Three dozen airlines in Russia could go bankrupt in 2025 due to the indirect impacts of Western sanctions.
Russian media Izvestia said the affected airlines comprise three dozen small and medium-sized airlines, which make up 26% of Russia’s passenger flights.
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Izvestia, citing CEO of Russia’s NordStar Airlines Leonid Mokhov, said the issues arose from leased foreign aircraft, where Western sanctions imposed on Russia in April 2022 led to legislative changes that stipulated the debts were to be paid in Russian rubles, a term unaccepted by foreign lessors. The debts remained unpaid to foreign lessors as a result.
While the airlines have used the unpaid debts to cover rising expenses, Russia is now set to write off the debts in 2025, which would turn them into taxable profits with a tax rate of 25%, an amount the airlines are unlikely to cover and could lead to bankruptcy.
NordStar said that of the 30 passenger airliners in Russia, only three major airlines – Aeroflot, Ural Airlines and S7 Airlines – were able to purchase the leased aircraft using funds from Russia’s National Welfare Fund (NWF).
A used aircraft from Airbus’s A320 lineup costs $80,000 to $150,000 to lease per month, Andrey Patrakov, the founder of the flight safety and certification service RunAvia and an aviation expert, told Izvestia.
Patrakov added that unpaid debts are often used to cover rising expenses for spare parts and maintenance work since official maintenance became unavailable after Western sanctions.
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On Oct. 17, Kyiv Post reported that Russia was negotiating with Kazakhstan to involve its airlines in domestic flights due to a shortage of aircraft.
In August, reports arose that some low-cost airlines in Russia were rationing fuel as a cost-cutting measure that reduces the margin of safety.
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