News / State control looks to be next step for struggling Volga-Dnepr

Russian air cargo-carrier Volga-Dnepr looks likely to end the year in the hands of the state, with suggestions that owner Alexei Isaykin made the decision to give up the company to mitigate any penalty emerging from a lawsuit from the prosecutor general.

Reports began to circulate in the media this week that Mr Isaykin had told employees of a probable transfer during celebrations for the carrier’s 35^th birthday.

“There are opportunities for Volga-Dnepr with the state, as confirmed by a partnership with the Moscow government, and if the homeland says the company should serve the homeland, then that’s all: nationalisation, confiscation, fair deal, any form,” he said.

While Mr Isaykin did not reference the pending lawsuit against him, sources familiar with the matter told The Loadstar it was almost certainly “decisive”.

One said the transfer of Volga-Dnepr would, “hopefully”, allow Mr Isaykin to avoid prison, while another put the breakdown in the relationship between the airline owner and the government more bluntly: “Better than a visit to a 10^th floor window, I imagine.”

For employees, the looming transfer appears not to have come as a surprise, with Mr Isaykin and former co-owner Sergey Shklyanik having fallen foul of the state.

Sources told Kommersant that management had been discussing the possible transfer following a winter raid by authorities on the group’s offices and Mr Shklyanik being “called in for conversations” by an investigative committee.

This latest development follows the Arbitration Court of Moscow’s June approval of a request by the prosecutor general to transfer Domodedovo Airport into state hands.

That decision was made after a supervisory authority accused the Moscow gateway’s former owners of being under the control of foreign powers and having ‘violated strategic interests’.

As far as Volga-Dnepr is concerned, it cannot be discounted that the decision has been made in part due to its struggling financial situation.

Not only contending with a loss of volumes from being shut out of the western world for more than three and a half years, it has also struggled against an increase in competition from Chinese airlines, and there are suggestions the airline is now in “systemic crisis”.

Last year’s figures noted a year-on-year decline of 7% in carryings, to 202,000 tonnes.

As for Mr Isaykin, The Loadstar reported earlier this year that he appeared to be “caught between a rock and a hard place” after having to remove himself from the carrier’s board after being sanctioned by the UK government in 2022.

That followed in the wake of signing a deal, reportedly forced upon the airline by President Putin, to carry some 20,000 tonnes of Russian state cargo.

But in the three years since that deal, Mr Isaykin has seemingly lost the backing of the state, with one Russian air cargo expert telling The Loadstar “he brought it on himself with the Moscow deal”, adding “if you play with fire you will get burned”.

Despite their subdued response to the news, there is concern among the carrier’s 1,500 or so employees over the carrier’s future, with some already on the job hunt.

Sources told Russian media “the company has no market value, and it will be difficult to find a buyer on the commercial market”, leaving the government the obvious choice to take it over, having worked with it in the past.

Sources said: “It is important that these people are guaranteed the safety of their jobs.”