More details on Sibir's participation (559 words)

Published: 7/26/2001

Commenting to journalists on Siberia Airlines' (Sibir) interest in the recently revealed commercial leasing structure, the airline's General Manager, Vladislav Filev, said that the airline would lease back the 20 Tu-154Ms it was contributing as its investment to the project, after overhaul and modifications. It expects to be operating the aircraft during next summer's season and does not anticipate that they will leased to other companies in the short term but, as more modern aircraft became available, they would be leased to other carriers. Filev said that Sibir fleet plans include the gradual disposal of its ageing Tu-154B fleet of 12 aircraft, nine of which belong to Sibir and three to VAL, for replacement with the Tu-154M. He confirmed that the airline has plans to use 15 Il-86 from the 31 aircraft jointly owned by the two carriers (Sibir 9 Il-86 and VAL 22 Il-86) reflecting the poor condition of many of the VAL aircraft. Sibir also intends to increase its numbers of Tu-204s and is contemplating using the Tu-214. The Tu-204 that Sibir received from the merger with VAL is now undergoing repair and upgrading to Tu-204-100 standard. Sibir expects to receive the aircraft by the end of July and to have it in service in August 2001. Referring to the tender for the government guaranteed leasing structure, Filev said that Sibir, with its partner Aeroflot, is preparing the appropriate documents. In a wider context, in terms of the relationship between the two carriers, Filev said that groups from Sibir and Aeroflot are currently working to co-ordinate schedules and routes, and that a merger remains a possibility, although the discussions are at too preliminary a stage to confirm this. The use of the term "merger" may be somewhat misleading, as earlier comments from Valery Okulov implied that what is being envisaged is a greater level of cooperation between the two, to compensate for each side's strengths and weaknesses in the international and domestic markets. Filev said the market share of Sibir in 2001 is estimated to be between 8-9% and the company has the leading position in the domestic market. He did, however, talk down expectation of Sibir's acquisition of VAL's business, suggesting that the airline may only hold a very modest 25% of the carrier's trade, but then failed to elaborate on why he felt that this would be the case. Filev further confirmed that, after the merger with VAL, the new company would be called Siberia Airlines, with a full integration of all VAL's activities within Sibir. As for the ratio of exchange of share in the merger, Filev refused to comment on the detail, other than to say that it still had to be approved by the board of each company and the respective EGMs in October-November. He still expects the merger be completed by February-March 2002 and only after that point would Sibir be responsible to VAL's creditors. The company is therefore eager to move ahead on the restructuring of the debt, given that the airline is already paying VAL's staff, despite not having responsibility for its debts. Reports from sources indicate that the situation at Vnukovo may get considerably worse, with rumours that the tax authorities may have seized Vnukovo's accounts, pending an investigation. There is, as yet, no confirmation of this.

Article ID: 2666