Russia's Rosaviatsiya federal air transport agency may impose restrictions on flights or even scrap the air operator certificates of 42% of the country's airlines, including more than one-third of the country's leading operators, because of their weak financial situations.
The finances of the five leading airlines - Aeroflot, Transaero, S7 Airlines, Utair and Orenburg Airlines - are stable, but another seven airlines of the top 20 are at risk. Companies whose financial situation was worrying held 24.4% of the market by revenue, Rosaviatsiya says.
The agency says that as of early 2010, 23% of all Russian airlines had negative net assets. According to Russian law, this seriously endangers their legitimacy.
In July, Rosaviatsiya head Alexander Neradko is believed to have criticised budget carrier SkyExpress as a financially volatile company, several days before billionaire Oleg Deripaska's Basic Element rescued the company by securing all its loans.
Although Rosaviatsiya has the right to scrap the air operator certificates of companies in a poor financial state, it is unlikely to do so because of the potentially huge social impact. It is more likely to impose restrictions.
The agency is authorised to deny access to charter flights and refuse to issue new authorisation for international flights, which will result in the slow demise of weak companies.
Source: Flight International
