UPDATE 2: VIM-Avia says needs state guarantees to pay for fuel

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MOSCOW, Sep 27 (PRIME) -- Troubled airline VIM-Avia has asked the Russian government to provide guarantees as soon as possible so that it could buy fuel for its planes, the carrier said in a statement on Wednesday.

The airline has been delaying a massive amount of its flights since mid-summer, and on Monday it admitted it had no money to continue flights and it would have to stop charter flights. The Investigative Committee launched a criminal case against the airline charging its managers with stealing money of passengers. The Prosecutor General’s Office launched an inspection of the airline previously.

“The management of the airline has submitted a request asking (the government) to study a possibility of an urgent provision of state guarantees for payment of fuel for flights to the country,” the airline said, adding that it has to bring back home about 16,000 passengers previously transported to foreign countries by charter flights.

A source close to the management of the troubled airline told reporters that the airline asked for 800–840 million rubles of state guarantees to bring back all stranded passengers of charter flights. On Tuesday, the Federal Air Transport Agency said that Ural Airlines, iFly, Red Wings, NordStar, Pegas Fly, Nordwind Airlines, and Yakutia will help carry VIM-Avia passengers.

“Currently, about 16,000 tourists may be brought back only by the VIM-Avia fleet. The mentioned seven Russian airlines have a deficit of carrying capacities in the necessary directions…State guarantees may help with paying for jet fuel. Transportation time is two weeks, and the cost is 800–840 million rubles,” the source said.

The ruling party United Russia controls the situation with troubled airline VIM-Avia, and all planes of the company will fly according to the schedule starting from October 3 or October 4, Yevgeny Moskvichev, head of the transport committee of the parliament’s lower house State Duma, told reporters on Wednesday.

“The United Russia party is keeping the issue under control. We’ve created a working group led by Minister Transport Maxim Sokolov, and the group unites all companies that are able to help. I would like to say that this issue will be completely solved next week, on Tuesday or Wednesday, and flights will become regular again,” he said.

The Federal Labor and Employment Service said in a statement that it had launched inspection of VIM-Avia after receiving information about wage arrears. At the end of 2016, the Volga Region department of the service inspected the company and discovered wage arrears of 97.8 million rubles to 1,219 employees of the airline.

“According to our information, the employer has again allowed for wage arrears to happen. Currently, the service is conducting control and oversight measures at airline VIM-Avia,” the service said.

Moskvichev also said that the United Russia party suggested creation of a reserve fund on the basis of the Transport Ministry to avoid cases of massive flight delays in the future. “We think that we have to create a reserve fund at the Transport Ministry to avoid these situations in the future and to provide conditions for passengers abroad, and catering to passengers who are waiting for more than four hours in airports,” he said.

The party will also consider why banks continue financing companies that demonstrate financial stability but actually have huge debts.

“We would like to discuss the problem with the Federal Air Transport Agency. We want to look at it and say that we are ready to increase their powers through regulatory acts if it is necessary for them to be able to test stability of airlines in, let’s say, the month of May, when the season starts,” he said.

(57.5186 rubles – U.S. $1)

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