The Moscow city government will take full control of the Atlant-Soyuz airline in the next two weeks, clear its debts, and sign a $1.2 billion aircraft contract in the first quarter, city officials said Wednesday.
The ambitious plans to rescue Atlant-Soyuz from bankruptcy are a small step forward in broader plans to create a new national airline, Rosavia.
But the move might be too late after the Transportation Ministry said earlier this week that it wants to overhaul the Rosavia plans altogether.
A senior City Hall official said Wednesday that the city government would honor Atlant-Soyuz’s previous commitments to lease 30 An-148 planes and 15 Tu-204 planes from Ilyushin Finance, a Russian leasing company.
“A contract to purchase the planes will be signed in the coming months,” said Vasily Kichedzhi, head of City Hall’s department of transport and communication, Interfax reported.
The sales contract for the Tu-204 midrange planes and An-148 regional jets is worth $1.2 billion, he said.
The city controls a 51 percent stake in Atlant-Soyuz and will purchase the rest from private investor Viktor Grigoryev, Kichedzhi said. “We have decided not to make the sum of the deal public,” he said.
Grigoryev became a stakeholder in 2007 when he was director of the Helicopter Service Company, a subsidiary of Oboronprom. He no longer holds the position and could not be reached for comment Wednesday.
Atlant-Soyuz, the official airline of the city government, flies from Vnukovo Airport and has 14 planes, including Boeing 737s, Tupolev and Ilyushin jets and Embraer-120s.
City Hall will clear the airline’s debt by the end of January, Kichedzhi said.
Atlant-Soyuz ran up some 11.6 billion rubles ($392.5 million) of debt by late 2008, a figure that most likely increased last year, said Andrei Rozhkov, a transportation analyst at IFC Metropol, a brokerage.
The airline has operated at a loss since 2006, so the city government will probably pay a symbolic sum for Grigoryev’s stake, Rozhkov said. “The company is practically worthless in this situation,” he said.
Atlant-Soyuz was a main asset to be invested into Rosavia, a national carrier to be controlled by Russian Technologies and the Moscow city government.
Atlant-Soyuz’s debts, however, were a main factor blocking the sides from reaching an agreement about their respective participation. In August, Russian Technologies chief Sergei Chemezov said Moscow must make Atlant-Soyuz financially healthier before its assets could be merged into Rosavia.
Russian Technologies’ assets include those from the now-defunct AiRUnion airline alliance.
Some of Atlant-Soyuz’s debt came from flying passengers who were stranded when AiRUnion failed, and the federal government provided Atlant-Soyuz with 3.9 billion rubles to pay off those expenses.
Another 1.8 billion rubles has been allocated to the airline from the city’s budget, Kichedzhi said.
It was unclear how City Hall planned to pay back the rest. Calls to City Hall’s transportation department spokeswoman Yelena Krylova went unanswered.
Moscow’s apparent readiness to participate in Rosavia with a debt-free Atlant-Soyuz has been undermined by a proposal by Transportation Minister Igor Levitin to revamp the original Rosavia plan. He said this week that Aeroflot should acquire regional airline assets from Russian Technologies in exchange for a 28 percent stake and serve as Rosavia’s strategic partner.
Transportation Ministry spokesman Timur Khikmatov said Wednesday that Atlant-Soyuz’s future development is still seen “within Rosavia” for the time being. “But there are a lot of ideas about the future of Rosavia,” he added.
The issue, which is being overseen by First Deputy Prime Minister Igor Shuvalov, will be discussed at a meeting Jan. 30, he said.