Russian airlines may close hundreds of domestic flights due to lack of state support

Russian airlines may close hundreds of domestic flights from 1 January 2025 due to the lack of government subsidies. 

Source: Russian media outlets The Moscow Times and Kommersant, with reference to their sources

Details: The sources said that the Ministry of Transport of Russia and the Federal Air Transport Agency of Russia (Rosaviatsiya) cannot agree with the Ministry of Finance on the terms of providing airline companies with 19 billion roubles for flights bypassing Moscow and flights between central Russia, the Far East, and Kaliningrad. 

The approval of subsidies for socially important routes in the Far East is also delayed.

According to the current regulations, applications for subsidies must be submitted no later than 1 October, and their consideration takes at least a month. Usually, Rosaviatsiya distributes funds by 1 December. By this date, airline companies were already preparing flight schedules starting from 1 January and opening ticket sales for subsidised flights.

However, the media outlets noted that tickets for certain destinations from 1 January have not gone on sale in several regions due to the current situation.

According to one of outlets, the regional authorities are expressing concern about this, as they have received requests from passengers. The Ministry of Defence of Russia, which controls the availability of tickets for military personnel to places of rest and treatment, has also become involved in the issue.

In the absence of subsidies, airlines will either refuse to operate flights or will be forced to sell tickets at commercial prices. However, the most likely option is to close the routes with low profitability.

Background: Trillion-dollar war spending, inflation and the Central Bank of Russia's rate hike to its highest level in two decades have pushed Russian industry to the brink of financial collapse.

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