Small Russian airlines face mass cull

Up to a hundred small Russian airlines could face bankruptcy in the next few months, if the Russian Federal Air Transport Agency (Rosaviatsia) brings in new rules tightening minimum requirements for scheduled airlines.

The proposed changes, unveiled on Friday, would mean that only airlines with a minimum 20 aircraft of the same type would be allowed to run scheduled services. Only about 15 airlines in Russia are in a position to comply with this requirement. Around 90 percent of passengers are carried by the country’s five largest airlines.

Rosaviatsia wants the remaining firms to be downgraded to charter operator status or cease flying. If that happens, up to 50,000 people could lose their jobs and air links to some of Russia’s most isolated communities could be lost.

The Russian government is at the same time working toward introducing new regulations aimed at easing the requirements for new air companies to start up, later this year.

The development comes in the wake of allegations against a Continent Airline, a small Russian operator, which suspended flights and applied for bankruptcy last week over multi-million ruble debts.

Investigators have since opened a criminal probe into Rosaviatsia officials over a license scam involving Continent.

“The criminal probe will identify Rosaviatsia officials and other government agencies and give a legal evaluation of their actions in the issuance and revocation of the airline’s license,” Investigative Committee spokesman Vladimir Markin said.

Continental, set up four years ago in the Amur Region in the Russian Far East with a fleet of just nine Tupolev Tu-154 M aircraft, suspended flights over a 32 million ruble ($1.2 million) debt at the end of July.

Rosaviatsia cancelled the airline’s operation license on Friday at the request of the airline’s general director, Vladimir Krasilnikov, who claimed that the company had no money to fuel its jets.

Continent has sold 37,000 air tickets for flights until the end of September. Overall, the airline cancelled 69 flights on July 29-31, affecting over 3,000 passengers.

Rosaviatsia knew about the airline’s financial difficulties but took no action as the regulator could revoke the company’s operating license only if it had arrears to the Pension Fund or its staff, Vedomosti business daily reported on Monday, citing Sergei Likharyov, general director of Basel Aero, an airport operating company.

The news comes in the wake of a call by President Medvedev to ground the Tupolev Tu-134 and Antonov An-24 regional airlines, two staples of Russian regional carriers, following fatal accidents this year.

The government has also said it will again enforce a requirement for installation of expensive Terrain Warning Awareness Systems (TAWS) and Traffic Collision Avoidance Systems (TCAS) in passenger aircraft, which is likely to make some of them no longer economically viable.

Leave a comment