Moskovskiye Novosti
The AN 24 – an irreplaceable plane
The July 10 An-24 airliner crash prompted Russian President Dmitry Medvedev to rule that this type of aircraft should be phased out. This decision could deprive many of Russia’s northern remote communities of their transport links to the rest of Russia.
“What I said recently about the Tu-134 equally applies to the An-24,” President Medvedev said at a meeting with Emergencies Minister Sergei Shoigu. “Now that we are overhauling our aircraft fleet, I suggest the same approach be taken with the An-24,” Itar-Tass news agency quoted the president as saying.
The president’s words do not mean there will be a total ban on any further use of An-24 liners, Sergei Izvolsky, a Federal Air Transport Agency (Rosaviatsia) spokesman, told MN. In June, following a similar crash involving a Tu-134, the Transport Ministry ordered that only Tu-134, An-24 and Yak-40 planes that are equipped with terrain and midair collision avoidance systems could be used on established routes. Airlines must order and install these systems at their own expense.
“An-24s that have these systems installed before January 1 will be cleared for operation,” he said, adding that the devices make no economic sense because they cost $200,000 to $300,000, while an An-24 fit for operation sells for $500,000 to $600,000.
In Russia, An-24s are predominantly the poor man’s aircraft. They were mass-produced between 1959 and 1979 and totaled about one thousand. Today, airlines operate 99 such planes, mainly to Russia’s northern and eastern scarcely-populated communities.
So far, the airlines are not eager to equip their An-24s with warning devices, a Transport Ministry source told MN on Monday. “The ministry will, of course, ban flights without these systems after January 1. But this will make transport to sparsely populated areas difficult. The An-24 has the advantage of being able to land on dirt airfields. None of today’s modern aircraft could completely replace it,” the source said.
The latest developments, although more advanced in engineering terms, are financially disadvantageous for the An-24. The new An-140 model, developed in Ukraine in the late 1990s, carries too high a price tag at $20 million. It is also produced in small numbers: Samara-based Aviakor plant has manufactured only four planes since 2005.
“In this past decade, the production of turboprop aircraft that seat 30 to 50 passengers and are capable of landing on unpaved airfields has practically stopped world over,” says Vladimir Karnozov, a Moscow spokesman for Flight International magazine. Modern aircraft of this class are only produced by the European ATR company. But its avionics are delicate and unsuited to the extreme weather conditions of the Russian North.
China manufactures the Ma-60 and its modernized version Ma-600. But these are merely pirate copies of the An-24. Other global manufacturers, including Canada’s Bombardier and Brazil’s Embraer, have also moved out of this niche, saying the business is not profitable enough to be interesting. So even abroad, there is no replacement for the An-24.
Moskovsky Komsomolets
“Russian mafia” torpedoes Work and Travel program
The most accessible option for Russian students looking to work abroad during their holidays, the U.S. Work and Travel program, has essentially closed. After a series of scandals, U.S. consular authorities now reject up to 70% of visa applications. The U.S. State Department recently admitted the program faced serious problems, as it “leaves foreign students vulnerable to exploitation.”
Many students see their summer holidays not only as an opportunity to kick back and relax after term-time stress, but as a chance to earn some extra money. They work in cell-phone stores, fast-food outlets and as waiters – with the bravest of them traveling abroad in order to improve their language skills while they earn.
The U.S. State Department’s Work and Travel (W&T) program, enables foreign students to work in the United States from May 1 through September 5 and stay in the country through October 1.
Russian Foreign Ministry spokesman Alexander Lukashevich said that 20,000 Russians took part in the W&T program in 2010.
In the fall of 2010, this popular international program was dealt a serious blow. A major scandal flared up in the United States: the FBI exposed a group of financial con artists, most with Russian roots, who exploited several dozen program participants. Eight Russians were detained on charges of illegally cashing checks in exchange for pay-offs.
Employers often ask the students to sell their taxpayer ID cards which can then be used by anyone. This amounts to identity theft. The perpetrators can then take out illegal loans, open bank accounts and front companies using the IDs.
Late last year, two students who had signed up to be waitresses in Virginia were forced to work as strippers in Detroit. Their passports were confiscated, and they were told to pay $22,000 for travel expenses and documents.
After a series of scandals, the United States was forced to change the program regulation, making it more complicated and increasing the visa processing fees for Russians.
A record number of students have recently been refused visas. According to the Russian Association of Tour Operators, in May, 70% of U.S. visa applications lodged in Moscow were rejected. In comparison, only 2% were rejected in 2009.
Tour operators absolve themselves of all responsibility.
Russian students who had paid to get on the program recently held a protest outside one tourist agency. They were unaware it was not accredited by the U.S. Embassy. The company changed its name and is still offering students the opportunity to work and travel in the United States. Once refused a visa, applicants are barred from visiting the country for ten years – minimum, and getting a refund is often problematic.
Until the U.S. government makes sure the system operates crime-free, cases of fraud will continue. Today, the W&T program offers no guarantees, damages Russia’s reputation and hinders the introduction of a visa-free regime.
Tour operators continue to advertise their services, and since they charge $700, not including flights and visas, it is not hard to see why. For them the W&T program clearly remains very profitable.
Kommersant
Bank of Moscow under scrutiny for risky deals
On Monday, Russia’s Central Bank announced the results of its investigation into the Bank of Moscow’s loan portfolio. Apart from issuing suspicious loans to companies associated with Yelena Baturina, ex-Moscow mayor Yury Luzhkov’s wife, the bank also issued a $1.1 billion loan after the shareholder reshuffle in March.
Businessman Vitaly Yusufov was given a loan for the purchase of 19.9% of the shares in the Bank of Moscow (BOM), supposedly on behalf of state-controlled bank VTB.
The regulator deemed it a risky loan and demanded that BOM increase its loan loss provision. It will also allocate 295 billion rubles ($10.5 billion) for the bank’s financial recovery, nearly as much as the government gave to 18 Russian banks during the recent financial crisis (330 billion rubles).
BOM quotations fell 4.3% on the news, their lowest since December 2008, while the MICEX index dropped 1.34%.
The Central Bank (CB) said that BOM will have to increase its reserves by 212 billion rubles this year.
One of BOM’s risky borrowers is Europroject Investments Global Ltd owned by the bank’s largest minority shareholder, Vitaly Yusufov. Europroject received the $1.1 billion loan at the height of a corporate conflict with VTB this March, when ex-president of BOM Andrei Borodin attempted to stop VTB consolidating a controlling stake in the bank.
Yusufov, the son of ex-Energy Minister Igor Yusufov, borrowed the funds from BOM to buy BOM shares, allegedly acting on behalf of VTB which lacked the required funds. Market players said VTB will control the stake through Yusufov and then buy it out after the conflict is settled.
The parties involved denied that suggestion.
The CB inspection showed that BOM’s loan policy remained risky even after the change of shareholders. After lending funds to three large borrowers, including Yusufov’s Europroject, the bank should have increased its loan loss provisions by 29.5 billion rubles. Overall, BOM was to increase its loan loss provisions by 99.5 billion rubles by June 1. However, had BOM implemented these requirements, its risk per borrower ratio (H6) would have increased to 82.9% of the balance: the admissible level is 25%.
The Europroject transaction also looks suspect because the loan was issued against a bank guarantee, which is only done for unreliable borrowers who take out small loans of less than $1 million, said Alexei Drobot, first deputy chairman of Russian Capital.
“Banks only issue loans as large as this to respected companies, but these deals don’t need bank guarantees,” Drobot said.
Yusufov refused to comment.
VTB is currently in talks with Yusufov to purchase his BOM stake.
Under BOM’s financial recovery plan, VTB is to consolidate at least 75% of BOM shares. It currently owns 46.48% in BOM directly and 17.3% through Capital Insurance Group, in which VTB holds 50% minus two shares.
VTB declined to comment on its talks with other BOM shareholders.
RIA Novosti is not responsible for the content of outside sources.
