Sanctioned CargoLogicAir appoints Buchler Phillips administrators

25 November 2022 Consultancy.uk 2 min. read

UK based airline CargoLogicAir has fallen into administration, as a consequence of sanctions against Russia impacting its former Director. David Buchler and Jo Milner of Buchler Phillips have been appointed Joint Administrators of the firm.

Established in 2015, CargoLogicAir (CLA) is a British all-cargo main deck freight airline, headquartered at London Heathrow Airport. After the Global Supply Systems' contract with British Airways World Cargo was terminated in January 2014, CLA effectively became the only British all-cargo airline, absorbing some of the Global Supply Systems staff.

The firm’s Boeing 747 aircraft has operated scheduled and chartered freight services on routes between the UK, Asia, Africa and Americas consistently since then. As of 2020, it employed more than 100 people, and turned a profit of £41 million on turnover of £149million.

Sanctioned CargoLogicAir appoints Buchler Phillips administrators

Throughout 2022, CLA has faced a deepening crisis, however. The company has been rocked by UK Government sanctions, as a result of the Russian military’s invasion of Ukraine. The company has been unable to trade effectively, because its majority shareholder and former director was made the subject of sanctions against businesses deemed Russian controlled following the Russian invasion of Ukraine in February 2022.

Alexey Isaykin is an oligarch who made his fortune amid the collapse of the USSR. The ex-Soviet Russian military colonel conceived of carrier Volga-Dnepr back in 1990 – which he was President of until cutting ties with the business in August. More recently, he had since taken up Cypriot citizenship – something the Telegraph asserted in March, would mean CLA “will not be affected by sanctions on Russia.” That transpired not to be the case, though, and Isaykin resigned from CLA’s directorship, when he was placed on the sanctions list in June.

With CLA left on the list regardless of that, the company sought and was granted licences for minimal continuance of operations from HM Treasury. 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. Now, it has appointed administrators in an attempt to salvage some of its remaining assets.

Commenting on the appointment, 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.”