Tatarstan carrier announces losses for the first nine months and anticipates a 40m ruble loss for the full year

Published: 12/16/1999

AK Tatarstan national airline has announced losses for the first nine months of 1999 totalling 24.5m rubles($0.95m), compared to 2.8m for the same period in 1998. It anticipates these losses to increase to 40m rubles for the year as a whole. Magomed Zakarzhayev, General Director, attributed the losses to a 340% increase in fuel prices, a 230% rise in air tariffs and a 300% increase in aircraft overhaul costs. He added that, over the first nine months of 1999, total air traffic was reduced by 22.4%, compared to the corresponding period in 1998. The only profitable flight is the route Kazan-Istanbul. This year, the airline has purchased only one aircraft, a Tu-134. The rest of the fleet has used 85% of its life limits and only seven aircraft are in an operable state. Despite the poor results, Zakarzhayev claims that the airline is implementing a programme that should enable it to break even by the end of 2000. The company has invested 13.8m rubles in the overhaul of its fleet and will invest a further 7.6m by the end of the year. It is allocating an additional 62m towards overhaul in the first quarter of 2000. AK Tatarstan is also launching a new weekly route Kazan-Prague on 9th January 2000, using a Tu-134. It expects this route to be more profitable than its flight to Istanbul. In addition, it plans to buy another Tu-134 and one or two Tu-154Ms, which would enable it to fly to Spain. If government support is forthcoming, it could also acquire two Tu-214s to open up routes to China, Egypt and India. Rustam Minnikhanov, Prime Minister of Tatarstan, recently announced that the government would pay for at least one Tu-214. The airline considers that a leasing solution might be feasible. It has already trained its personnel to fly the Tu-214, but concedes that the operation of such an aircraft would be “pretty costly". AK Tatarstan was created in April 1999 by government decree as a state unitary enterprise, alongside Kazan Airlines, Nizhnekamsk Airlines and Begishevo International Airport.

Article ID: 1227