Moreover, the situation took on an unprecedented character when, on April 21, Air Moldova announced the cancellation of all flights for April 22 – 25. Later, after the announcement by the Civil Aeronautics Authority (AAC) of the surprise inspection, another announcement was issued, stating that some of the races would in fact still be carried out.
Our team is still working hard to manage the situation, every flight operated or restored is due to a colossal effort. Next week, the Air Moldova company’s administration will negotiate with potential investors an action plan to overcome the company’s difficulties.
Author: Air Moldova press release – 21.04.2023
How did it get here?
AGORA spoke with the expert of the Institute for European Policies and Reforms (IPRE) Stanislav Ghiletchi, to learn more about the situation in which the airline finds itself, located in a field where innovation and adaptation to new realities matter a lot. According to the expert, the current situation is mainly due to the crisis caused by COVID-19, although the situation has improved, and the field, in general, paradoxically, is in strong growth.
The situation at Air Moldova is difficult and worrying. The COVID-19 pandemic has had a strong impact on the entire world, and the aviation industry was no exception. The aeronautical industry in Moldova was affected to an even greater extent than the global average. If the total number of passengers transported globally fell by more than 60% in 2020 compared to 2019, in Moldova the fall was even more significant – by 69%.
Author: Stanislav Ghilețchi, IPRE Moldova expert
Ghiletchi states that, in his opinion, the departure of Wizz Air from Chisinau led to a decrease in competition at Chisinau International Airport, which, normally, should have led to the consolidation of Air Moldova’s position.
Therefore, the capacity and quality of institutional management is vital for long-term success. At the moment, we do not see any actions that would confirm that there is a leadership ready to rectify the situation.
Author: Stanislav Ghilețchi, IPRE Moldova expert
Employees’ appeal – justified?
Regarding the petition initiated by Air Moldova employees and their appeal to the president Maia Sandu, the expert Stanislav Ghiletchi declares for AGORA that such a gesture would have been justified, if the difficult financial situation of the company was due to external factors or due to obstacles imposed by the state.
However, Air Moldova is privatized, operates in a free industry, and should take financial responsibility independently. The state privatized the company specifically because of the difficulties it was facing – now it would be a huge mistake for the state to take the company back into its management.
Author: Stanislav Ghilețchi, IPRE Moldova expert
At the same time, Ghilețchi claims that, although financial support from the Government could sometimes help companies overcome difficult times, the given solution should be treated as a last resort. In the case of Air Moldova, where the problems are generated more by internal factors than external, the capital infusion from the state budget will not lead to the solution of the problems the company is facing.
The company is on the verge of bankruptcy
According to the petition submitted by the company’s employees, the company is in deep financial crisis. According to them, the bank conditioned the company to increase the amount of the deposit to guarantee the refund of the unused tickets. Thus, a deficit of funds necessary for the company’s activity was formed. This abusive blocking by the bank is financially constraining the company.
Contacted by AGORA, lawyer Augustina Prisăcari, the executive director of the legal company myAVVO, which also specializes in transport litigation, states that according to public information, the situation of Air Moldova is a complex one. The lawyer cited a report from the Civil Aviation Authority (AAC) which mentions that Air Moldova is facing major legal problems, such as disputes with shareholders and delays in the payment of debts, including, we can highlight that it also has arrears with the state budget in size 300,000 MDL.
Based on the legislation in force, the delay of 60 days for the payment of at least one already due obligation constitutes grounds for filing insolvency proceedings. A fact that can also be imputed to the Air Company AIR MOLDOVA SRL.
Author: Augustina Prisăcari, licensed lawyer
However, the company is still not actually in the process of insolvency, facing official financial difficulties, according to its own statements.
Dear passengers, with regret, we are forced to stop operating flights between April 21-25, 2023 due to the lack of financial resources necessary for the company’s activity. Unfortunately, we note that all the effort and actions undertaken by the Air Moldova Team to manage the situation in which the company is, at the moment have not yielded results.
Author: Communicated by Air Moldova – 21.04.2023
What solutions could there be?
According to an analytical note published in March by IPRE, one of the solutions would be for the authorities to focus on the development of Chisinau International Airport, evaluating the airport tax policy and offering new tools to attract airlines.
The indicators suggest that Moldova represents a potential for companies in the aeronautical industry. Therefore, the efforts of the authorities to attract new operators specifically at the Chisinau international airport must be continued, and the efforts to develop other airports in the country – stopped.
Author: Stanislav Ghilețchi, IPRE Moldova expert
The expert gives the example of the Budapest Airport, which lost 40% of its passenger traffic and 50% of its revenue after the bankruptcy of the Malev airline, which had been on the market for 66 years.
But the emphasis of the airport management on the development and attraction of the routes allowed that in just 3 years, the number of passengers crossing the airport exceeded the maximum number recorded during the Malev period. Thus, the authorities should be more interested in citizens’ access to air travel than whether they fly with Air Moldova or not. Authorities must not favor one company over others.
Author: Stanislav Ghilețchi, IPRE Moldova expert
At the same time, the authorities should prepare a plan with concrete actions in the event that the company could enter insolvency or the Civil Aeronautical Authority would suspend its air operator’s certificate.
How passengers should proceed
Therefore, passengers who have purchased a flight ticket are protected by the Regulation on the compensation and assistance of passengers in the event of denied boarding and cancellation or prolonged delay of the flight, approved by the Decision of the Government of the Republic of Moldova no. 836 of November 8, 2012 (Regulation). This Regulation allows air passengers to recover, in addition to the cost of the plane ticket, compensation of up to 600 Euros from the airline company in case of cancellation, flight delay or denied boarding.
Author: Augustina Prisăcari, licensed lawyer
An exception is the situation in which the air transport operator is not obliged to pay compensation if it can prove that the cancellation is caused by extraordinary circumstances, which could not be avoided despite the adoption of all possible measures. The burden of proving that the passenger was indeed informed of the flight cancellation, indicating the precise moment, rests with the air transport operator.
Under these conditions, the passenger must submit a written notification to the Airline company, the Civil Aeronautical Authority and, as the case may be, other authorities or companies, such as the tour operator. In case of a refusal, the person can go to court.
The situation could get complicated if the company were to declare bankruptcy, according to the lawyer, which would entail a much more complex process. In which case the passengers who want to recover their money will have to arm themselves with patience, because the process is long and complex.
If AIR MOLDOVA SRL goes into insolvency, passengers who want to recover their money must obtain creditor status in relation to the company, so that they can validate their claim and have a chance to recover their money. However, the insolvency process can be complicated and can lead to the loss of any possibility of recovering money in the future, therefore we recommend that passengers consult with a specialist to assist passengers during this process.
Author: Augustina Prisăcari, licensed lawyer
We specify that, starting from February 28, the AirMoldova company began to announce almost daily, a series of flight cancellations. In all the releases, the decision is explained by “operational difficulties” and unavailable aircraft.
Privatization with serious deviations from the norm
The former president of the Parliamentary Commission of Inquiry, which examined the legality of the privatization of the state company “Air Moldova”, Igor Munteanu, stated that the process took place with serious deviations from the norm. During a televised show, he stated that a month before privatization, the company had obtained aid from the state in the amount of 90 million lei.
The statements were also supported by the former vice-president of the Parliament, Alexandr Slusari, who, in the same broadcast, declared that the privatization was done through a scheme based on artificial debts, a flawed competition procedure and several dubious financial transactions
The previous Blue Air from Romania
A similar precedent occurred last year, in Romania, when the private airline operator Blue Air announced on September 6, 2022, the suspension of all flights for financial reasons. Specifically, the accounts were blocked by the tax authorities, although the company claimed that it was in the process of negotiating the staggered payment of the fines, the note HotNews.ro.
Finally, on November 17, 222, the Romanian state agreed to procure 75% of the shares of the Blue Air company, on account of the huge debts of the operator for non-payment of taxes, they announced ProTV news.
Finally, in December 2022, Blue Air was nationalized, with the Romanian state announcing that it would sell the 75% share to an investor. Moreover, the European Commission announced that it has launched an investigation into the Romanian state’s decision. At the same time, the company reported debts of up to 250 million euros.
Moreover, the Romanian press writes that the complicated situation of the company was not resolved by this decision of the authorities.
We specify that, on April 20, the employees of the airline operator Air Moldova launched a public petition in which they ask the president Maia Sandu to intervene to unblock the precarious financial situation of the company. They find that the company cannot pay salaries and airport services and is at risk of bankruptcy within days.
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p class=”mb-8 px-6 md:px-0 font-bitter text-s17-l170 md:text-s18-l170 text-c121212″>At the same time, several flights of Air Moldova were canceled on April 19 and 20. These are destinations from and to Ireland, Turkey, Georgia and Italy. Contacted by AGORA, company representatives say that the reasons for the cancellations are the same as previously cited.
