Transaero Airlines will receive government bailout

Russia’s second largest airline, Transaero Airlines, has been guaranteed a three-year, 9 billion-ruble ($164.8 million) bailout by the Russian government.

TASS Russian News Agency reported that Prime Minister Dmitry Medvedev signed a resolution on Christmas day to support Transaero in light of the economical situation in Russia. TASS also reported that inflation in 2014 in Russia was 11.4 percent.

The government will cover up to 100 percent of Transaero’s liabilities with a three-year loan from VTB Bank, which is 60.9 percent government-owned. The loan is strictly to be used for the airline’s operating costs. The Russian ministry of transport will monitor the use of the loan. Russia’s government said this will not be an extra burden on the budget until 2017 since Transaero’s guarantee-secured liabilities only become mature after Jan. 1, 2017.

Transaero currently operates 103 aircraft – 53 of which are widebodies. – including two Tu-204C freighters – and  has four A380s, twelve A330s, and eight A320s on order with Airbus, as well as four 747-8Is on order from Boeing. There has been some speculation that the carrier’s precarious financial situation may force it to cancel the A380 and 747-8 orders, but, so far at least, no announcement has been made. 

In 2013, Transaero carried 70,000 tonnes of cargo overall, a 5.9 percent increase over 2012 figures. According to Air Cargo World’s sister publication Cargo Facts, Transaero Airlines launched the first scheduled freighter service in its history in early December, operating the Tu-204Cs on a Beijing-Novosibirsk route.

“We have overcome the crises of 1998 and 2008. We have great experience of finding a way out,” Transaero CEO Olga Pleshakova told Russian news agency RIA. “As then, all our actions are aimed at safe and reliable transportation, as well as increasing the availability of air travel, which is affected by the current exchange rate.” 

Russia’s third largest airliner, passenger and cargo carrier Utair, has also asked the Russian government for help. It owes 13 billion rubles ($214 million) to banks. It plans to cut its current fleet of 68 aircraft by 40 percent, as it cannot make lease obligations.

Vice-Premier Arkady Dvorkovich told TASS that the airlines must look for ways to eliminate losses in the next few months.

“We have overcome the crises of 1998 and 2008. We have great experience of finding a way out,” Transaero CEO Olga Pleshakova told Russian news agency RIA. “As then, all our actions are aimed at safe and reliable transportation, as well as increasing the availability of air travel, which is affected by the current exchange rate.”