“ARMAVIA” BLAMES ARMENIAN AUTHORITIES FOR THE CREATED SITUATION
ARMINFO
Tuesday, April 2, 13:09
After suspension of the activity of the national air carrier “Armavia”,
no air company really dealing with passenger and cargo traffic will
remain in Armenia, the letter of several responsible employees of
Armavia about the situation created in the company says.
The letter was sent to Arminfo’s request.
To recall, starting 1 April Armavia stopped implementing flights
and started the bankruptcy proceedings. “This is not simply a store
that was closed and is not even a company with 400 employees. Few
persons understand the depth and consequences of the tragedy. We did
not manage to withstand the competitive fight, and could not find
sales markets. As for our market, it is small, technologies are old,
machines are from the Soviet times, and the management is wrong
(the favorite word of our rulers)”, – the letter says.
It also recalls that at the end of 2012, at one of the parliament
sessions, a member of the parliament from ARF “Dashnaktiutyun”
parliamentary faction applied to the government and demanded
explanations regarding the situation in Armavia. They replied: “We
don’t know, we shall clarify and reply in a written form”. “Four
months have passed, but they are still clarifying. Perhaps, this
is their business – to lead the company to bankruptcy. One of the
most important companies of the country, the second after the army,
is being bankrupted but they are not aware of that! Sir functionaries,
perhaps you don’t know that our generation remembers and knows well the
pilots, like the most courageous sons of our people. Not foreigners but
our pilots used to fly to the partly ruined airport of Gyumri at the
first night after the earthquake, and not foreign but our equipment,
engineers and air communicators ensured security of flights. Our
pilots risking their life used to fly to Baku, Artsakh and recently to
Syria, whereas others refused to fly”, – the letter says. The owner of
Armavia, Mikhail Bagdasarov, has started the bankruptcy proceedings,
but the government is silent, as Bagdasarov did not inform them in
advance. “But the aviation does not belong to Bagdasarov or Eurnekian,
it belongs to those who fly and work in it.
What if tomorrow Eurnekian will also bancrupted and close the airport?
What will you say? Will you again repeat your favorite word expression
“wrong management”? This is a private capital and we have nothing
in common with it”,- the letter says. It also recalled about the
bankruptcy of the “Armenian airlines” company 10 years ago, though
there was no financial and economical crisis that time. “Perhaps, you
are the reason of all this, sirs, as you used to make public statements
that you are not going to let foreign companies to raise ticket and
baggage prices. How are you going to make foreign companies not to
do that? You can only forbid these companies to fly to Yerevan. But
in that case, how people will fly?”, – the letter asks.
“The army of jobless people will be replenished by another 400 people,
mainly the last generation of pilots, engineers and airplane flight
chiefs, which got fundamental education during the Soviet times.
Moreover, the state budget will lose about 30-40 mln drams of income
taxes and social payments per year. This means that about 1 million
pensioners will not get their 40 000 drams. As for those 40 mln
drams, they will go to the budget of those states, the air companies
of which will transport our passengers. Moreover, those 400 people
should get unemployment benefit at the expense of other tax payers,
and Armenia’s budget will not gain the sum for the customs clearance of
the air repair parts, the profit tax of which our company had to pay.
Training of an aviation specialist (aviation engineer, aviation
technician etc.) costs at least $20,000, while training of pilots costs
up to $100,000. Armavia training engineers, technicians and pilots
spending huge amount of money on that. Where will those young pilots,
engineers and technicians occur is still unknown. The aviation market
of Armenia totals approximately $800 million annually. The figures
are approximate but the authorities may know the precise ones.
The figures may be higher but not lower. Passengers pay this money
for arrival in and departure from Armenia. VAT makes up 20% of this
amount of money, which is nearly $160 million replenishment of the
state budget annually. The ideal version is when the transporters
of both markets work 50×50. This means that the companies registered
in Armenia must transport 50% of passengers and pay VAT in Armenia,
which is nearly $80 million annually. The remaining $80 million is
annually supplied to the budgets of such ‘poor’ states as France,
Germany, and Russia. Then the Government of Armenia borrows those
funds boasting of low interest rates (1%-6% annual) and on-lends to its
citizens and enterprises under 10%-24% annual interests. Enterprises
go bankrupt, citizens starve amid prosperity of banks and statesmen,”
the letter reads. For instance, the policy of the aviation authorities
of Lebanon prohibiting flights of the Armenian airline, despite the
fact that Armenia underwent audit of the most authoritative European
organizations over the last 6 years. Armenian pilots and engineers are
highly in demand by the world airlines. “It is government that must
fight for the hard-earned niche in the world market of aviation and not
the private companies, because these are international relations. In
the meanwhile, our authorities have been using the phrase ‘open sky’
too frequently recently.” “The countries well-disposed towards Armenia”
try to persuade our officials that this step is right. Actually, it is
deception, as they have already gained our market and try to nail down
their achievement by means of our officials, the authors of the letter
say. They recall that immediately after collapse of the Soviet Union
then head of the Civil Aviation Department of Armenia Yeritsyan signed
an agreement with Russian aviation authorities that can be called
‘Parity of seats’. It meant that Russian air companies had a right
to transport equal number of Armenian passengers to any destination.
Mechanisms were developed and introduced to control over provisions
of that agreement. Then no one flew to Armenia except CIS companies.
“Then our government decided that aviators manage aviation in a
wrong way (our government did not know the word management then). As
a result, a big number of ‘manager specialists’ emerged in the
aviation, among them there were hairdressers and directors of funeral
bureaus. So, we have got a high-ranking aviator that organized debauch
on the board of the plane. Afterwards, the Armenian Airlines collapsed,
and passengers were no longer transported by Armenian airlines, but by
foreign companies, including European ones. It was only after transfer
of flights to Armavia in 2005 – giving proper respect to Siberia
Airline – that in conditions of stiff competition Armavia independently
began gradually regaining our people’s share in the aviation market,
which made up nearly 40%-45% in 2010 in the CIS and Middle East. There
were also European countries Armavia yielded to due to high level
of requirements and stiffer competition. It was necessary to study
markets, passenger flow, open new flows, no one would welcome us so
easily. Armavia lacked force and opportunities, while the government
provided no support to it. On the other hand, Russia and Ukrainian
companies were oppressing up by dumping. One and a half year ago
the Armavia insisted on signing of the agreement on “Parity seats”
between the Armenian Government and Russia. However, that agreement did
not help returning our people’s share, because the document provided
for equal number of flights that could be made by both big and small
planes. In that situation, to win one should have a big aircraft fleet
and big internal market,” the letter reads. The authors of the letter
highlight that customs services are to protect the domestic market,
first. Nevertheless, in Armenia they have turned into a machine to
seize money from enterprises and citizens. “The Government considers
those enterprises as milk cows exclusively. Recently specialists had
arrived in Armenia on the credit funds, taught Armenian specialists
how to upgrade management efficiency, and taught Armenian tax officers
how to collect taxes efficiently. In the meanwhile, those credit funds
could be invested in a small enterprise producing men’s socks and stop
importing them from Turkey. This will allow employing several dozens of
people. What are you engaged in our oppositional and pro-governmental
parliamentarians? Why did we elect you? You eat our bread that was
sown also by Baghdasarovs, Tsarukyans and Sukiasians. You can’t work,
indeed, because your hands cannot bring benefit to the people, you
are too busy with retaining your seats,” the letter reads.