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Thirty Russian airlines may go bankrupt in 2025

Wednesday, 13 November 2024, 09:27
Thirty Russian airlines may go bankrupt in 2025
Stock Photo: Getty Images

Thirty Russian airlines, which provide more than a quarter (26%) of domestic passenger traffic, may go bankrupt in 2025

Source: Izvestia

Details: A sharp deterioration in the financial situation and the withdrawal of operator's certificates threaten air carriers with bankruptcy due to accumulated debts for leasing foreign aircraft.

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After the sanctions were imposed in 2022, many of them reportedly stopped making lease payments. In 2025, the government allowed them to write off their debts, but these amounts will be subject to a 25% income tax. This financial burden may force them to close down.

Only major airlines such as Aeroflot, Ural Airlines and S7 Airlines were able to buy back leased aircraft with funds from the National Welfare Fund. In the first quarter of 2024, the number of repurchased aircraft reached 165 out of 400.

The report notes that market participants' dissatisfaction is understandable, as the written-off payables are classified as "non-operating income", while the "saved" money is recognised as profit and is taxed.

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