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Russia's major travel agency Neva halts business

July 16, 2014, 18:29 UTC+3 MOSCOW
With its 24 years of experience on the travel market, Neva was a pioneer in the national tourist business
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People gather in front of the travel agency's office

People gather in front of the travel agency's office

© ITAR-TASS/Ruslan Shamukov

MOSCOW, July 16. /ITAR-TASS/. Neva, a St. Petersburg-based veteran travel agency, announced on Wednesday it was winding out its operations over financial problems.

“NEVA Firm has to announce about the suspension of its activities over its inability to fulfil its obligations to tourists and customers under agreements on tourist product sale,” Neva said in a statement posted on its website.

With its 24 years of experience on the travel market, Neva was a pioneer in the national tourist business.

Up to 20,000 Neva customers who have bought tours but have not yet left for their vacation may be affected, Russia’s Federal Tourist Agency said.

A series of active bankruptcies in Russian travel business started in 2010. Since then, 16 travel companies have quit the market. Their debts under outstanding obligations (when money was received from customers but hotels or travel documents were not paid for) ranged from $60,000 to $600,000.

Neva CEO Maxim Pirogov explained the travel company’s financial problems by “a bad tourist season” this year.

Neva was operating at a loss already at the start of the peak season this year, the chief executive said.

“All freely available funds have been channeled into bringing tourists stranded abroad back home,”

The most numerous tours sold by the company were tours to Greece, Turkey, Spain and Bulgaria.

About 6,500 Russians who have bought tours from Neva are currently staying abroad.

An EBRD fund is among the company’s founders and all the other founders are private individuals, Pirogov said.

The company is headquartered in St. Petersburg where its four offices are located. The company also has an office in Vyborg in the northwestern Leningrad Region, as well as branches in Moscow, Yekaterinburg, Novosibirsk, Kazan and Nizhny Novgorod, and representative offices in Finland, Spain, Montenegro and Turkey.

Neva has a network of franchise agencies (over 150 offices) in more than 40 Russian cities, according to information posted on the company’s website.

The company serviced over 300,000 tourists a year.

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