State V. Armavia: Government Sues "National Carrier"


ECONOMY | 23.07.13 | 15:20


The government, as represented by the State Revenue Committee, filed
a lawsuit against Armavia company for unpaid air taxes in mid spring,
upon which the Administrative Court is starting a trial end of July.

According to Datalex judicial information system, the plaintiff is
demanding a compensation of 7.36 billion drams ($17.5 million) from
Armenia’s national carrier which declared bankruptcy in early April.

On April 19, the court granted an injunction on the air company
property and finances as motioned by the plaintiff. The preliminary
court hearings were held in mid June and early July. Finance minister
David Sargsyan stated during a parliament session that Armavia is
indebted also to others, which in turn have filed respective lawsuits
against the company.

The minister says the state has not done final calculation of the
company’s obligations to the state.

In late March Armavia cancelled all its flights and started the
bankruptcy process, but has not filed the bankruptcy petition to
the court.

Earlier the company had publicized its debt and penalty lists,
according to which it owes 5.5 billion drams (around $13.8 million)
in air tax, andthe penalty amounts to 16.2 billion drams (over $40.5
million). For two years since 2010 the national carrier was falling
deeper into debts, totaling to 24.3 billion drams (around $60.7
million) it owes the state budget. The company, however,claims that
only 7 billion drams from it is the actual debt, the other 17 billion
are the result of penalties applied to it over a three-year period.

Armavia has submitted a ‘rehab’ program to the Public Council, which
further submitted it to the government. The executive body has given
no response so far.

Meanwhile Prime Minister TigranSargsyan has signed the concept
paper on the tender of Armenian airline licenses, which implies a
selection of three Armenian carriers registered in Armenia. This way
the government hopes to achieve a competitive field in the sphere of
civil aviation. The chief executive has also approved a stage-by-stage
liberalization policy for air transportation. A number of discussions
have been held by the government, the Public Council and theGeneral
Department of Civil Aviation (adjunct to the RoA Government) to assess
the prospects and the potential of developing the field.

Chief of the Civil Aviation department ArtyomMovsesyan says various
approaches have been suggested, that can be roughly grouped under
three main objectives: have a state or partially state air carrier, the
government should take up”open sky” liberalizationand stage-by-stage
liberalization policies.

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