Licence suspension forces grounding of fleet, at least temporarily (317 words)

Published: 10/19/2001

Formerly the subject of interest from Siberia Airlines (Sibir), Irkutsk-based Baikal Airlines, 72.5% owned by the state, ceased operating flights on 29th September. Company spokesman, Vladimir Abuzdin, said the final flight by the airline was to China, a route subsequently taken over by Sibir. The suspension of the airline's operating licence by the GSGA brought operations to a halt, although Abuzdin says the airline is now working to fulfill the GSGA criteria in order to have its licence restored. If so, the airline will operate its Mi-8 and An-24 on intraregional routes. The company also plans to use its helicopters for tourist trips around Lake Baikal, the main attraction for tourists in Irkutsk region. Abuzdin claims the airline currently has a fleet of fleet of five or six helicopters, four or five An-24s and one Tu-154, all of which are flyable, with four Tu-154s leased to Sibir and two Tu-154 to a Moscow-based airline, Tacis, generating the non-operating airline some revenues. However, the extent of the fleet quoted seems highly improbable. Over the last couple of years, Baikal has virtually withdrawn from all long haul routes, with the exception of China, the principle source of the airline's revenues, given heavy losses on local and regional services. In 1999, the losses led to the company's bankruptcy, which was only resolved in December 2000 by a restructuring agreement with creditors. On 13th December 2000, the Irkutsk Regional Court of Arbitration approved the settlement between Baikal Airlines and its creditors, involving the sale of the airline's cargo subsidiary to Tacis for 115m rubles ($4.6m). The settlement called for debt restructuring to the tune of 295m rubles (around $10m) over 11 years. In July 2001, the airline shareholders hired a management company to help the company to overcome its crisis, but the effort subsequently failed in late September.

Article ID: 2837