Evergreen delays resumption of Russian Far East service

Washington DC
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Evergreen International Airlines has postponed its resumption of scheduled all-cargo service to the Russian Far East.

The US cargo carrier says unfavorable economic conditions have forced it to shelve previous plans to resume flights this fall between Russian Far East, Alaska and Hong Kong. Evergreen, however, has benefited from a recovery this year in its largest market, the Pacific Rim.

Evergreen has recorded $8.8 million in profits for the first half of 2002, a dramatic improvement compared with the $22.3 million loss over the same period last year. The carrier credits the turn-around to increased demand for its trans-Pacific airfreight network, which accounts for about 95% of its revenues. Sagging demand for its Asian services last year dragged down Evergreen’s financials, prompting the carrier to seek a federal loan guarantee.

Until last September, Evergreen served four Russian Far East cities – Khabarovsk, Petropavlovsk, Vladivostok and Yuzhno-Sakhalinsk. The carrier operated three weekly Boeing 747 flights into the region, with service to both Anchorage and Hong Kong.

Evergreen must operate flights at least every 90 days to retain its Russian route authority or secure an exemption from US Department of Transportation (DOT) dormancy regulations. Evergreen secured a dormancy waiver early this year to retain its Russian rights through 8 November and had told the DOT it planned to resume service by this date. But the carrier yesterday asked the DOT for an extension of this waiver.

“Conditions have clearly not improved and Evergreen simply is not in a position to resume service on an economic basis in the foreseeable future,” Evergreen tells the DOT. “Nevertheless, Evergreen remains committed to resuming service when warranted by traffic demands and extension of the present waiver will enable Evergreen to accomplish that goal in an orderly and efficient manner.”

With the Evergreen suspension, there are no scheduled passenger or cargo services linking Alaska and the nearby Russian Far East. But industry officials in Alaska say several carriers are exploring establishing new links to exploit the discovery of oil in far northeastern Russia. The officials say energy companies need to fly in infrastructure to support possible exploration efforts in northeastern Russia and the easiest connection is for flights from Alaska given the state’s large oil industry. The new flights may link the Russian Far East with Barrow, a town in the oil-rich north slope of Alaska that has US Customs facilities.