US COMPANY, POLAND SET AIR CARGO VENTURE

US COMPANY, POLAND SET AIR CARGO VENTURE

A Michigan company and the Polish Air Force are launching a cargo feeder airline that eventually will move goods into Central Europe and the Commonwealth of Independent States on military cargo planes built in Russia.

Air Batory, named for a 16th-century Polish king, will base its cargo operations in Krakow, Poland, where Poland's Air Force houses its fleet of Russian-built planes, according to Joe Pratt, president of Consolidated Ventures Inc. (CVI), the Ann Arbor, Mich.-based partner.Although Air Batory has been offering only charter cargo service since January, the airline envisions regular routes from Krakow to other cities in Poland, and eventually to other points in the former East bloc.

The company also is building a cargo base in Krakow, Mr. Pratt said.

Later this year, Air Batory plans to launch a passenger feeder airline out of Warsaw throughout Poland. For the passenger service, Air Batory plans to

purchase U.S.-built aircraft and will employ some American aviation executives, Mr. Pratt said.

As with the cargo service, the airline hopes later to offer connections into Central and Eastern Europe and the commonwealth.

"Our second phase is to hook in other countries of the former East bloc and the CIS," Mr. Pratt said. "We've had negotiations in the (former) Soviet republics. We've been into Russia, Ukraine, Uzbekistan . . . But the CIS group is three to five years away."

One target destination for Air Batory is Ukraine, because passengers and cargo now must go into Moscow and then fly back to Kiev, according to Andrew Tokarz, a broker/dealer in Chicago who is marketing the airline to potential investors.

Air Batory's service is aimed at filling a void created after LOT, Poland's national airline, cut back its domestic service. A spokeman for LOT in Chicago said the airline offers only limited flights within Poland.

"The demand for service lies in the areas of air freight, express mail and passenger service, all of which are now inadequately serviced by means of ground transportation," the summary said.

Air Batory's cargo operations also will act as an inter-line connection with major trans-Atlantic carriers that are bringing goods into the country, officials at Consolidated Ventures Inc. said.

CVI, based in Ann Arbor, Mich., and its CVI Poland subsidiary are newcomers to the aviation business.

Traffic between the United States and Poland has been on the rise as the former East bloc moves toward a market economy. LOT, with a new hub facility in Warsaw, is expanding service from Chicago - which has a large Polish- American community - and Eastern Europe.

The company, which also has joint ventures in hotel and housing developments in Poland, was approached by the Polish Air Force to help privatize its military air transport division, Mr. Pratt said.

"We then brought specialists in aviation to the table," and negotiations began in the spring of 1990, Mr. Pratt said.

Since 51 percent of Air Batory is in Polish hands - including the Artwoj Foundation that is privatizing the Air Force assets and the Krakow Foundation - the airline retains the landing, refueling and other rights of the Polish government.

CVI owns 10 percent of Air Batory and is offering another 39 percent to potential investors through a limited partnership.

The cargo operations use the Polish Air Force's fleet of one Russian-built AN-12 plane and 11 Russian-built AN-26 craft. The service uses Polish Air Force pilots, maintenance and ground control crews.