Murmansk carrier could go to Sibaviatrans

Published: 6/29/2000

It appears from local press reports on 23rd June, that the discussions that have been taking place since early March between the State Unitary Aviation Enterprise Pulkovo, OOO Murmansk Aviation Company (MAC) and the administration of the Murmansk region to take over the assets and routes of MAC, the now bankrupt owner of Murmansk Airlines, have finally collapsed due to reported delays in completing the deal by Pulkovo. The collapse of the talks, announced by Yury Yevdokimov, the Governor of the Murmansk Region, is a surprise to some, but appears to hinge on the failure of Pulkovo to provide sufficient commitment to acquire MAC. The failure of the talks follows the grounding of the MAC fleet on 3rd March 2000 due to the bankruptcy of the airline, but with the widely held expectation that the fleet would be taken over by Pulkovo and restart flying on 7th March under Pulkovo's licence, maintaining flights to the Murmansk Region. It appears however, that somewhere between that point and the deadline of 1st April, Pulkovo failed to respond to a demand from the region to make a decision on a final purchase under a preliminary agreement and the deal lapsed. Murmansk, according to reports, now has a new potential partner for MAC in the form of OAO Sibaviatrans, a carrier based in Krasnoyarsk, and a deal will be signed within a week. Norilsk Nickel, owner of 50% of MAC, its largest creditor and the owner of one of its aircraft, Sibaviatrans, managed by the Abramovitch brothers Boris and Alexander (Boris is also General Director of KrasAir) and the Murmansk administration will sign an agreement under which flights will be resumed using both MAC and Sibaviatrans aircraft. MAC is currently reported to have three Tu-154Ms, four An-2s, and 19 helicopters. Under the terms of the original Pulkovo agreement, in addition to ensuring flights within the Murmansk region, the acquirer had to retain the 420 employees of MAC. It appears that these conditions were difficult to meet for Pulkovo, as it could not fully utilise MAC's Tu-154s on local routes even when flights between Murmansk and Saint Petersburg were included, given current load factors. It appears that Pulkovo's failure to reconcile this dilemma led to the delays and collapse of talks. The conditions of the new deal are reported to be considerably less onerous in terms of the preservation of the fleet and employment, but little detail is available. According to Yury Sarapas, Director of MAC, the company is examining ways of using the Tu-154s given their inappropriateness for the region's routes and potentially they will be leased, although it is unclear whether the wet option is being considered. The latter approach would help preserve some flying jobs, which with the failure of the sale to Pulkovo would almost certainly go, and MAC employees are pressuring the regional administration and Yury Yevdokimov to resolve matter in their favour. While the Pulkovo negotiations were in progress there were also reports from within the Murmansk administration, that the airline was under investigation by the agency responsible for the investigation of financial crimes and had a number of documents seized, which had reportedly dampened the enthusiasm of the administration for the deal. Given that the deal finally failed, this particularly story appears to be self justification on the part of the regional administration, as their major partner in the form of Norilsk Nickel could not be described as a tower of financial and corporate probity.

Article ID: 1889