23 Oct 2019 11:10

Volga-Dnepr Airlines cutting staff, mothballing some An-124-100 planes

MOSCOW. Oct 23 (Interfax) - Volga-Dnepr Airlines plans to cut staff and mothball part of its fleet of An-124-100 Ruslan aircraft due to the slump on the air cargo market, a spokesman for the Russian company told Interfax.

"Considering the difficult situation on the air transport market, characterized by a drop in demand, Volga-Dnepr is taking steps to downsize staff and mothball aircraft not needed by the market in order to prepare the company for normalization and subsequent growth of demand for Volga-Dnepr services," the spokesman said.

The An-124-100 Ruslan, which was developed by Ukrainian design bureau Antonov (now Antonov Group), is the largest serially produced cargo plane in the world. Volga-Dnepr has a fleet of eight Ruslans and five Il-76TDs, according to the Federal Air Transport Agency. It is unclear how many aircraft the airline plans to mothball.

Volga-Dnepr and Antonov had a joint venture that operated a common fleet of Ruslans until 2016. But the Ukrainian company pulled out of the venture, warning that once Volga-Dnepr's aircraft reach the end of their service life they will lose flightworthiness and their operation will be prohibited.

However, Volga-Dnepr plans to modernize part of its Ruslan fleet, the airline said on Monday.

Volga-Dnepr completed a program of certification tests of the Ruslan for ADS-B Out automatic dependent surveillance. This will enable the aircraft to continue to operate unhindered on the North American and European markets after the relevant FAA and EASA requirements go into effect in 2020, the company spokesman said.

Volga-Dnepr has also received a flightworthiness certificate from Russia's Federal Air Transport Agency for the modification of an An-124-100 with payload of up to 150 tonnes, compared to the usual 120 tonnes. The company said it plans to modify at least three more aircraft in future.

Volga-Dnepr announced a restructuring of its business in September. The stagnation of the world air cargo market, excess capacity and operating problems "did not make it possible to maintain the profitability of the businesses of group companies," the airline said in a statement. It did not provide details on the restructuring plan, but said it already intends "to return to a strategy of growth" this year.

The regional news website for Volga-Dnepr's home region of Ulyanovsk, ulnovosti.ru reported in October that employees at the airline's local office were not paid their wages for September. The site, citing a source, said employees were asked to write voluntary statements waiving salaries until January 2020. Meanwhile, employees are being laid off in Ulyanovsk, Moscow and international offices.

The site's source attributed this to the airline's financial problems, which arose due to the loss of business flying for NATO countries, the grounding of part of its Ruslan fleet and a 2016 order for 20 Boeing-747 cargo planes. The company took out a loan for this deal and is now using the "lion's share" of its resources to repay it, the source said.

Volga-Dnepr's spokesman told Interfax that "not a single group company" has wage debts, work with creditors "is being conducted on schedule within the contractual framework," and obligations to customers are being met "in full."

Volga-Dnepr is part of the eponymous group of cargo airlines, along with AirBridgeCargo and Atran, that is controlled by its founder and president Alexei Isaikin. The airline, which provides charter air cargo services on An-124-100 and Il-76TD planes, carried 28,600 tonnes in 2018, 24.1% less than in the previous year.