Armavia Airline Goes Bankrupt

0
0

YEREVAN (Bloomberg) — Armenian businessman Mikayel Baghdasarov’s Armavia, the country’s only airline, declared bankruptcy last week and ceased flights on April 1.

The company, founded in 1996, was unable to pay debts owed to the Zvartnots Airport and to its contractors, Armavia said in a statement to the press. According to Baghdasarov, the total debt was close to $50 million.

Europe’s debt crisis has curbed travel and made governments reluctant to aid airlines amid the region’s deepest cost cuts in a generation. Hungary’s Malev airline folded in February 2012, while LOT Polish Airlines said last week that it needs to institute a “painful” cost-cutting program to stay afloat. Aerosvit, Ukraine’s biggest private airline, filed for bankruptcy in December.

Armavia’s owners said they have been diverting funds from other businesses to fund the airline for the past three years.

Armavia had 14 aircraft and was the first operator of Sukhoi’s Superjet 100.

 

Get the Mirror in your inbox: