Kazakhstan's Prime Minister Tokaev has signed a directive transferring 50%
of Air Kazakstan, the national carrier of Kazakhstan, from the country's air
transport holding company confusingly called the Air Kazakstan Group, to the
country's leading commercial bank Kazkommertzbank and the airline's largest
creditor.
The transfer of the holding in the troubled carrier was made as part of a settlement
between the airline and Kazkommertzbank and reflects the fact that according
to reports in August 2000, the bank started court action for payment of the
airline's debts while holding the airline's assets as security against borrowings.
The bank will also take control of the other 50% of the government's holding,
which it will hold in trust for an indeterminate period. The airline is reported
to owe $22m, the figure has however, ranged between $25-100m over the last ten
months and it is therefore difficult to get an exact sum. The President of Air
Kazakhstan Group Alexander Krinishansky suggested late last year that the higher
figures were exaggerated. What is clear is that despite the efforts of the government
in the guise of Air Kazakhstan Group, the airline remains in trouble despite
its reorganization earlier this year and has been unable to pull itself back
from bankruptcy.
According to the bank they have already started developing a programme to improve
the situation at the airline and the bank is confident that it can improve the
airline's performance to the point where it can sell a 50% interest. The bank
curiously says that it does not intend to change the senior management of the
airline, but focus on the improvement of the fleet and service. Whether this
will be enough to reverse what has been a catalogue of poor emerging airline
planning, despite considerable advice to the contrary from consultants including
SH&E, is unclear. What is clear is that the bank has had a relationship with
the airline over a long period and has been deeply involved in its operations.
The takeover will therefore not be from an organization completely unfamiliar
with its business. The more cynical however, may argue that they have had little
impact to date and what is likely to substantially change in the future.
For Alexander Krinitchanski, the bank takeover of the airline is a step closer
to privatization that he believes offers the airline a viable future and is
a deal that he was reported to be negotiating with Israeli and Taiwanese groups
in August this year. The handing over of the airline by the government is however,
testament to how desperate affairs had become at the embattled carrier, given
that is was felt locally that the transfer of the airline's assets to the bank
would be an action of last resort. The handover of the airline to the bank is
however, unlikely to be the end of the story given the widely circulating reports
of corrupt practices involving sales of aircraft within the airline. In addition
to the view of the other state carriers including Irtysh-Avia, that the flag
carrier status and associated routes should be split among the other leading
airlines along the lines suggested by Anvar Batalov the Head of civil aviation
at the Ministry of Transport in August.
