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Volga-Dnepr Group plays down reports of financial problems

RUSSIA's Volga-Dnepr Group has admitted that it is facing tough market conditions but pointed out that it has initiated an optimisation plan, which includes staff cuts

Volga-Dnepr Group plays down reports of financial problems

RUSSIA's Volga-Dnepr Group has admitted that it is facing tough market conditions but pointed out that it has initiated an optimisation plan, which includes staff cuts

20 October 2019 - 19:00

RUSSIA's Volga-Dnepr Group has admitted that it is facing tough market conditions but pointed out that it has initiated an optimisation plan, which includes staff cuts. It said it is not considering a bankruptcy plan.

'As we are in market downturn stage and [the] forecast for next year is not rosy, yes, we are running [an] optimisation and staff reduction programme,' the company stated.



The comments come in response to a Russian media report by ULnovosti claiming that the company was not immediately able to pay employees for September and that it is US$200 million in debt.



The report also said that workers in Ulanovsk had been asked to accept no pay until January and that lenders will consider their options if the situation does not improve by year-end.



In response, the company told London's Air Cargo News that salaries for September have been paid and that it is able to meet contractual obligations with customers and suppliers.



In August, the Volga-Dnepr Group announced that it would restructure its management team after a tough first half year with performance below expectation.



The group, which includes AirBridgeCargo (ABC), Volga-Dnepr and ATRAN, said that its restructuring plan is aimed at quality enhancement, cost reduction and the development of specialist services.



As part of the restructuring, Nikolay Glushnev was appointed the general director of ABC. Chief executive Sergey Lazarev and Volga-Dnepr Group vice president for sales and marketing Robert van der Weg have left their posts.



The group said that the changes come as its three carriers saw cargo volumes drop by six per cent year on year to 2.6 billion freight tonne kilometres in the first six month of the year.



The Ulnovosti report states that there are three reasons contributing to the situation at the Volga-Dnepr Group: Its exit from a military contract with NATO, issues with maintaining the airworthiness of its Ukrainian built Antonov-124 aircraft due to ongoing frictions with Antonov and the loss of expertise within the group.


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