Russian national airline rescued by government

RUSSIA / FSU POLITICS - In Brief 20 Jun 2022 by Alex Teddy

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On June 8, Aeroflot announced it was seeking USD 3 billion with a new share issuance. Shareholders voted for the emergency issuance. USD 1.74 billion is coming from the National Wealth Fund. The government is determined to save the airline as it is the flag carrier and has been going for almost 100 years. Aeroflot still used the hammer and sickle symbol. Putin is keen to keep alive links to what he perceives as Soviet greatness. Russian airlines have been severely hurt by 48 countries banning them from their airspace. Russia and Belarus have banned airlines from those countries from Russian and Belarusian airspace. Aeroflot has lost some of its most lucrative routes. Boeing will no longer sell spare parts to Aeroflot. The vast majority of Aerospace planes are from Boeing or Airbus. It is thought that officially at least many of these planes will be inoperable within a few years. It has been speculated in the Russian media that Aeroflot might order 300 planes from the United Aircraft Corporation which is a subsidiary of the state owned aerospace consortium Rostec. New planes for Aeroflot could include the Irkut MS 2 which is a Russian built medium range aircraft with 200 seats or a Sukhoi Superjet 100 which is also Russian made.  In January 2022 Aeroflot passenger numbers were at 70% of pre-pandemic levels. Pobeda is the low cost stable mate of Aeroflot. Pobeda flew 2.2 million passengers in March 2022 which is less than hald the number carried in March 2019 (i.e. the last March before the pandemic). It is likely that Pobeda will go bust as will other minor Russian airlines like S7 and Urals.