Alexey Isaikin, the founder and longtime boss of the Volga-Dnepr Group, has withdrawn from the shareholder structure of the company, following a management buyout. The ownership and all commercial activities will be transferred to the executive team currently in place.
Benefiting from the collapse of the Soviet Union and the takeover of AN-124 freighters for little money, Mr. Isaikin started small and, over a period of 32 years, succeeded in creating a globally
respected consortium, offering customers air cargo transportation along with MRO services. Charter flights operated by AN-124F to transport heavy and bulky goods (Volga Dnepr Airlines), and
scheduled flights between Europe and the Far East (AirBridgeCargo), with stopovers in Moscow, formed the basis of his success and allowed him entry into the club of the richest Russians.
Volga-Dnepr was losing money since 2019
However, the happy times came to an end when Putin’s military invaded Ukraine, followed by Western sanctions. From 24FEB22 onwards, Isaikin's aviation empire dwarfed. Since then, the company has dramatically scaled down its activities, but continues to serve countries such as Iran, India, Bangladesh, China, and Vietnam - states that have not sanctioned Russia. Yet, it is more than doubtful as to whether these countries will yield enough money to keep the company afloat, financially. The fact is that the group has been generating losses since 2019, long before Russia's invasion of Ukraine.
Meanwhile, the Russian newswire, Interfax, announced that a speaker of the Volga Group recently confirmed Mr. Isaikin’s resignation, stating that, “after working in the aviation sector for 45 years, [Isaikin] decided to withdraw from the shareholder structure of the Group, and to transfer management to an executive team with unique competencies in international air cargo services.”
Opaque corporate structure
The Group consists of VolgaDnepr Airlines and its linehaul arms, AirBridgeCargo and ATRAN Airlines, all based and registered in Russia. Stakes of 51% in these three legal entities are owned by Volga-Dnepr Moskva LLC, which, in turn, is wholly owned by Netherlands-based Volga-Dnepr Logistics B.V. Until now, the Group’s official parent company was Liechtenstein-based Alpine Prosperity Foundation, which is wholly owned by Mr. Isaikin. According to Interfax, he is now divesting his stakes in all of his foreign assets, including CargoLogic Germany and Cargologic Air (UK), in addition to his ownership in Liechtenstein’s Alpine Prosperity and Gloria 7 S.a.r.L of Luxembourg.
Cargologic Air and CargoLogic Germany are airlines that Isaikin registered as a passport holder of Cyprus. However, in mid-MAR22, the European Aviation Authorities banned their flights upon discovering that Isaikin’s primary citizenship is Russian. The fleet of Leipzig-based CargoLogic Air consists of 4 leased Boeing 737 P2F. It is now in bankruptcy proceedings. CargoLogic Air operated two B747F until their grounding. The only Group member that is still flying is Russian carrier Volga-Dnepr Airlines, which operates twelve AN-124-100s and five IL76TD-90Vs. However, the Antonovs are cut off from spare parts and supplies since the license holder, state-run Ukraine Antonov Airlines, refuses to deliver to Russian carriers.
Moving from Moscow to Abu Dhabi?
Russian media report that Volga-Dnepr intends to lay off almost all of the remaining pilots at AirBridge Cargo and ATRAN, who manned the flight decks of Boeing aircraft – in total more than 200 staff.
Mr. Isaikin’s retreat has fueled speculations that a new round of negotiations on the creation of a joint venture could commence between AirBridge Cargo and Etihad. The intention being to circumvent Western sanctions that have been imposed on him. Neither Isaikin nor Volga-Dnepr have commented.
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