Claims of a deal done to cheap (500 words)

Published: 10/10/2000

In another episode in the protracted demise of Murmansk Airlines has unfolded with flight crew formerly employed by the bankrupt airline sold at the end of 1999, sending an open letter to President Putin and the chairman of the Duma, Gennady Seleznez, complaining about the bankruptcy proceedings at the airline. The letter claims that the airline was sold to Murmansk Aviation Company (MAC) controlled by metal processor Norilsk Nickel for $5.1m, despite having a fleet of 3 Tu-154Ms, 4 An-2s, 4 Mi-8s and 7 Mi-2s according to the pilots. Subsequently one of the Tu-154 was sold for $2.5m, which reduces the MAC fleet to two 8-year-old Tu-154 both of which are for sale for $2.1m and $2.2m respectively. The company's website also offers a considerable proportion of the helicopter fleet for sale. The original auction of the airline's assets in 1999 did however, have a number of participants including, Baltinvestovsky, reportedly backed by Pulkovo, who bid $5m and Atlant Soyuz and was originally expected to go for around $3m. MAC however, 50% owned by Norisk and the regional government, is not licensed as an operator, but is purely using MA's route licences in theory using its assets. MA is in temporary management under Alexander Tarantov, although given the fact that it has no aircraft its chances of emerging from bankruptcy look slight.. MAC's problems, which they freely admit were caused by lack of experience, occurred almost immediately. MAC was then reported to be negotiating an agreement, with Pulkovo Airlines early in 2000 to operate the company. Other sources however, report that the negotiations were ahead of a takeover and its fleet were grounded in March 2000 pending the outcome of talks with the state owned aviation company. The negotiations with Pulkovo however, failed due to lack of agreement between the regional authorities and the aviation company. Rumours of the entry of Sibaviatrans into the equation by providing aircraft to restore MAC's services have also come to nothing. The latter is now operating its own service to Moscow from Murmansk independent of either MAC or MA. MAC curiously, given the reason for the rejection of the Pulkovo bid was supposedly the planned disposal of the Tu-154s that were considered by PA unviable on the airline's routes has been forced to dispose of some of the aircraft to keep the operation going. According to MAC however, the inter and intra regional routes of the airline still remain unprofitable. The letter from the pilots further argues that the local authorities who were responsible for the sale, failed to find pilots not taken by the new carrier created with the Murmansk fleet, suitable employment and informed them they would be “reserve pilots” on a stipend of $4.5 a month. The local authorities had also been under investigation during the transfer earlier this year because of financial irregularities at the airline relating to the Pulkovo negotiations.

Article ID: 2122