YEREVAN (RFE/RL)—A Ukrainian investment fund announced the purchase of a 49 percent stake in Armenia’s leading airline on Friday, pledging to help restart soon its commercial flights that were suspended two months ago.

 

Vladimir Bobylev, the chief executive of the East Prospect Fund, pledged to invest at least $30 million in the troubled Air Armenia carrier. Armenian news agencies quoted him as saying that it plans to replace and expand the company’s small fleet of aircraft in the coming months.

It was not clear how much the fund, registered in the British Virgin Islands but headquartered in Kiev, paid for the minority share. It valued Air Armenia at $50 million on its website.

Air Armenia specialized in cargo shipments by air until Armenia’s flagship airline, Armavia, went bankrupt in April 2013, leading to the full liberalization of the Armenian civil aviation sector. The small carrier took over some of Armavia’s flights later in 2013.

Air Armenia halted the flights to a dozen destinations in Russia and Europe in late October as a result of a financial dispute with Russia’s national air navigation service. It accused the Rosaeronavigatsia agency of scaring away its customers with false statements about its outstanding debts. Aviation experts believe that the company also struggled to compete with much larger Russian airlines.

According to Bobylev, Air Armenia is currently undergoing restructuring and should be able to resume flights in March. “I would like our fund to be presented not so much as a new Air Armenia shareholder but as an investor,” the Arka news agency quoted him as telling a joint news conference with Arsen Avetisian, Air Armenia’s director and main official shareholder.

“We have understandings on $30 million [in investments] for the first phase of operations but won’t confine ourselves to that figure,” he said.

On its website East Prospect presents itself as a fund manager specializing in “problematic assets.” Its investment portfolio, estimated at $2.5 billion, mainly consists of mining operations in Ukraine.

Air Armenia CEO Arsen Avetisyan said the airline will resume flights in 2015 March. He said the airline is working now to bring back two its planes which are in Amsterdam for an overhaul.

He said the agreement with East Prospect Fund was signed December 12 and now it owns 49 percent in Air Armenia. The remaining 51 percent belong to the CEO.

According to Arsen Avetisyan, in 2015 the airline will operate five aircraft to make flights to Thailand, China and some other destinations.

In late October, Air Armenia decided to restructure its finances and change the flights schedule after seeing an 80 percent drop in air tickets sales. In a statement in late October Air Armenia blamed the dramatic drop on a ‘panic’ among investors and customers after Rosaeronavigatsia, a Russian federal air navigation service, said the Armenian airline had huge outstanding debts.

Air Armenia began operating commercial passenger flights in 2013 after the bankruptcy and liquidation of Armenia’s national air carrier Armavia.