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Russia’s second, third largest airlines can count on state support — deputy PM

December 22, 2014, 13:56 UTC+3 MOSCOW MOSCOW December, 22. /TASS

The government can provide state guarantees for loans or provide subsidies for domestic flights

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© ITAR-TASS/Yuri Smityuk

MOSCOW, December 22. /TASS/. Airlines facing financial problems in the worsening economic situation can count on state guarantees for loans, Vice-Premier Arkady Dvorkovich told the Vedomosti newspaper, adding that UTair and Transaero had informed the government about problems.

Two ways of support were under discussion, he said. The first is state guarantees for loans provided for the companies. It is helpful enough as it is expected to enhance interest of banks to settle problems, he said, adding that Transaero would receive state guarantees already early this week.

The second is subsidies for domestic flights. More routes may be included in the list to make up for losses. The cost for the budget is not too high - hundreds of millions to one-two billion roubles, and such funds can be found, Dvorkovich said, adding it would bring positive results.

At the same time, airlines themselves must look for solutions not to have losses in next months, the vice-premier said.

Shareholders must also support the companies. UTair has such a strong shareholder ready to help, he added.

Transaero and UTair are Russia’s second and third largest airlines.

A source told TASS that Transaero earlier in December asked the government and creditors to help, saying it feared it would have to suspend its work before the New Year due to debts. Later, the company’s director general Olga Pleshakova, on her Facebook page, assured the airline would not cancel flights before the New Year and after, but she did not deny that the company had asked for state support.

UTair, whose debts have reached 13 billion roubles (over $200 million), last week published a program to optimize activities and reschedule its debts. The company plans to improve the situation to have no losses in 2015 .

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