17 Mar 2020 12:32

Rosaviatsiya allowing for airline bankruptcies due to COVID-19, proposing aeronautical fees be partially cancelled

MOSCOW. March 17 (Interfax) - Russia's Federal Air Transport Agency (Rosaviatsiya) is not ruling out airline bankruptcies due to coronavirus, the agency's head and First Deputy Transport Minister Alexander Neradko said during an expanded meeting of the Rosaviatsiya board on Tuesday.

"A reduction in airline profits due to the closure of international routes and the simultaneous increase in expenditures in the event the ruble exchange rate falls could lead to significant losses and difficulties in civil aviation. Essentially, bankruptcy risks arise for airlines, which find themselves in a difficult financial situation. We have one airline - Utair - which is in a dire financial situation," he said.

"According to the airlines themselves, marginal income losses due to the cancellation of flights to China could be 1.7 billion rubles just in February 2020. Different numbers are being given if this situation persists through the end of the year. The numbers differ, they need to be checked into, but totals of up to 100 billion rubles are being talked about," Neradko said.

In order to support airlines, Rosaviatsiya is proposing that aeronautical fees by zeroed for flights in certain regions of the country, including the Far East.