Long Story Short: VIM-Avia case
VIM-Avia was one of the ten largest air-carriers in Russia. Its planes conducted both domestic and international flights. But it only took one week in September for the company to "die". Mikhail Shubin reports on what happened and how the authorities are going to fix it.
WHAT IS VIM-AVIA?
The company was established in 2002 by a Merited Pilot of Russia, Viktor Ivanovich Merkulov. The air carrier’s name is an abbreviation of his full name. In 2004, Merkulov sold 75% of the company’s shares to Svetlana and Rashid Mursekayevs, but remained on the post of the president until his death in 2006. VIM-Avia began experiencing serious financial problems at the beginning of winter 2015 – the bankruptcy lawsuits of the company were filed by Sberbank and VTB, but by the summer, the legal proceedings in question were terminated.
The airline did not encounter any serious problems next year and even increased the amount of carriage. By early 2017, in terms of the number of passengers carried, VIM-Avia was considered the tenth in Russia. In January-August this year, its flights carried 1 million 834 thousand passengers. The main international directions of the company were China, Turkey and Greece. At the same time, VIM-Avia's revenues for 2016 turned out to be small: with a revenue of 17.2 billion rubles, its net profit reached only 89 million rubles. Now, 99% of the company's shares belong to Svetlana Mursekayeva, another 1% belong to her husband.
From 2012 to 2017, VIM-Avia received 34 state contracts, for a total of 450 million rubles. The largest were conducted with the Ministry of Defense for the military air transportation. Overall, there were four contracts amounting to of 342 million rubles. In addition to the Ministry of Defense, the airline's services were mainly used by social insurance funds and pension funds of different Russian regions.
THE NATIVE VILLAGE OF THE PRESIDENT OF TATARSTANIn February 2016, the airline changed its legal address. The main office of VIM-Avia moved to the village called Bogatiye Sabi, the Sabinsky District of the Republic of Tatarstan. The head of this District is Rais Minnikhanov, the brother of President of Tatarstan Rustam Minnikhanov.
The Minnikhanovs father, from 1962 to 1990, headed the Sabinsky logging enterprise. The present head of the republic managed to work for three years on the position of a chief power engineer in the company headed by his father. Then, in 1983, he became deputy chief executive of the Sabinsky District.
According to the extract from the Unified State Register of Legal Entities, the legal address is the Stroiteley Street, 1A in Bogatiye Saby. As found out by IA Tatar-Inform, the company's office is located in one of the rooms of a one-story building, on the territory of the housing and utilities infrastructure. This information is confirmed by the publication Business-Online and the TV channel Rain. The office door has a padlock on it; the sign has already been taken off. At the entrance, there is a tractor with a large trailer. According to the guard, who was on duty at the entrance to the area, no one had visited this office during his shift.
MASS FLIGHT DELAYS
The crisis, which will put an end to the carrier's work, began on the night of September 23. VIM-Avia delayed fifteen flights from Domodedovo, making 2997 passengers wait. The air carrier explained this situation by temporary difficulties caused by the "traditional seasonal decline". At the same time, the Federal Air Transport Agency (Rosaviatsia) stated that the key factor was the company's debts to fuel organizations. By the evening, the delayed flights started to fly out. But the Chairman of the Investigation Committee, Alexander Bastrykin, ordered a pre-investigation check on the situation.
After the incident, the Transport Ministry instructed to resume the work of the anti-crisis unit in order to prevent a failure in the transportation of passengers. It was created in the beginning of summer of 2017, when VIM-Avia delayed 173 flights. The reason for this was the late arrival of the planes, their malfunction and the lack of reserve aircrafts. Then, four administrative cases against the airline and its CEO Alexander Kochnev were initiated under part 3 of Art. 14.1.2 Administrative Offences Code of the Russian Federation (entrepreneurial activities in the field of motor vehicles with violation of the conditions provided for by the license). As a result, VIM-Avia paid a fine of 400 thousand rubles, and Kochnev – 80 thousand rubles.
The company's flight delays continued on the following day, September 24. It turned out that VIM-Avia owed 500 million rubles to Domodedovo Airport, and the latter refused to continue to service the company on credit. Also, the air carrier owed cumulatively the same amount to other airports and fuel suppliers.
The company had no money to pay its debts. The information that VIM-Avia partially repaid the debt to Domodedovo was not confirmed. The air carrier had enough money only to pay for work until September 25. VIM-Avia tried to get 500 million rubles from the state, but failed to. After that, the company stopped conducting charter flights.
It turned out that the carrier owed not only to airports, but also 206 million rubles to its employees – 1.5 thousand people did not receive their paychecks.
The total accounts payable of the VIM-Avia is 7 billion rubles. The main creditor is Zenit Bank. This bank belongs to Tatneft, whose Chairman of the Board is the head of Tatarstan, Rustam Minnikhanov. Zenit said that it will no longer extend the air carrier’s credit.
VIM-Avia’s arbitration cases not so great as well: only over the past year it has become a defendant in cases worth 156 million rubles, for the last ten years the figure is 1.1 billion rubles. The company was sued by metrology centers, Russian airports, air carriers and hotels.
THE CRIMINAL CASE
On September 25, Rosaviatsiya initiated an extraordinary inspection of the air carrier. On the same day, the Investigative Committee instituted criminal proceedings against the management of VIM-Avia under part 4 of Art. 159 of the Russian Criminal Code (swindling on an especially large scale).
On the afternoon of September 27, VIM-Avia’s CEO Alexander Kochnev was summoned for questioning to the Investigative Committee. He was a witness in the case of embezzlement from the passengers by the company's employees. Kochnev’s status in the criminal case has changed already the next day. On the morning of September 28, he was detained together with the chief accountant of VIM-Avia, Ekaterina Panteleeva. They were charged with swindling.
The Mursekayevs, the owners of VIM-Avia, who were also summoned for questioning, foresightedly left Russia on September 26, the day after the criminal case was initiated. According to unconfirmed information, Russia plans to place them on the federal, and then on the international wanted list.
"Yesterday, we talked with the minister [of transport] about this matter. Maxim Yurevich [Sokolov] told me that this company fully met all the criteria [imposed on carriers]. He knows my reaction, I will not repeat it, but I will repeat one part of it: if you worked out such criteria, then what are they worth?" said Russian President Vladimir Putin at the meeting with the ministers.
However, Putin’s reaction was not only mere criticism. The President declared partial incompetence of the head of the Ministry of Transport (disciplinary action – Ed.). The Deputy Minister of transport, Arkady Dvorkovich, was also subjected to the President’s criticism. Putin told him that he paid insufficient attention to this industry. And he added: "Maybe you have too much work as well? We already talked about this".
HOW MANY HAVE SUFFERED AND WHAT WILL HAPPEN NEXT
43 thousand tourists who are abroad fall victims to VIM-Avia’s collapse. According to unconfirmed reports, overall, the air carrier was supposed to transport 190 thousand people – this the amount of tickets sold for the next flights. Some of the people will be transported by VIM-Avia itself, but Rosaviatsia involved seven air carriers to help them out. The whole “rescue operation” is compensated from the federal budget. The costs are estimated at 200 million rubles.
Putin also directly interposed in the situation with the tourists, who cannot get back home. He sent to Antalya two Tu-214 aircrafts of the special flying squadron called Russia. This special unit is subordinated to the President's Executive Secretariat and serves the top officials of the state. The two planes will be transporting the customers of VIM-Avia's from Turkey.
The air carrier will stop its work on October 16. Up to this time, Aeroflot will support VIM-Avia with its own funds. The directive on this was signed by Deputy Prime Minister Dvorkovich. For these purposes, up to 1.85 billion rubles can be spent. Whether the company’s costs will be compensated is unknown.
For the possible reorganization of air carriers in the future, Rosaviatsia proposed to introduce an insurance fee of 10 rubles per passenger. According to the calculations of Agency’s Head Alexander Neradko, this will create a reserve fund of 1 billion rubles, provided that the current volume of air transportation is maintained at 100 million passengers per year.