Small Russian airlines ask for government help
All country’s airlines should be equally eligible for state support, experts believe
The senator representing the Russian far eastern Magadan province has appealed to the government to add 12 smaller regional airlines to the list of Russia’s ‘strategic enterprises’ that may expect to receive state support in times of economic downturn.
Anatoly Shirokov, who is also the Russian government’s plenipotentiary for the development of Russia’s far eastern regions, argues that the loss of even one of those airlines which operate in the far east and the territories of the extreme north would be catastrophic for people living in remote localities where, in most cases, air connections are the only available means of transportation.
Shirokov addressed his proposals to Russian prime minister Mikhail Mishustin, soliciting support for Aeroflot Group subsidiary Aurora Airlines, IrAero, Aeroservis, Siberian Light Aviation, Yamal, Yakutiya, Polar Airlines, Khabarovsk Airlines, Kamchatka Aviation Enterprise, Chukotavia, National Air Medical Service and Russian Helicopter Systems.
If even one of these carriers were to fail or experience disruptions, the consequences for remote communities could be “comparable to those of the coronavirus pandemic,” the senator stressed.
The number of Russia’s ‘strategic enterprises’ has only just grown threefold to include 600 companies, the Russian government revealed on March 21, but the list has not yet been officially published. The listed companies can count on priority state support, including loans with reduced interest rates, state guarantees for investment projects, debt refinancing schemes and other measures. The list reportedly includes country’s largest airlines Aeroflot, S7 Airlines, Ural Airlines and Utair, as well as the four major hub airports of Sheremetyevo, Domodedovo, Vnukovo and Pulkovo.
Shirokov is calling for the creation of a dedicated reserve fund offering relief to airlines on their aircraft lease and insurance payments, including penalties for the premature return of leased aircraft, as well as payments for aircraft parking and compensations to employees for unpaid leave and layoffs. He is also insisting on the freezing of jet fuel prices until the end of this year and the waiving of all taxes for the airline industry until normal operations are resumed. Customs duties on imported spare parts and equipment should be waived, and those airlines that have the state as their shareholder should be disallowed from paying dividends for 2019 and 2020, he suggests.
Boris Rybak, the head of Russia’s Infomost consultancy, believes that in the current circumstances the only way to save the Russian air transport industry is to compensate all airlines for all the revenues that they would likely to have generated before the arrival of the pandemic. All airlines existing in the market today should be equally eligible for state support, he says. If that support is selective, then part of the Russian territory will be critically underserved, he believes.
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