Airline remains confident that it can pull back from the brink (486 words)

Published: 9/10/2001

Vladislav Tseslyukevich, Commercial Director of Kaliningradavia, has reported that the company has partially resolved its ongoing problem with the Lithuanian air navigation authorities, concerning debts of $400,000 for overflying the country. Tseslyukevich said that the two sides arrived at a resolution in mid-August, so narrowly avoiding the 1st September 2001 deadline, after which the enclave airline's aircraft would have been refused overflight of Lithuania. Tseslyukevich added that he had agreed an extension of the repayment of the debt with the Lithuanian Air Navigation until 1st November 2001. In the meantime, Kaliningradavia will pay all current charges to Lithuania, at an average cost of $165 per 250km overflight each time. According to Tseslyukevich, the debts relate to a period before the airline was put under temporary management on 12th April 2001, as part of the Russian bankruptcy process. He commented that, since then, the situation at the airline has improved, claiming that: “We are now solvent”. The debts in question date back to 1994 and, according to earlier reports, had been settled at the end of September 1999 by Vladislav Filipenko, former General Director, in an earlier round of disputes between the two sides. The resolution of the overflight dispute remains essential for the carrier, given that its major business involves flights to Russia, requiring an overflight of Lithuania to get from the enclave on the Baltic to Russia proper. Tseslyukevich said that Kaliningradavia's protection under the temporary management would last for one year, with the possibility of a further six months extension to restructure and reach agreement with its creditors, such as Lithuanian Air Navigation and the Minsk Aircraft Repair Plant, which are owed collectively around Rb 130m ($4.5m). He conceded that it is difficult to identify all of the airline's creditors as, in some cases, the debts have been sold on. A creditors meeting was scheduled for 1st September 2001. Tseslyukevich also commented on the reports and statements from Sergey Yashin, General Director of Encor, the spin out from Chelyabinsk Airlines Holding (ChAP), that his airline intended to acquire the carrier. Tseslyukevich confirmed that Encor/ChAP had been present at a creditors meeting, but had to date only acquired 10% ($0.3m) of the company's debt, which did not lead him to conclude that it had acquired the airline as yet. In terms of the potential to increase the holding, Tseslyukevich added that Encor/ChAP would need to acquire most of the airline's debts in order to gain control and he believed that not all creditors would be happy to sell the debt. “There are creditors which are not interested in Kaliningradavia's death”, he said, adding that similar potential buyers existed elsewhere, mentioning Aeroflot, Pulkovo Airlines and East Line. He still insisted that Kaliningradavia did not want to be acquired, claiming that: “We believe we can function independently”.

Article ID: 2740