Months of turmoil see departure of Alexander Krinichansky (700 words)

Published: 1/22/2001

It seem that the saga of the decline of Air Kazakhstan may have closed another chapter with the news that the General Director of ZAO Air Kazakhstan and Air Kazakhstan Group (AKG) Alexander Krinichansky, has been fired, becoming the latest victim of the radical restructuring of Kazakhstan's air transport industry. Krinichnasky has been replaced by 40 years old Yerkin Kaliyev, who while confirmed as General Director of the airline, it is unclear if he also inherits the job at AKG. Kaliyev, a physicist turned businessman who has had a colourful career path including a number of high level government jobs, including running the Kazak railway system and as Minister of Transport and Communications from the end of 1997 until 1998. Kaliyev's lack of airline experience is felt by some to be compensated by the quality of his political connections, speaking some Kazak, having a Kazak name (in contrast to Krinichansky), and being married to the granddaughter of a famous Kazak poet. He is also viewed according to press reports, as being more approachable than his predecessor, and is therefore more capable of pulling together a management team. Sources within the airline however, report the contrasting view that Krinichansky was highly regarded and that the view is being formed that Kaliyev, is a substantially more aggressive personality. For former oil company executive and “retired intelligence officer” Krinichansky, the move cannot have been unexpected. In the last few months, struggling under debts rumoured to be anything between $30-100m. The holding company has done a debt equity swap with Kazkommertzbank that effectively gives the bank 50% of Air Kazakhstan and the balance of the holding to be held in trust by the bank. Other assets such as air transport interests in Atyrau have been lost to the state oil company Kaztransoil's helicopter company Euro-Asia Air. The other jewel in the group's crown, Almaty Airport is also looking increasingly likely to be sold given the warm response to suggestions by the municipal authorities that they would like to take control of the airport. A case helped by the fact that the new $25m international terminal funded by Kazkommertzbank with Kazak sovereign guarantees and the city of Almaty. The separation of the airport from the airline is also viewed as being a positive move by a number of external agencies and by the civil aviation authorities in Kazakhstan, according to comments by Serik Bornabayev Head of the Aviation Committee. In addition the last few weeks have seen the start of state owned Kazakhstan Airlines operating out of Astana with its new Chairman ex minister of Energy Mukhtar Ablyazov leading the development of the airline from its previous identity as Tselina Air Company. For Ablyazov this new post may be something of a reprieve after a period following his firing as Minister of Energy, which saw his associates and business interests under intense scrutiny from the authorities. For Krinichansky the removal may be a relief. Regarded by some as a capable manager dogged by the endemic politicization and corruption of the Kazak public sector, he has seen his empire established in early 2000, whittled a way to almost nothing. Although Kaliyev is quoted as saying that he sees his new role as a challenge, it is unclear in just what respect. He has however said he believes that Air Kazakhstan is severely underutilized and therefore plans to optimize the fleet's operation and bring down costs particularly by sourcing fuel from non-Kazak sources in Uzbekistan. Where fuel can be had at a lower price for higher quality. It is unclear what exactly will be the new General Director's role in running the airline, as the Kazkommertzbank has effective control from its direct holdings and shares held in trust for the government. Kaliyev statements and appointment suggest however, that he is close to the country's largest bank. Kaliyev has also stated that he opposes the building of the new airport at Kapchagia, believing that it is to far from Almaty, 100 kms north of the city.

Article ID: 2311