The state-controlled airline is set for a turnaround (517 words)

Published: 2/15/2001

Since signing a restructuring agreement with its creditors several months ago, GUP National Airline Sakhaavia (which returned to state control in January 2000) has been operating in what General Director Oleg Rogalev describes as normal mode despite the poor regional market conditions recently illustrated by the plight of other carriers in the region. The struggling airline revenues have improved substantially with a 70% improvement on 1999 figures, amounting to 550m rubles in revenues for 2000 and losses below the projected 13m rubles. Rogalev considers this gives Sakhaavia one of the best performances in the region's troubled airline sector. Sakhaavia is currently involved in restoring its fleet, with the return of a Tu-154 that has been on lease to Iran and latterly overhauled using the revenues from the lease. The airline is also endeavouring, through additional inspection and maintenance, to make sure its remaining Tu-154s are available for an increased summer schedule. This will involve two additional weekly flights to Sochi and Yekaterinburg - representing a doubling in frequency and keeping the existing schedules on the routes to Irkutsk, Khabarovsk, Novosibirsk, St. Petersburg and Moscow. The airline remains short of aircraft and has decided to lease two An-24s, due for overhaul, to provide more fuel capacity for greater range and higher takeoff weight. The first aircraft is due to be overhauled in March and is expected to start operating out of Yakutsk soon after, on routes to Vilyuysk, Verhnevilyuysk, Suntar, Nyurba and Tiksi (subject to successful route applications). The second aircraft is likely to operate on routes to Blagoveshchensk and Khabarovsk. Flights from Neryungri-Irkutsk and Neryungri-Ulan-Ude are being considered. Towards the latter part of 1999 the airline had to abandon flying to the capital city. An indication of its changing fortunes sees it planning to develop international business by running charter flights out of Moscow, particularly to South East Asia. One of the airline's An-24s, which is equipped for international routes, could be used on flights to Harbin. The Sakhaavia's regional aviation wing, equipped with L-410s and Mi-8s (based at Magan Airport), will start flying under a MChS (Ministry of Emergency Situations) contract in the spring. Some of the Mi-8s are being currently overhauled in readiness to join the five helicopters serviced last year. This constitutes the eight helicopters needed to meet the terms of the contract. The slowness of the 16m ruble upgrade programme, may be down to poor cash-flow because of non-payment by the Ministry of Health of its 15m ruble debt. The L-410s based in Magan will be grounded in 2001. The engine overhaul on the aircraft is possible only outside of Russia, presumably with the original producers in the Czech Republic. $450,000, including customs tariffs, is prohibitively expensive for the carrier. Rogalev estimates the cost as being more expensive than overhauling a Tu-154 at Aviakor. The airline's flexibility has been considerably restricted, as it offered the opportunity to have more viable frequent flights to destinations such as Zhingansk, where five flights a week have been replaced by one using an An-24.

Article ID: 2359