S7 Airbus A320neo
The Russian government has announced a relief package of $316.1 million for their domestic airlines. This is due to the ban of all international flights in late March. They have even suspended repatriation flights to prevent the spread of the virus. Russia has recently become the country with the 3rd highest amount of COVID-19 cases in the world. With aid going to many airlines, the government has put in place a number of conditions on how the money can be spent.
In Russia, the most popular airlines are Aeroflot, S7 and Rossiya. Domestic flights are still going ahead but their demand is low with carriers cutting their capacity as a result. With the ban on international flights, many airlines are experiencing unimaginable losses. Therefore, this relief package will help these airlines get through the crisis and help them pay their staff for the next few months. Unfortunately, with the uncertainty of this crisis, the airlines may need much more aid if the pandemic continues.
To apply for this aid from the relief package, airlines must apply to the Aviation Ministry with required documents. They will receive a decision in 20 days of application. However, this aid comes with some rules. At least 60% has to go towards paying salaries, up to 30% on lease payments and up to 10% on parking fees. With any remaining fees, they can then use them for operations or maintenance. Thankfully, with 60% of the funds going towards paying salaries, this means more staff can be put on payroll. Unfortunately, paying staff is what is causing the break of airlines during this crisis. This aid given by the Russian government ensures that airlines can survive this pandemic.
Other than Aeroflot, S7 and Rossiya, Russia is home to four other major airlines. These are UTair Aviation, Ural Airlines, Pobeda and Azur Air. Nordwind Airlines are another Russian airline that are well known but are not as big as the rest. The Russian government has not yet set out how this money will be distributed. Therefore, some airlines could only receive a fraction of aid.
With the Coronavirus pandemic affecting airlines worldwide, Russian airlines are no different. They have seen a worrying 91.5% drop in passenger traffic in April. However, with aid given early on in the crisis, it allows for minimal job losses in the future. For now, we must wait and see how this aid will benefit the airlines.
Comments