falling from 253,000 in 1989, to 1,800 in 1999 as the result of extremely low load factors, with most travellers from the region choosing the option of the train. Prior to 1992, the air company operated 32 routes, including Vorkuta, Murmansk, Tashkent, Riga, and Kiev, with a scheduled cargo service using an An-26 regularly carrying freight for local companies such as washing machine manufacturer Vesta. The airline remains out of bankruptcy, but attempts were made to introduce administration in April of 2000, although a compromise was found delaying debt repayments for five years. Currently none of the region's 56 local airports are in operation and the fleet of 40 aircraft used for agricultural operations have been grounded for the last four years, with only ambulance and forest patrol missions being undertaken. The airline's two Tu-134s are wet leased out to a Moscow airline and Sochi-based Chernomoravia. The four An-24s are leased to the United Nations for service in Tadjikistan, Georgia, Yugoslavia, and Africa, and according to local reports are regarded along with their crews as being of a high standard by the UN flight authorities. The balance of the fleet comprises of three An-26s, five Mi-2s and five An-2s, which were left after the write-off of unserviceable aircraft. The summer season has brought no respite for the troubled airline, with flights to Sochi cancelled after only one ticket sold on the 19th June and to Samara on the 22nd June after the sale of two tickets. According to Boris Dryagin, Director of Kirov Airport and part of the airline company, the airline has been heavily impacted by rising costs, particularly the price of fuel, and low load factors and ticket prices, which when combined with airport charges make simple breakeven a difficult if not impossible task, particularly when the airline does not gain the benefit of charter tourist routes. As to the future, Dryagin says that he is not entirely sure how things will work out. It appears however, that the leased aircraft are currently the only substantive revenues they have, which is a rocky basis for the future given the cut-throat nature of bidding for UN tenders in particular and the generally competitive nature of the Russian and CIS lease market.

Article ID: 1885