Armavia collapses after struggling with heavy debts

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Armenian flag-carrier Armavia is to suspend all services from 1 April and file for bankruptcy, after running into heavy financial difficulties.

The decision is a setback for the Sukhoi Superjet 100 programme, for which Armavia was the launch operator, having ordered two. It had been using one Superjet but struggled to finance delivery of its second.

Armavia started flying in 2001 and had expanded to a fleet of 14 aircraft by 2007. But while its owner had invested to support its development, the carrier says that there is "no way" to continue.

"[We have] decided to suspend flights and begin the process of bankruptcy," the carrier states.

Armavia operated a diverse fleet including Airbus A320s, Boeing 737s and Bombardier CRJs as well as the Superjet and Soviet-era types.

Russia's federal aviation regulator, Rosaviatsia, says the airline remains in "significant" debt to fuel suppliers, air navigation services and airport operators in the country.

It has accused the airline of failing to meet payments despite "numerous" negotiations to arrange a schedule.

Armavia owes Rb44 million ($1.4 million) to Moscow Vnukovo airport and another Rb1 million to airports at Krasnodar and Sochi, the regulator claims.

Rosaviatsia adds that some $288 million is owed in airspace charges to the Russian air traffic services.

It is recommending that passengers affected by Armavia's collapse use Russian airlines performing the same routes, but points out that the country's carriers are not obliged to assist because Armavia is not subject to Russian federal regulations.

Armavia received the first customer Superjet in April 2011 after signing an agreement in 2007 to take up to four of the type. The year before, Armavia's fleet had suffered a devastating blow when it lost two of its three A320s - one to a fatal crash, the other to a hangar fire - in the space of a few days in May 2006.

At the time of the Superjet agreement the airline was looking to develop its Yerevan base as a transit hub and even open long-haul services.