Russia’s governmental commission for sustainable development of the country’s economy has now approved the updated version of its list of strategic organisations that will be closely monitored through the on-going Coronavirus crisis and plunging oil prices. Each enterprise will be monitored and can be placed on priority state support.
The list dates back to the financial crisis of 2008 when dozens of large companies were denied access to affordable loans and the federal government was challenged with the task of saving vitally important assets. The initiative was brought back to life once again in 2014 following the imposition of international sanctions on Russia and sliding oil prices but later the original list of 300 companies was cut to 200.
Now, the COVID-19 pandemic has once again raised the ‘strategic company’ narrative, but in a much broader sense. The companies deemed ‘strategic’ – the latest updated version lists a total of 646 – may not only claim state support but, in a provision recommended by the ministry for economic development, may also be immune to bankruptcy within the next six months.
Among the strategically important companies on the list are Russia’s largest airlines, airports and aerospace manufacturers.
Seven airlines are on 2020 strategic register – 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. The passenger carriers served a combined 94.4 million passengers in 2019, roughly 74 per cent of the entire traffic of all of Russia’s airlines. Combined, all six handled 413,200 tonnes of cargo, 37.6 per cent of the total freight traffic.
Compared to the 2009 version, today’s updated list excludes the now defunct Transaero, which left the market in 2015, and includes Aeroflot Group’s two subsidiaries of Rossiya and Pobeda. But largely the concept has remained the same with the state willing to support the largest airlines, including Utair which was in financial dire straits prior to the crisis and is currently negotiating with creditors over the restructuring of its multi-billion-rouble debts.
Similarly, Volga-Dnepr suffered from the global freight market downturn last autumn and was also forced to launch a restructuring effort.
According to the latest list, the number of airports which can call on state support has been substantially supplemented and now includes four of Russia’s largest individual airports of Moscow’s Sheremetyevo, Domodedovo and Vnukovo and St Petersburg’s Pulkovo, as well as three airport holdings which collectively manage the bulk of the country’s larger regional airports of Novaport, Basel Aero and the Airports of Regions groups.
Combined, these ‘strategic’ airports handled more than 170 million passengers last year, some 79 per cent of Russia’s entire air traffic.
Novaport runs 16 airports, including Novosibirsk, Mineralnye Vody, Kaliningrad, Volgograd, Chelyabinsk, Barnaul, Kemerovo, Tyumen, Astrakhan and Murmansk; Airports of Regions manages Yekaterinburg, Samara, Nizhniy Novgorod, Rostov-on-Don, Saratov, Petropavlovsk Kamchatskiy and Novy Urengoy; and Basel Aero has the three airports of Sochi, Krasnodar and Anapa in its portfolio.
The 2009 register listed the big four and the six regional airports of Sochi, Yekaterinburg, Novosibirsk, Kaliningrad and Khabarovsk only.
Earlier versions of the lists specified that, no matter how strategic these organisations are, they were not guaranteed direct financial injections. Instead, they were eligible for indirect support measures such as loans with reduced interest rates, state guarantees and subsidies, the restructuring of tax debts and so on.
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