UPDATE 5: Government not to support VIM-Avia – minister

(Provides details in paragraphs 16–17, 19–20)

MOSCOW, Sep 26 (PRIME) -- State support to troubled Russian airline VIM-Avia after it has stopped charter flights is useless, Transport Minister Maxim Sokolov told reporters on Tuesday.

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.

“State support is senseless now that the company has almost completely stopped its activity. But we need state support in the situation (of bringing back stranded tourists). An emergency response center is already working on proposals how to solve it, and will submit them to the government through the Transport Ministry,” Sokolov said.

The ministry is studying all possible options of helping the company, he said, adding that the ministry has a list of airlines ready to help in bringing back Russian tourists from resorts, including Greek air carriers.

The Association of Tour Operators of Russia (ATOR) has asked the government to interfere and help solve the situation with insolvency of troubled airline VIM-Avia, whose debt exceeds 500 million rubles, the association said in a statement on Tuesday.

ATOR said that preliminary estimates show that VIM-Avia had undertaken obligations to carry 200,000 passengers until the end of the summer season, including 100,000 Russian tourists. “Suspension of activity of the airline will stop these flights, which will lead to collapse of the touristic and aviation markets and will in turn inflict significant reputational damage on the government and companies of the touristic market and end up in widespread discontent among citizens,” the statement said.

Deputy Transport Minister Valery Okulov told reporters that speaking about air operator certificate revocation is too early.

“It is definitely too early to speak about (revocation of the air operator certificate), as the agency has only just started an unscheduled inspection…They expect to receive results very fast, right now they expect them in a week. So far they plan to receive some results at the beginning of the next week,” Okulov said.

“The figures (of the debt) are floating. Initially, they had about 500 million rubles of debts to the Domodedovo airport, now the figures are different. Our major goal is to understand the scale of the problem. They have not requested any amount (of state guarantees), it is currently being negotiated, we have not received an official request yet.”

The tour the association said that tour operators will be unable to return so many tourists to Russia, as they have already paid for all VIM-Avia’s charter programs and cannot find at least U.S. $10 million more to pay for the flights for a second time.

ATOR sent a letter to Deputy Prime Minister Vitaly Mutko asking the government to interfere in the situation in order to avoid a crisis on the touristic market. The association is also ready to help to work out measures to prevent these situations in the future.

The Federal Tourism Agency said in a statement that it had set up an emergency operation center for bringing clients of VIM-Avia back to Russia. But the agency will be unable to use the money of the tourist support association Tourpomoshch created to help people if tour operators fail to fulfill their liabilities, as only the airline is responsible for the current situation.

Head of the agency Oleg Safonov told PRIME that VIM-Avia’s charter flights suspension hurt many tour operators, including Intourist, TUI, Mouzenidis Travel, Coral Travel, and others. The agency plans to calculate the exact figure on the affected tourists later on Monday.

He also said that the stranded tourists will be brought back home in two days, when the flight schedule of carriers that are ready to transport the passengers of the troubled airline are adjusted. There will be no collapse of the tourism market, as the Transport Ministry, the Federal Air Transport Agency, and the Federal Tourism Agency are all working on bringing back the tourists.

Vnukovo International Airport said in a statement citing Board of Directors Chairman Vitaly Vantsev that VIM-Avia will use the Vnukovo airport instead of the base airport of Domodedovo until all passengers have been transported.

The Federal Air Transport Agency said that Ural Airlines, iFly, Red Wings, NordStar, Pegas Fly, Nordwind Airlines, and Yakutia will help to carry passengers of VIM-Avia.

The agency also said that around 200 million rubles will be allotted from the federal budget to the airlines that will carry Vim-Avia’s passengers on regular flights.

A representative of Azur Air, Russia’s largest charter airline, told PRIME that the company will take part in transportation of passengers of the troubled airline. “We are currently analyzing possibilities for transportation of VIM-Avia’s passengers, today we’ve carried out two flights, and we plan to carry out two more tomorrow,” the person said.

VIM-Avia’s passengers from Turkey will be carried by Royal Flight and Azur Air, the Federal Air Transport Agency said.

Greek airline EllinAir said it was ready to carry Vim-Avia’s passengers using its own funds.

(57.5660 rubles – U.S. $1)

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