Heavy Lift and Volga Dnepr still together (430 words)

Published: 10/19/2000

It would appear that reports appearing in the press in Russia over last week that Volga Dnepr was in the process of negotiating a marketing deal for the US with Kansas City based Aircraft Leasing Group (ALG) were unfounded according to statements from both sides to the rumoured agreement. According to Fahhad Azima of ALG, a leading shareholder in Heavy Lift, and Graham Pearce of Heavy Lift during a telephone interview with Concise, ALG remains Heavy Lift's general sales agent in the US and continues to represent Heavy Lift and its joint venture with Volga Dnepr in the Americas. Volga Dnepr however, would not comment on the reports relating to the rumoured discussions and said that the JV agreement with Heavy Lift remains in place. The denial of marketing agreement discussions by ALG, comes after a period of protracted discussions between the two joint venture partners, which according to Pearce have taken place over much of this year, looking for a suitable formula for the extension of the joint venture. Sources have commented that VD are not happy with the current 50:50 split of cost and revenues of the venture and are seeking a bigger share. Heavy Lift however, believes that the split is equitable and are reported to be continuing to negotiate on that basis. The tensions as a result of this lack of resolution, may have led to the rumours of discussions between VD and ALG, as VD reviewed its future options in a major market. Reports of a substantial slowdown in the joint venture's business over 2000 are also dismissed by both sides, with Vince Seeger of Heavy Lift commenting that business is slightly soft compared with last year in a generally soft market, but refuted reports that the airline's An-124-100 were operating at very low levels of utilisation, adding that 5-6 aircraft out of the 10 in the fleet have been fully employed during 2000. From Volga Dnepr the Director of External Relations, Dmitry Stolyarov, stated that the airline had “volume of sales” for the first nine months of 2000 up by 26% on the same period of 1999. Despite the comments form both sides, the suggestion from the sum of the various reports currently circulating, is that the VD and Heavy Lift negotiations are currently not going as smoothly as both sides would like and that an agreement between the two sides should not be expected soon, unless one or other party makes substantial concessions on their current positions, leaving the possibility that VD may consider going it alone.

Article ID: 2136