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Major domestic air carrier loses license

Slovenske Aerolinie, the main natinal carrier, had its operating license temporarily revoked by the Civil Aviation Department of the Ministry of Transportation, Post and Telecommunications on November 16.
Department director Juraj Dudík said the firm's unclear ownership structure and other lasting problems that have been mounting since 1995, were behind the government move.
Slovenske Aerolinie (SA) first applied for a license in 1996. Although the company failed to meet elementary criteria for air carriers and did not have a single aircraft, the ministry granted SA a one-year conditional license on December 19, 1996. Dudík explained that the company did little to improve its position as an air carrier and instead pressured the ministry into renewing its license when it expired in September 1997.

Slovenske Aerolinie, the main natinal carrier, had its operating license temporarily revoked by the Civil Aviation Department of the Ministry of Transportation, Post and Telecommunications on November 16.

Department director Juraj Dudík said the firm's unclear ownership structure and other lasting problems that have been mounting since 1995, were behind the government move.

Slovenske Aerolinie (SA) first applied for a license in 1996. Although the company failed to meet elementary criteria for air carriers and did not have a single aircraft, the ministry granted SA a one-year conditional license on December 19, 1996. Dudík explained that the company did little to improve its position as an air carrier and instead pressured the ministry into renewing its license when it expired in September 1997.

"Slovak Airlines representatives are defending their status as a national carrier. However, the ministry has not confirmed this status, which [if proven unfounded] would additionally contradict the Commercial Code, the law on protecting economic competition, and the law on public procurement," Dudík said.

But Pavol Mladý, SA general director, told The Slovak Spectatoron November 26 that "the civil aviation section of the government made an unqualified decision, a decision that our lawyers will fight with strong arguments. We are still flying now, and will continue to do so."

Past mistakes

Dudík explained that Slovak Airlines had received three aircraft from Russia in repayment of a debt without running any public tender, and are currently using the aircraft without a valid lease contract.

"The former government made key mistakes in the past," agreed Jean Charles Bemberg, President of SA competitor Tatra Air. "The first mistake was the decision to accept four passenger aircraft from Russia in exchange for an $80 million debt owed to the Slovak Republic."

According to the "Study on Tourism and Tourism Development in Slovakia" published in June, 1998 by the German firm Stempfle + Associates, Russia agreed to deliver the TU-154M aircrafts "as part of an agreed debt-repayment programme." Three of the planes were awarded to Slovenske Aerolinie and are now being used to operate a twice-weekly route between Bratislava and Moscow.

Bemberg said that the Slovak taxpayer had also been swindled by the choice of aircraft offered by the Russians.

"That was the second mistake," he said. "The choice of the aircrafts was a bad one. The aircrafts are extremely heavy, 20 tons heavier than most western airplanes in fact, and that is the most important aspect, because how much you pay in terms of landing, fuel, and so on, depends entirely on the weight."

Mladý countered Bemberg's disparagement of SA equipment with the statement that "for every negative there is a positive. Our planes may be heavier, but they are the fastest in their class. They can also fly higher."

But Bemberg insisted that SA's Russian Tupolevs were difficult to adapt "to the competitive commercial environment" because spare parts were expensive and difficult to come by. "Those planes are commercially impractical," he said.

Zuzana Wurflová, SA's director of public relations, said simply that "Mr. Bemberg is wrong. Our planes are equipped with modern technology and already meet European standards that do not come into effect until the year 2000."

Mladý added he suspected that Bemberg's criticisms concealed Tatra Air's desire to absorb the aircraft into its own fleet.

Renewed attack

Given the poor quality of SA's aircraft, Bemberg continued, Slovakia had traded an $80 million debt for aircraft worth $15-20 million.

"I was absolutely shocked when I learned of the market value," he claimed. SA Technical Director Miroslav Mészáros responded that the planes were actually worth $16.8 million each.

"Their third mistake was experience," Bemberg continued. "The state run airline, Slovenské Aerolínie, was chosen as the national carrier even though they had no experience in the field and no business know-how."

For the ministry, however, SA's murky ownership structure was a more pressing problem than the nature of the company's aircraft and personnel. "Slovak Airlines had been warned about its serious clashes with the law and related measures, unfortunately without any results," Dudik said.

Mladý said that his company is ready to disclose the names of its owners at the next general assembly and establish for good that SA has Slovak ownership. He also asked why Bemberg was making public statements critical of SA. "I make a policy of never attacking another airline like Bemberg is attacking ours," he said.

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