Russia’s government commits to protecting airlines from bankruptcy

Russian airlines traffic numbers slumped by 26.6 per cent in March, the first month of the on-going Russian air travel market downturn following the Coronavirus pandemic (Leonid Faerberg / Transport Photo)

The Russian government is to take measures to prevent bankruptcies of the nation’s vulnerable airlines that have lost their revenues to the on-going Coronavirus crisis, Maxim Reshetnikov, the country’s minister of economic development has pledged. “Airlines’ demand has shrunk,” he says. “They’re not flying and have no revenues and we may end up losing the entire industry – which the state has been developing and supporting all these recent years – and which we’ll need in several months anyway,” he adds.

“We can’t let bankruptcies happen, and we’ll make decisions,” he told the state-run Rossiya 24 TV broadcasting company. He also confirmed that the government is ready to support those companies that are listed on the ‘strategic’ register.

“We are analysing how one enterprise or another appears sustainable under different scenarios [to discover] if it is capable of keeping its current working staff levels – and if we discover that a company and its owners and its creditors which offer loans, and all the other ways of stabilising the situation have been exhausted, then the state, the federal authorities, will interfere,” Reshetnikov explained.

The list of strategic enterprises filed by the government commission for sustainable development of the Russian economy includes 646 companies which will be monitored closely and which may then count on priority state support in the Coronavirus turmoil. Seven airlines are on the 2020 strategic register. They are Aeroflot, S7 Airlines, Rossiya Airlines, Pobeda, Ural Airlines, Utair and cargo specialist Volga-Dnepr which, along with its AirBridgeCargo and Atran divisions, is part of the Volga-Dnepr Group.