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Russian air traffic market experiences some difficulties

Big players frequently stage dumping on some routes and it is becoming more difficult for minor companies to resist it

The Russian air market may be deprived of two quite major players, Kommersant daily reported. On October 26, the air company Red Wings suspends regular flights and may terminate its charter program soon. The air company Yakutia faced serious financial problems. The company owes four million dollars to the leasing companies that already resulted in the arrest of an airplane of the company in the U.S. state of Alaska. Experts said that the minor air companies have more difficulties to compete with major players on the market.

The air traffic in the height of the season of vacations brings most revenues to the companies and this profit is incomparable with what can be earned in winter. The air company Red Wings noted that it will continue charter flights to Turkey, Egypt and Italy in October-November. Red Wings will most likely wrap up its further charter program.

Yakutia is another air company, which is experiencing serious problems. The airliner Boeing 737-700, which belongs to the U.S. company International Lease Finance Corporation (ILFC) and which arrived from Petropavlovsk-Kamchatsky on September 26, was detained at the airport in the city of Anchorage, State Alaska, the United States, to satisfy the lawsuit of the U.S. company. ILFC demands from Yakutia to pay the debts for the payments for two Boeing airliners, which were leased for seven years in 2012. The plaintiff estimated the debt at $2.6 million. The debt has amassed “over the cash deficiency caused by the seasonal decline in air traffic,” the Yakutia press service explained to the daily, pledging that the airliner will resume flights soon. Experts noted that the arrests of airliners are few. These situations take place when an air carrier does not fulfill its debt liabilities.

Despite high figures the Russian air traffic market “is living through hard times and is becoming specific,” head of the Aviaport analytical service Oleg Panteleyev noted. An obvious misbalance towards international tourist traffic exists and excessive capacity is observed, the expert added. Big players “frequently stage dumping on some routes and it is becoming more difficult for minor companies to resist it,” Panteleyev said.

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