Despite the age and condition of its fleet the airline remains optimistic (240 words)

Published: 8/16/2000

On 6th July, the St Petersburg and Leningrad Oblast Arbitrage Court decided to suspend bankruptcy proceedings against Leningrad airline (LAP) Rzhevka, after the company reached an agreement with creditors. The court however, did not make the decision public until the 26th July. The airline went into bankruptcy proceedings in June 1999, at the behest of the Federal Bankruptcy Service. As a result, on 22nd November 1999 the regional arbitrage court established external administration for one year under V. Kovalenko. During the year, Rzhevka has continued to survive and generate revenues, paying back its major debtors. The regional airline however, continues, as with most of its competitors, to have problems with its fleet in terms of age and repair. With the cost of overhaul for the regional carrier set at $12,000 per aircraft the future is a challenging one, as it makes it difficult for the carrier to operate fully even if demand exists, given the inability to fully overhaul or acquire new aircraft. Despite these constraints the airline is reported to be optimistic, with plans to develop the airport and facilities at Rzhenka and resume intra-regional flights using a 15-seat aircraft to Lodeynoye Pole or Vyborg. The latter, they argue, will reduce the travel times from three hours by car to half an hour by plane and will have an equivalent cost.

Article ID: 2000