Stavropol Airport reverts to state ownership to reverse spiral downward

Published: 11/29/1999

Stavropol Airport has reverted to state ownership, following a disastrous period post-privatisation that has left the formerly prosperous entity bankrupt. The transfer follows a three-year campaign by the regional administration, led by governor Alexander Chernogorov, to “de-privatise" the airport. At privatisation, the majority of stock fell into the hands of small companies, which failed to invest in the airline. As a result, much of the fleet was either sold, written off or reduced to an inoperable state. The airline has lost all its 11 An-24s. Agricultural aviation has been decimated and all five helicopters sold, reportedly at a mere fraction of their true worth, through “friendly" intermediaries, identified as Mframa Airline and Ark-Invest. The runway is in very poor shape. Funds provided by the regional administration to subsidise the company have been diverted elsewhere. A plan proposed by Mr Russkikh, General Director of the airline, to create an economic free zone evaporated into thin air, while he still managed to gain 5% of the company"s stock in return for the idea. Russkikh is also alleged to have privatised the airline by fraudulent means and against the interests of its employees. The view, expressed in the local media, is that the mismanagement inevitably jeopardised flight safety, leading to an An-24 crash, near Cherkessk in 1997, in which 50 people died, when the aircraft simply fell apart after take-off. The crash investigation revealed disastrous levels of corrosion. Yet, only three months" earlier, the airline had sold an aircraft in good condition, on the international market, to raise cash. Now, Cherogorov has stepped in to secure the state"s interests in the company, introducing measures to protect employees" rights and to rebuild the enterprise. Shareholders can still appeal against the decision taken in June 1999 by the arbitration court. Unless such an appeal is successful, which seems unlikely in the circumstances, the airport will probably share a similar structure to that of Mineralny Vody Airlines, and operate as a state company or unitary company under state control. One of the first tasks facing the regional administration is to find the resources to overhaul the region"s fleet and to revive agricultural aviation.

Article ID: 1135