Why "To Make Bankrupt" Chisinau Airport?

Anton SHVETS

Termination of the Chisinau airport concession agreement resulted in numerous legal and technical problems. It seems that the authorities deliberately reduce the value of the asset in order to resell it

Last November, the Court of Appeal made its final decision in a lawsuit between the Public Property Agency and Avia Invest Limited. As a result, the Chisinau airport concession agreement was terminated, and the asset returned to state ownership. This event fueled victorious reports of the current government. Minister of Justice of the day Sergiu Litvinenco called this a merit of the entire Moldovan people, and Maia Sandu promised to continue “reforming the judicial system so that thieves and corrupt officials return all the assets stolen from the state and people, and so that people are convinced that justice can be restored in Moldova.” Though, none of them preferred to remember that the legal proceedings on the “airport case” began under the government of Ion Chicu, and Igor Dodon repeatedly told about the need to return the air harbor to the state. The decision to transfer the airport to concession was made in 2013, on the last day of Vlad Filat’s premiership. The subsequent formalities were settled already under Iurie Leanca with the direct participation of the Minister of Economy Valeriu Lazar. Both these officials, as well as six more people, are still accused in the relevant criminal case. The airport was transferred to private ownership for a period of 49 years and with numerous procedural violations. Avia Invest Limited was registered only 4 weeks before winning the bid and had no experience in providing civil aviation services. At the time of the transaction, the company was 50% owned by Russian owners, Kolomna Plant and Khabarovsk Airport. Avia Invest Limited did not meet the condition of having sufficient authorized capital and predictably did not fulfill its investment obligations in full. In total, the airport concessionaire had to invest over 240 million euros. And there were certain injections, but their main source was an illegal fee of 9 euros collected from each passenger at the Chisinau Airport, which did not meet the investment criteria provided for in the concession agreement. In 2014, the Russian company Komaksavia became the owner of Avia Invest Limited, and the Cypriot company Komaksavia Airport Invest Ltd became its owner in 2016. Both are linked to Russian businessman Andrey Goncharenko. However, authorities have repeatedly claimed that Ilan Sor is the ultimate beneficiary and that the company’s profits could be used to fund protests in the country. One way or another, the return of the infrastructure site to state ownership was a matter of principle for the current regime, especially in the context of changes in logistics due to hostilities in Ukraine. At the same time, the decision to terminate the concession agreement was made by the Public Property Agency back in the summer of 2020 based on the conclusions of the parliamentary commission that worked in 2019 and confirmed numerous bid violations. The special commission also established funding from Avia Invest Limited of the FC Milsami (Orhei) and the Dufremol duty-free chain associated with Ilan Sor. Despite the decision of the Court of Appeal, the legal procedures for the transfer of the facility to state property may drag on until June. At least the government, having spent more than 4 months, has not yet completed the steps to transfer control over the airport and even requested international expertise, which should help to effectively manage the asset. Against this background, a shameful and critical situation is in fact developing in the aviation industry. The popular airport, which was a popular hub between the countries of the European Union and the CIS, especially after the deterioration of Russian-Ukrainian relations in 2014, has become synonymous with constant problems, flight cancellations and companies leaving the market. Of course, the logistics potential of the Chisinau airport was weakened by the reasonable situation, i.e. a decrease in the number of available and used air corridors due to the no-fly zone over Ukraine. However, recent months showed an unprecedented mass cancellation of flights. Meanwhile, the popular Hungarian low-cost carrier Wizz Air will leave our market in the near future. The situation of the Air Moldova state airline is also alarming: two of its three aircraft became unavailable. The problem was solved by leasing three aircraft from European companies. This should compensate for the lack of a fleet and ensure the restoration of regular routes. Another domestic airline, Fly One, incorporated in 2016 under the direct patronage of the Moldovan Civil Aviation Authority by seizing assets and attracting Air Moldova personnel, has also repeatedly canceled its flights in recent months. One of the ultimate beneficiaries of the company in past years was Vladimir Cebotari (via his wife), the Minister of Justice during the reign of Vlad Plahotniuc. Attempts by the authorities to attract another low-cost carrier, the Irish company Ryan Air, to replace Wizz Air, were unsuccessful, despite hints from Economy Minister Dumitru Alaiba. There are attempts to help from Romanian and Turkish airlines, in addition, recently the Polish Lot announced an increase in the number of flights on the Chisinau-Warsaw route to 13 per week. However, all this only reinforces the Chisinau airport as an air harbor of local or regional importance, from which you can fly only through a connection in Istanbul, Bucharest, Warsaw or Italy. The airport is becoming a logistical appendage of larger countries, and they will earn on transit routes and on the movements of Moldovan residents. It seems that the authorities are deliberately bankrupting the company in order to sell it to a new owner as soon as possible. Here, Romanian business may show interest. If the state hurries to give up control over this strategic facility immediately after its restoration, this will only once again confirm the lack of independence in the decisions made. The new owner will easily be able to use the infrastructure facility for the supply of goods, including military goods, if the Americans or Romanians so require.