"Armavia" suspends all flights and starts bankruptcy procedure

YEREVAN, MARCH 29, ARMENRPESS. Armenia's national air carrier"Armavia"air company made a decision to suspend the flights starting from April 1, 2013. The air company informed "Armenpress" that during the last three years the owner of the company implemented funds from other enterprises belonging to him aimed at the development of the Air Company. The situation became very complicated and hence, a decision was made to suspend all the flights and start the bankruptcy procedure. "Armavia" Air Company expresses its gratitude to the whole its passengers, whom they worked with for 12 years.

Artyom Movsisyan, Head of Armenia's General Department of Civil Aviation told the reporters that "Armavia" air company currently does not possess necessary financial means to postpone and commit obligations undertaken by the state. Among other things he noted: ''I think, a final decision will be made in the nearest future. The agreement expires on April 22 and let us hope the final decision will be made by that scheduled time. Currently an intensive discussion is ongoing in the Government; civil aviation is not the single body responsible to make a decision.''

The Armavia Company was established in 1996, but commercial flights to Russia and Turkey only started in 2001. In 2002, a strategic alliance was set up with the Russian airline S7 Airlines which purchased 50% of Armavia's shares from the "Chernomoravia" company under the name of the "Aviafin" company registered in Armenia but which belongs to the leadership of S7 Airlines as natural persons. Later, it bought an additional 18% of shares from Mika Armenia Trading company owned by prominent Armenian businessman Mikhail Baghdasarov. An investment contract between S7 Airlines and Armavia was signed on 14 March 2003, at which point 68% of Armavia's shares were owned by S7 Airlines, and the remaining 32% by Mika Armenia Trading. In 2003, Armavia took over a part of the bankrupt Armenian Airlines' flights. In 2005, Mikhail Baghdasarov's Mika Armenia Trading bought S7's 68% of shares and became Armavia's principal shareholder with a 100% stake in the company. In 2005, the airline transported 513,800 passengers with over 550 people in its personnel. The turnover for 2005 amounted to roughly $90 million. In 2007, the airline transported 572,300 passengers by regular and charter flights, which is a 21% increase compared to 2006. On April 21, 2011, Armavia became the first airline to fly Sukhoi Superjet 100 from Yerevan to Moscow.