Russia's federal air transport regulator Rosaviatsia has released details surrounding the bankruptcy of operator Continent Air Company, which it grounded last week after the airline said it was unable to pay its bills.
A criminal investigation into fraud at the airline has been launched, together with checks on possible collusion of Rosaviatsia officials. Rosaviatsia said it had received a request for information from the Moscow regional investigative committee for transport on 1 August.
A statement on the regulator's website alleges that the airline's general director, named as VP Krasilnikov, siphoned off some of the airline's revenues to fund another company, World Air Leasing, set up by himself and his wife. Krasilnikov is said to have held a 25% stake in Continent.
"According to preliminary information, these actions were carried out without the consent of other shareholders. Thus, a significant portion of the proceeds from the sale of airline tickets [for] Continent Air Company was aimed, in fact, for the purchase of aircraft ownership."
This had led to a deficit in the airline's finances, said Rosaviatsia.
The alleged appropriation of funds had taken place since the last financial audit of the company carried out by Rosaviatsia in April 2011, said the agency.
According to Flightglobal's ACAS database the carrier operated a mixed fleet of Tupolev Tu-154Ms and Ilyushin Il-76TDs.
Source: Air Transport Intelligence news
