Air Ukraine finds that its fleet has become largely redundant given current levels of business

Published: 10/7/1999

Part of state-owned Air Ukraine' fleet seems likely to be sold, following discussions between the government and the airline, given that current traffic volumes justify only five or six of the airlines Russian fleet, plus two Boeing 767-200s. Air Ukraine owns 30 planes, including 16 Tu-154s, seven Tu-134s and seven IL-62Ms, although most of these are not in operation or will become life expired by mid-2001. Officials believe that they should therefore be written off and sold. The airline has been in discussion with US Eximbank regarding funding of the two 767s and expects to complete negotiations by the end of the year with delivery in 2000-2001. The airline's business has been in steep decline since 1991 and the government aims to help it survive by writing off some of the company's tax arrears and restructuring the remainder of its debt. Air Ukraine has also requested concessions on airport and navigation servicing charges, as well as a proposal for a protectionist programme to protect it from foreign carriers. According to Vadim Sorokin, President of Air Ukraine, who joined the airline in April 1999 from Ukraine International Airlines, where he was responsible for finance, the company made a profit of UAH 5m ($1.2m) between January and August 1999. As of September 1st 1999, Air Ukraine owed the State Innovation Fund UAH 4m and the Road Fund UAH 3m: the latter being a curious vehicle for road construction and maintenance, funded by a levy on all transport companies.

Article ID: 956