Russia's Far East carrier Dalavia has ceased operations citing fears of going into bankruptcy.
The company suspended, as of 17 September, selling tickets for all of its flights "to avoid defaulting on obligations before passengers".
"This entails halting our operational activity," says Dalavia general manager Valery Chichilimov, indicating the decision was approved by the board of directors.
"We've made it because of our severe financial situation and a threat that it could force the company into insolvency," he adds.
In a related move, Vladivostok Avia has taken over the carrier's route rights and begun performing flights on these routes under its own code. Besides, it will stand proxy for Dalavia in financial issues.
Since last year Dalavia has suffered losses of Rb880 million ($35 million) ascribed mainly to a 44% rise in jet fuel costs.
Chichilimov also cites intense competition from domestic airlines that deployed more fuel-efficient western built aircraft on Dalavia's premier Khabarovsk-Moscow route.
"As a result, our share of this market has shrunk to 40% from 70% last year. We've carried 24,000 less passengers and lost Rb312 million in potential sales revenue."
Five Tupolev Tu-214s twinjets constitute the backbone of Dalavia's fleet. But Chichilimov admits that drawbacks in maintenance and parts supplies put a brake on their operability: "Therefore, we under-utilized two to four of these aircraft."
Source: Air Transport Intelligence news
