UPDATE 5: Putin issues professional incompetence warning to transport min

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MOSCOW/NOVO-OGARYOVO, Moscow Region, Sep 27 (PRIME) -- Russia’s President Vladimir Putin has issued a service incompetence note to Transport Minister Maxim Sokolov due to a situation with airline VIM-Avia on Wednesday.

“And I want to tell the minister: I notify you that you are not fully professionally competent. If you cope with this situation fast and effectively, (Prime Minister) Dmitry Anatolyevich (Medvedev) and me will think what to do with this lack of full competence, if you do not cope, we will think as well,” Putin said at a government meeting to discuss the issues of the airline.

Putin also told Deputy Prime Minister Arkady Dvorkovich that he does not pay enough attention to the transport industry: “I want to draw the attention of the deputy prime minister responsible for transport: you are not paying enough attention to this industry, not enough. Maybe, you are overloaded? We have talked about this before.”

Sokolov said at the meeting that VIM-Avia was meeting all criteria of a quality airline. Putin ordered the government to elaborate a more effective legal regulation of the airline industry.

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

On Tuesday, VIM-Avia requested guarantees by the government so it could buy fuel. A source close to the management of the troubled airline told reporters that it asked for 800–840 million rubles of state guarantees to bring back all stranded passengers of charter flights.

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

The source said: “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.”

Several Russian officials said that the situation is under control. Yevgeny Moskvichev, head of the transport committee of the parliament’s lower house State Duma, also said that the ruling United Russia party suggested creation of a reserve fund on the basis of the Transport Ministry to tackle flight delays in the future.

According to the Federal Labor and Employment Service, it received information that VIM-Avia “has again allowed for wage arrears to happen,” and launched an inspection. At the end of 2016, the service discovered wage arrears of 97.8 million rubles to 1,219 employees of the airline; the debt was fully repaid then.

A representative of VIM-Avia said on Tuesday that the company has paid salaries for July and no longer has wage arrears exceeding two months.

Head of the Federal Air Transport Agency Alexander Neradko said it has become clear that VIM-Avia is unable to carry the passengers back to Russia. “Its aircraft were arrested for debts in airports of Antalya and Dalaman in the Republic of Turkey, and in France in the airport of Liege.”

He said that about 38,000 passengers of VIM-Avia remain abroad. “The dates of return vary, including even the end of October. The travelers are mostly in resorts of Turkey and Greece.”

The airline owes 7 billion rubles to six creditor banks, of which Bank Zenit is the main one, Neradko said.

He also said the owner of VIM-Avia asked the agency for help in negotiations with creditors last week. The owner did not show up for a meeting, he and the secretaries of VIM-Avia are ignoring phone calls, Neradko said, adding that the owner is probably no longer in Russia.

He said that the last check of VIM-Avia’s financial report took place in 2016 and showed the company as a well-doing one.

Neradko separately said that the authority is offering to establish a fund insuring the liabilities of airlines. The key Russia’s airlines earlier vehemently opposed the measure “but our life shows that this mechanism is needed.”

(57.5186 rubles – U.S. $1)

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