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Armavia Bankruptcy Said to be Caused by Faulty Management

Area:

Wednesday, April 10, 2013 - 20:00
Where happened: 

On April 10, Media Center hosted a discussion-press conference on “The reasons and consequences of Armavia’s bankruptcy in the highlight of national security”. Among the invited guests were former chief of RA Civil Aviation Shahen Petrosyan, vice-chairperson of Public Council’s Air Transport Policy Sub-Committee Izabella Muradyan and management expert, economist Harutyun Mesrobyan.    

Summing up the main reasons that led to the bankruptcy of Armavia Armenia’s national airline, the speakers pointed out faulty management and monopolistic position, despite the speculations on the credibility of the bankruptcy process.  

“There are suspicions, of course, on how a company with a ten million US dollar income could go bankrupt. This seems like an artificial bankruptcy,” stated former chief of RA Civil Aviation Shahen Petrosyan.

Management expert, economist Harutyun Mesrobyan added that the sphere of civil aviation has to be under state auspices or at least under state supervision.  

“Such kind of strategic entities are either under state auspices, which is common practice for many countries, especially for those in a state of war, or are regulated with tight control mechanisms,” he said, stressing that in Armenia “suchlike collapses are inevitable, because since the 90s no strategy, strategic directions and respective actions have been developed” related to this field.  

Izabella Muradyan emphasized the adoption issue of air legislation and the need for the legislative regulation of the field.  

She said that yet a year before Armavia turned to the government with anticipation of certain solution to the issues it was facing, but the response was inadequate.

“At this point the most important thing is the passengers’ issue, which has to be discussed by the Public Council and an extra fund must be created to compensate the passengers’ financial damage, which the state would later levy,” the Public Council representative reported.

Full video footage of the press-conference can be found at (link).

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