UK freighter operator CargoLogicAir enters administration
17 / 11 / 2022
UK-based freighter operator CargoLogicAir (CLA) has finally entered administration after sanctions related to Russia’s invasion of Ukraine affected its ability to do business.
The carrier, which at its height operated a fleet of four B747 freighters, had its remaining two freighters effectively grounded in March following the outbreak of the war due to airspace restrictions.
And CLA’s majority shareholder and former director Alexey Isaykin was in June placed on a sanctions list by the UK government.
Soviet-born entrepreneur Isaykin has Cypriot citizenship and was previously president and board member of Russia-based freighter airline group Volga-Dnepr Group.
CLA’s administrator Buchler Phillips Limited said that the company had been unable to trade effectively since Isaykin was made the subject of UK government sanctions against businesses deemed Russian-controlled.
“As a consequence, the company sought and was granted licences for minimal continuance of operations from HM Treasury,” Buchler Phillips said.
“However, it ran into problems operating its bank accounts on a timely basis: the company faced increasing difficulties with its bankers despite having considerable funds in its account which should have left the company solvent.”
David Buchler of Buchler Phillips said: “The appointment of administrators at CargoLogicAir is a very unfortunate, unintended consequence of sanctions generally applied against British businesses perceived as Russian controlled.
“This is a unique British business performing a valuable commercial service to British customers trading overseas, employing British people and paying British tax.”
The administrator said that the 2015-established company was the only British all-cargo maindeck airline and made a profit of £41m on a turnover of £149m in 2020.
The airline’s Boeing 747 aircraft operated scheduled and chartered freight services on routes between the UK, Asia, Africa and Americas and it employed more than 100 people.
In June, the UK government said in its sanctions that Isaykin was – at the time – president and board member of Volga-Dnepr Group, a “Russian transport company with significant air operations that is contracted by the Russian Government to create air bridges that carry critical goods”.
The Russian freighter operator had in April won an “unprecedented” deal with Moscow for the creation of air bridges between Russia and several countries to carry critical goods.
Two weeks after the sanctions against him were introduced Isaykin resigned from his position as a director of CLA.
Meanwhile, Isaykin also reportedly exited his ownership of the Volga-Dnepr Group back in August through a management buyout.
The airline also faced a European Union (EU) airspace ban as part of the bloc’s response to the Ukraine conflict.
The ban came despite the carrier being a UK company with an Air Operator Certificate (AOC) issued by the UK Civil Aviation Authority.
CargoLogicAir was a subsidairy of UK-registered Cargo Logic Holding, which also owned B737 freighter operator CargoLogic Germany.
The German freighter operator faced a similar fate and in May was declared insolvent.
And in late September Cargo Logic Holding was served with a notice for compulsory strike off in two months, unless cause to the contrary was shown.
“Upon the company’s dissolution, all properties and rights vested in, or held in trust for, the company are deemed to be bona vacantia, and will belong to the crown,” the notice said.
Volga-Dnepr UK was also served a notice for compulsory strike off on October 25.
CargoLogic Germany suspended from EU airspace and CargoLogicAir fleet inactive
