Allocation of extra money from National Wealth Fund to buy out foreign aircraft not currently under discussion - Russian transport minister

MOSCOW. July 22 (Interfax) - The question of Russia's National Wealth Fund allocating money for buying out aircraft from the leasing companies is not on the agenda, Transport Minister Roman Starovoit said in response to a question posed by Interfax on Saturday.

"No, we are not discussing such a matter. In fact, there are currently no discussions on the topic of buyout," Starovoit said.

The same was confirmed by the Federal Air Transport Agency's (Rosaviatsia) chief Dmitry Yadrov.

"Literally yesterday we were conferring on this topic in regard to one airline company, and right now the matter does not stand like this," Starovoit said.

Last year Russian authorities directed nearly 300 billion rubles from the National Wealth Fund for insurance arrangement on aircraft leased from foreign companies. The money was allocated for a 15-year period at a rate of 1.5%. The scheme requires airline companies to re-sign contracts on the same aircraft by the end of the arrangement, only now with a Russian lessor (a Rosaviatsia agency). The fleet thus "freed" from foreign registration can be used on foreign flights without risk of being impounded.

The Fund's money has already been used in aircraft deals of Aeroflot (101 units), S7 (45), Ural Airlines (19) and Aurora (5). The deals were partly funded by the carriers themselves.

In March the Kommersant newspaper reported, citing sources, that the ministry proposed the government should allocate another 295 billion rubles from the wealth fund to buy out foreign aircraft.