Resignation puts a damper on Russian merger

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Paul Duffy/MOSCOW

The anticipated merger of Russian carriers Vnukovo Airlines and Sibir is in doubt following the resignation of Vladislav Filiov as general director at Vnukovo. The Sibir chief executive had been running both carriers in what was expected to be the prelude to a tie-up.

Filiov spent six weeks at Vnukovo "getting to the know the situation" at the country's largest domestic airline and has returned to Novosibirsk, saying that both airlines now realise what needs to be done if the merger is to go ahead. But, while he pledges that Sibir will do what is needed, he says Vnukovo must address its problems alone.

Filiov highlights Vnukovo's fleet problems and parlous financial state as the areas most in need of attention. Sibir's fleet is fully airworthy, while only 20 of Vnukovo's 58 aircraft are serviceable, making harmonisation of maintenance standards essential.

Financially, Vnukovo has made considerable losses over the past couple of years after engaging in a fares war aimed at combating competition on its trunk domestic routes out of Moscow. Sibir, however, broke even last year, according to Russian accounting standards, despite starting the year three months in arrears on airport charges, fuel and pay. In 1997 - before Filiov joined - it took a loss.

Filiov says that, if Vnukovo overcomes its problems, a merger may be possible by the second quarter of next year. In the meantime, the two carriers will experiment with "joint operation" of certain routes.

• Russia's Aviastar, the Ulyanovsk production factory and manufacturer of the An-124, has sold its 34% holding in outsize freighter operator Volga-Dnepr to Russian insurance company NIK for an undisclosed sum. Volga-Dnepr general director Aleksei Isaiken welcomes the move, saying that, with NIK as a major shareholder, the airline "should be well placed to increase our capital base, and thus to improve our fleet".

Volga-Dnepr has been locked in a row with Antonov of the Ukraine over the upgrade of its seven An-124s, with the airline pressing for a design life extension and Antonov expressing concern over an alleged breach of service-interval requirements and unapproved modifications. Isaiken says the NIK link will aid its plan "to upgrade our An-124-100s and to make them better equipped to meet our customers' needs".