Losses of $900,000 in 1999

Published: 7/11/2000

The date of 30th June marked the AGM of Chelyabinsk Airlines Holding (CAH), which covers ten operating companies, including the airline of the same name, as well as Chelyabinsk Airport and ENCOR Airlines. Eduard Bobrovsky, board member and Executive Director of Chelyabinsk Airport, the company, headed by Sergey Yashin, General Director, reported that the company had a difficult 1999, recording a loss of $900,000. According to Bobrovsky the poor market situation was further aggravated by: · The need to attract 50m rubles funding for the completion of the airport's international terminal, which opened in September 1999, and the construction of the airport's number two runway, which is 200m longer than the older runway · The dramatic rises on jet fuel prices, which, for Chelyabinsk, rose from $78.5 to $189.3 per tonne over the period The airport in the period increased its passenger volume by 2.2% to 270,000 passengers, slightly down from the 3.3% increase at the half-year stage, with the airline increasing its passengers by 24.4% to 343,924. Bobrovsky attributed the latter growth to transit passengers and the extension of the airline's routes outside of the region. The figures were also a considerable improvement on the company's expectation at the half-year stage, when Elena Prokhorova, the then Commercial Director, claimed that a 10% increase in passengers was the airline's target for 1999. As with other Russian carrier's the airline's international traffic declined, falling by 19% to 10,113. The airline's plan for its financial recovery in 2000 includes: · The development and execution of marketing campaigns to attract more passengers including better use of advertising · Better understanding of customer needs · Cutting debtor days · Reduce taxes Bobrovsky said that the company was up to date with its payments to both employees and federal and local taxes, paying the latter $2.2m in 1999. The decision was made to pass on the dividend in view of the company's losses. The shareholders approved the new board as follows: · Edward Bobrovsky, the executive director of Chelyabinsk Airport · Galina Zheltikova, the consultant of YuzhuralNIKO consulting group · Anatoly Mikhin, the deputy head of air transportation licensing and regulations with FSVT · Elena Prokhorova, the deputy General Director of ENCOR Airlines · Evgeny Razumov, the General Director of Chelyabinsk Airport · Vitaly Sakmarov, the General Director of Chelyabinsk Airlines · Sergey Yashin, the General Director of CAH The company currently operates three Tu-154Ms, two Tu-154Bs, seven Yak-42s and three Tu-134s. It also has short-term leases for several aircraft on irregular basis. The major shareholder is the state, which holds 15% (FSVT manages the state's stake), with substantial employee holdings.

Article ID: 1924