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Aeroflot CEO does not rule out bankruptcy of Russian airlines in autumn
5 August 2020, 16:42
Aeroflot CEO does not rule out bankruptcy of Russian airlines in autumn
Aeroflot CEO Vitaly Savelyev does not rule out that a number of Russian airlines may declare bankruptcy this fall.

Now out of 100 Russian airlines that have a license, only half are actually operating. Moreover, the top 20 Russian airlines account for up to 97% of all domestic traffic.

According to him, already in 2019, experts estimated the oversupply in the market at 12-14%. After the fall in demand for air travel during the spread of the coronavirus in the country, this figure most likely increased, but so far none of the existing Russian airlines has filed for bankruptcy, although all have been forced to reduce the number of flights they operate due to a drop in demand for flights.

Now, according to Savelyev, Russian airlines are beginning to dump prices in the fight for passengers. “For those who fly, this is certainly a plus, but for carriers it is a minus, since the costs have remained the same”, - he said in an interview with TASS. Now, according to him, the prices for Aeroflot tickets are comparable to the cost of a flight in low-cost airlines. All Russian airlines have chosen a similar policy of reducing prices for transportation.

The Russians, on the other hand, note an increase in airfare after the crisis. So, on the popular portal for booking air tickets, the minimum ticket price in August for a flight from Moscow to Rostov-on-Don starts from 3.5 thousand rubles, while before the crisis it was possible to fly to this city for 2-2.5 thousand rubles. Tickets to St. Petersburg have also become more expensive. If earlier the minimum cost of a ticket from Moscow in this direction was 1.5-2 thousand rubles, now it is impossible to fly to St. Petersburg for less than 2.5 thousand.

Earlier it was noted that the Pobeda airline sent a third of its pilots on unpaid leave until the end of the year. They cannot resign from the company, as they are bound by a five-year contract, and will have to pay a fine of 1.5 million rubles, which the airline spent on their training. At the same time, the workload on those pilots who remained in the company increased greatly.

Airlines have been recognized as one of the worst affected sectors of the economy due to the coronavirus epidemic. The government allocated 23.4 billion rubles to support the industry, and also allowed the issuance of vouchers to passengers for future flights instead of refunds for canceled flights. Earlier it was noted that Aeroflot refused to return money to passengers even for those flights that the airline itself canceled during the period of self-isolation. The international rating agency Fitch predicts that the airline will be able to fully recover no earlier than 2022. The airline lost its leading position in the Russian market as it cut most of its flights to another airline, S7.