Mulling possibility of arbitration appeal to Iran for compensation - CEO of UIA
An exclusive interview of CEO of UIA Airline Yevhen Dykhne for the Interfax-Ukraine news agency
Text: Dar Hryschenko, Dmytro Koshovy
- The Supreme Court of Ontario ruled to pay the relatives of the six victims of the UIA plane crash about $ 78.7 million plus interest. How can this affect the situation as a whole?
- It is difficult for me to comment on what is happening in Canada, to what extent this decision is final, whether it will be implemented ... It's hard to judge. Lawyers will certainly be able to better assess the situation. We live in the situation in which we live. All passengers and all crew members were insured, the families of the victims received all the first insurance payments. The second payments are part of the assessment process between the insurance company and the families regarding the extent of the damage caused, because this damage, as defined by insurance legislation, can be assessed differently depending on the composition of the family: whether the deceased was a breadwinner, whether he had dependents, etc.
This process is long, and in all countries it takes a long time, but it is going on. We control how this happens. We believe that all the issues will be resolved in relation to the relatives of both the deceased passengers and the deceased crew.
- How exactly are negotiations with Iran going on compensation for the cost of the plane? Has Iran started returning funds?
- As for the compensation to the lessor, the owner of this aircraft, it has already been settled, there is no more dispute there.
As for the damage caused directly to UIA, experts are now assessing its size, and we are considering the possibility of arbitration in order as a company to demand compensation from Iran. UIA, with its specialists, experts in the field of aviation, participated in almost all the meetings between the governments of Ukraine and Iran. The last meeting took place in June, there were no more of them. It is difficult to say how much progress has been made on this issue.
- The Foreign Ministry of Ukraine claims that progress is not great.
- Alas, not great. When people turn to us for an expert opinion, we are interested in participating in all negotiations. We've also prepared a very serious document - comments on the technical report of Iran, which was posted on the websites of IATA and the Iranian State Aviation Administration. There are comments from all institutions: the Security Service of Ukraine, the Prosecutor's Office, the National Bureau of Air Accidents Investigation of Ukraine (the authority that conducts investigations into air crashes from the Ukrainian government).
We are forced to state the fact that the investigation itself in Tehran was carried out with insufficient quality, while, according to international law, no one except Iran has the right to conduct this investigation at the site of the disaster. The prosecutor's office is seriously aimed at continuing the criminal case against, as I understand it, the Iranian authorities, the military authorities, etc. on this issue and establishing criminal facts in this catastrophe.
The process, unfortunately, is not supported by Iran's goodwill and, accordingly, will go against their wishes. Let's hope that the common will of Canada, Sweden, Ukraine - the entire coalition will be enough to politically apply the necessary pressure.
- Do you need more trips of Ukrainian specialists to Iran to continue the investigation on this issue? And can this be somehow organized in the current situation?
- There is no point in traveling to Iran. Not so long ago, we organized a trip for the families of the deceased crew members to the crash site, which they visited for the first time in two years, and from their words I know that there is no crash site as such, everything has been cleaned up. It's just that there is a geographical place where it happened, the Iranian government installed some kind of memorial sign here. But there is nothing left to investigate at the very scene of the incident.
How do we, as an airline, plan to honor this tragic event? Kyiv gave us a site in a public garden in the Dniprovsky Hay (a small forest), which we have already partially landscaped. Trees have been planted there according to the number of dead passengers and crew members; in the spring it is planned to build a symbolic memorial. Now this place is already landscaped. And on January 8, we plan to invite there everyone who is ready to honor the memory of this tragic event, including representatives of the government and relatives of the families of the victims. Many of our workers who carry this pain in their hearts will surely come. We will continue to look after this park and support it as a place of memory.
- Iran avoids negotiations with the international coordination group on compensation for damage to the UIA aircraft. The Foreign Ministry noted that the coordination group will have to seriously consider other ways of resolving this issue within the framework of international law. How will UIA react if Ukraine files a claim with Iran at the UN International Court of Justice?
- This is a government decision. It's hard for me to judge, but I think that any pressure that Ukraine can exert on Iran in this matter plays an important role.
After there was no fair solution to this disaster, we cannot say that the skies over Iran are safe for civil aviation. That is, Ukraine, taking into account this catastrophe, firmly estimates the sky over Iran as unsafe. None of Ukrainian airlines fly there and there are no plans to fly there. Therefore, maybe, at least by increasing legal pressure, a fair decision will be reached, there will be compensation for the country, the relatives of the victims, and the issue will be settled. This is important for civil aviation. Therefore, we welcome any attempts by the state to move forward on this issue.
- In fact, shortly after the Iranian tragedy, you received another blow - the beginning of the pandemic and an almost complete stop of air traffic between the countries from 2020. Airlines had to pay large amounts of compensation for canceled flights. Have you already settled with your clients on this issue?
- We, of course, did not have the opportunity to immediately pay our passengers all the tickets they had not used. But for almost a year and a half, they paid more than $ 55 million in money for unused tickets. At the same time, we also issued a huge number of flights to passengers with vouchers with an additional bonus of 25%, and in most cases they were already used on flights.
- If to take a percentage, how many of your customers chose a voucher, and how many – payment in cash?
- In total, during the pandemic in 2020-2021, UIA issued refunds for passengers for a total amount of about $ 57 million with "real" money. At the same time, vouchers (promotional codes) were issued for about the same amount, taking into account a 25% bonus. That is, in proportion over 60% of refunds were actually issued in cash. At the same time, the lion's share of promotional codes has already been converted into tickets, but not all of them are used for the flight.
Today I can honestly say that my conscience before our passengers is clear. We really fulfilled all obligations. If there are any unfulfilled ones, then these are already processes of later cancellations, etc., but we will definitely execute them. After all, we have already proved to our passengers that we fulfill all obligations: either in the form of money (albeit later), or in the form of vouchers that can be used for other flights.
It is due to the fact that the calculations were carried out for a long time, that we were slowly able to practically "wash" $ 55 million out of the circulating assets and at the same time not "kill" the company. But it is still very difficult for us, so at the moment UIA needs to resolve financial issues to support the company in the winter.
- And what about the staff now? How much has these two years of the pandemic changed your approach to personnel policy?
- In the aviation world, people are the most valuable asset. I don't even know in what other businesses people are such a valuable resource. After all, aviation competence is learned for a very long time and is expensive.
We regret that we were forced at a difficult time in 2020 and 2021 to carry out such a massive layoff, having reduced the staff by almost 40%. Before the pandemic, we had about 2,600 people, but due to the crisis provoked by COVID-19 in the aviation market, we had to reduce the staff to about 1,600 people.
However, we keep in touch with all our dismissed pilots and flight attendants, we know where they are, what they are doing. These are people who left the company not voluntarily, but they probably retained a certain loyalty to the company. And as soon as we begin to increase the volume of traffic, build up our fleet, first of all, we will begin to return these people as well. We are confident that the company will be able to return most of the employees who grew up in the company and are trained in the procedures for working at UIA, especially the young copilots.
This question is very sensitive and important for us. And we want to get back to growth as soon as possible so we can start getting our people back to work.