Concerns about return of holidaymakers (410 words)

Published: 9/1/2000

On 18th August, the Court of the Central District of Riga seized a Tu-134B belonging to the Latvian airline Baltic Express Line (BEL), potentially leaving holidaymakers stranded in Turkey as they were chartered to return a group from Turkey on 28th August. The aircraft was seized on behalf of Overseas Credit Management Ltd. as the result of a default on a loan granted by the affiliate of Overseas Credit Finance Ltd. (U.K.). BEL signed a loan agreement on 19th May 2000 for a credit line of $200,000 of which $192,000 was received by the airline, with a maturity of 19th August 2000 on terms of 25%. BEL however, did service the debt, leaving a debt of $7,069.73 and by June was not answering the lender's calls and letters according to reports in the local media. On 9th August, BEL claimed that it was trying to resolve the problems over the debt repayment , but the court placed a writ of attachment on the airline's Tu-134B for the debt of $7,069.73. BEL however, used the aircraft on 18th August and the court ordered the seizure of the aircraft at Riga Airport. BEL is reported to have had problems for some time cancelling a flight in the spring of this year, when the passengers were waiting to leaving the trip organiser travel agency Begonija with losses. On 25th August, Boris Belousov, president of BEL, assured the media that the flight to Turkey to pick up the group of tourists would take place, adding that the airline had financial problems, but they had been resolved. Also that the Estonian carrier ELK, apparently owned by Belousov's brother Alexander, would provide the aircraft if one was required. According to Belousov, last year Latvian airlines Latpass and Latcharter had helped each out in a similar manner. According to Hariy Bekeris, a spokesman for the Civil Aviation Administration of Latvia quoted in the local media, legally a foreign airline would only be able to make such a flight if a domestic airline refused to do so. Meetings between the management and the travel agencies Lattur, Ar-Tur, and SIB Travel on 25th August led one agency head to comment that he believed that others had engineered BEL's situation in the sector, as the charter airline was fully booked, and there was a struggle for passengers from the Baltic republic. The fate of the principle of the loan remains unreported.

Article ID: 2045