During the year, management control is assigned to AVIANCA Colombia Airlines (Aerovias Nacionales de Colombia, S. A.)

Operations continue apace during 1995-1996. During the latter year, a crisis occurs with the RJ100 fleet when engine problems cause a plunge in dispatch reliability.

Airline employment stands at 430 in 1997 and the fleet comprises 9 leased Avro RJ100s. AlliedSignal and Aero International (Regional) or AI(R) are brought in to provide engine improvements and increased support, helping the Avros to increase their reliability to approximately 97%. Delivery positions are purchased for four B-737-500s.

In October, the decision is taken by AVIANCA Colombia Airlines (Aerovias Nacionales de Colombia, S. A.) to restructure its domestic network. All flights of under 90 minutes are assigned to SAM, leaving the major to concentrate on domestic trunk routes and international services.

In November, services and marketing of both AVIANCA and SAM are placed under the single direction of Vice President Juan Manuel Beltran.

Enplanements for the year total 794,486.

Airline employment remains the same in 1998. In late November, two de Havilland Canada DHC-6-300 Twin Otters are leased from Aero-Century Corporation and are placed into service on the company’s thinnest routes.

Passenger boardings accelerate 26.3% to 1.07 million, while cargo traffic plunges 31.3% to 7.81 million FTKs.

In 1999, the Colombian national economy continues to deteriorate. while problems from antigovernment guerrillas increase. By late spring, the peso has been devalued twice within a year and the demand for air travel further evaporates, particularly after rebels seize an AVIANCA Colombian Airlines, S. A. Fokker 50 in April, taking its passengers hostage.

In the face of this continuing downturn, the carrier elects, during the summer, to return to British Aerospace the fleet of nine Avro RJ100s it has been operating to outlying Colombian cities from Bogota since 1994. The first two planes arrive in the U. K. during September, with the remainder due in February.

Under inspection in England in November, corrosion is found in the wings of the four RJ100s returned thus far. BAe immediately notifies

SAM, which grounds the remaining three. The withdrawal of the regional jets significantly disrupts the carrier’s local services.

Enplanements for this troubled year total 910,000 and 3.89 million FTKs are also operated.

A total of 491 workers are employed at the beginning of 2000, a 14.2% increase over the previous 12 months. Two MD-83s continue to be operated. At the end of the year, SAM and AVIANCA Colombian Airlines, S. A. begin to discuss the possibility of a merger, via a holding company, with ACES Colombia (Aerolineas Centrales de Colombia, S. A.). An arrangement will be struck on March 7, subject to government approval after April 19. After approval, the new holding company will invest $250 million over the next five years to modernize the carriers, which will continue to operate under their current names.

SAMARA AIRLINES (SAMARA AVIALINII): Samara Airport, Samar, Samara Region, 443901, Russia; Phone 7 (8462) 700-909; Fax 7 (8462) 700-960; Http://www. samara-airlines. ru; Code E5; Year Founded 1993. Another new Russian carrier founded in 1993, this company is created at the airport of its namesake city to offer regional and international passenger and cargo flights. Shareholding is divided between the State Property Committee (51%) and private investors.

Samara Avialinii has had a more interesting organizational history than most Russian airlines. Originally established as the Kuybyshev Aviation Enterprise in 1961, it was later transformed into No. 65 Squadron and then into the Kuybyshev Joint Aviation Squadron (KuAO). Its privatization now creates the Joint Stock Company Samara Airlines, or Samara Avialinii.

Mikhail F. Evstropov is named managing director and he initiates flights with a mixed fleet of 5 Antonov An-12s, 13 Tupolov Tu-154B/Ms, 7 Tu-134s, and 3 Ilyushin Il-76s.

Operations continue apace in 1994 as passenger boardings reach 1,052,306.

The company’s 32 aircraft transport a total of 910,300 passengers in 1995, a 15.5% decline. Cargo traffic, on the other hand, accelerates 89% to 24.4 million FTKs.

Flights continue in 1996, as stops are made in 62 Russian and CIS communities, as well as New Delhi, Fujairah, Istanbul, Tel Aviv, and Vienna. In the spring, former Aero Volga Concern Director General Alexander Kozlov is appointed to the same post with Samara.

Enplanements during the 12 months plunge all the way down to 462,160.

Concerned with a growing and unhealthy competition between the nation’s regional airlines and those larger carriers based in Moscow, General Manager Kozlov, in October 1997, hosts a summit of 20 colleagues. The regional leaders draw up an alliance document under which they pledge to work together to develop an alternative hub. Capacity will be shared and Samara will be developed as an alternative gateway into Russia for international airlines visiting the country.

The airline’s customer bookings increase by 12.8% to 530,000.

During the summer of 1998, the alliance of airlines led by Samara start to coordinate their schedules and engage in joint marketing. Plans are made to develop pricing in a cooperative manner and to improve Samara airport.

Passenger boardings fall 29.5% to 461,000.

Airline employment stands at 1,629 at the beginning of 1999.

Under the leadership of new Director General Victor Tchemov, crosstown competitor Aero Volga Concern enters into merger discussions with Samara during 1999. Although government objections are raised, they are overcome by October 21

Passenger boardings inch up 0.4% to 462,000, while 14 million FTKs are also operated. Revenues total $1.13 million.

At the beginning of 2000, the airline’s ownership is divided between the Samara Region Property Management Department (51%), employees (21.2%), Gazinvest (14%), and Samara International Airport CEO Vyacheslav Chernavin (13.8%).

The final union with Aero Volga Concern under the Samara brand occurs on February 14. Samara gains two Tu-154Ms from a once-huge fleet and all AVC employees retain their jobs. Four Samara Tu-154s remain wet-leased to the Iranian carrier Kish Air, along with two Il-76Ts. The long-term arrangement, which provides Samara with hard currency, will be extended later in the year.

The carrier avoids repossession of certain of its aircraft on March 17 when it is found that the Inkombank does not have legal title to the pledged planes.

During the spring, a license is received permitting the company to launch flights from Samara to Tianjin, China, via Abakan. With little demand in Samara, the route is believed to be unprofitable and is not started.

Svyatoslav Lychagin, head of a department in the State Property Ministry, informs The Moscow Times on August 30 that the government is sending a budget to the Duma this week that includes a list of 20 state-owned companies to be sold next year. Aeroflot Russian International Airlines (ARIA), Samara and Siberia Airlines (Sibir) are originally on this privatization document; however, the exact sizes of the stakes to be sold have disappeared from the list after it has gone through final review by the offices of President Putin.

Also on August 30, the carrier wins an exclusive contract to transport personnel to the Baikonur cosmodrome. A Tu-154M is wet-leased to the Hungarian company Atlant Hungary on September 9, effective October 1.

Weekly roundtrips commence on September 12 from Samara to Baku via Surgut and Kazan. On September 21, the board of directors meets to devise a plan to rehabilitate the company’s weak financial situation. Although a profit of 30 million rubles was generated during the first seven months of the year, a large debt remains.

Frankfurt replaces Vienna as the company’s terminus in the Germanspeaking world on October 29, as new Yak-40 flights to that city commence.

During the fall, development continues on the carrier’s interregional network of 17 destinations, which includes stops at Ekaterinburg, Tyumen, Nizhnevartovsk, Chelyabinsk, Makhachkala, Nizhni Novgorod, Astrakhan, Kazan, Balakovo (Saratov region), Minsk, and Kiev. To increase load factors, fewer direct flights are offered. Due to the demand for travel, it is hoped that the addition of a stop at Nizhni Novgorod on the Yak-40 service from Samara to Minsk will increase load factors by 60%.

Also, the idea of flights to China is resurrected in light of the decision by Siberia Airlines (Sibir) to reduce frequencies on its route to Tianjin in favor of Beijing. The decision is taken to inaugurate Tu-134A roundtrips to Tianjin at the end of March as an extension of Samara’s existing route via Novosibirsk to Irkutsk. Contracts are negotiated with several travel agencies in Novosibirsk and Irkutsk to ensure route profitability. Ground handling in China will be provided by a subsidiary of the Chinese government.

Weekly return service from Samara to Frankfurt is resumed on December 1 employing Tu-154Ms.

On December 20, the company joins with BAL Bashkiri Airlines (Bashkirskie Avialinii Aviakompaniya), Nizhegorad Airlines (Nizhe-gorodskiie Avialinii), and Saravia (Saranskiye Avialinii) to form a joint marketing agreement designed to keep open the air routes in the Volga Federal District. The plan is similar to one announced in Moscow earlier in the month by Domodedovo Airlines, Chelai-Chelyabinsk Airlines (Chelyabinsk Chief Aviation Enterprise), Kras Air (Krasnoyarsk Avialinii-KrasAir), and Avia Express Cruise. Details concerning possible joint schedules, tariff adjustments, and fleet combinations are not provided to the media.

The fleet now includes 3 Il-76Ts, 8 Tu-134s, 5 Tu-154Bs, 9 Tu-154Ms, 3 Yak-40s, and 2 Yak-42Ds. As the year ends, code-sharing agreements are signed with Finnair O/Y and MALEV Hungarian Airlines, Rt. By purchasing blocks of seats with the foreign airlines, Samara is able to provide direct connections for its passengers wishing to fly via Helsinki or Budapest to points in Europe, to New York, and even to Tokyo. Arrangements are also completed for the wet-lease for four Tu-154Ms to the Hungarian charter concern Atlant-Hungary Airlines, Kft.

All will be surprised early in 2001 when Director General Kozlov suddenly resigns and is succeeded by Chief Financial Officer Rodion Kovalev.