Looming Bankruptcies of Russian Regional Air Carriers will Isolate Many Parts of the Country

Paul Goble
    Staunton, Nov. 13 – Many cities in the Russian Federation, especially those in the north and east of the Urals are not served by reliable roads or rail connections and thus must depend on air links to tie them to the rest of the country. That makes the potential bankruptcy of some 30 regional carriers into something more serious than a first glance might suggest.
    In countries with a ramified transportation system, problems in one sector are generally solved by shifting to the use of another. But in many places in the Russian Federation, there is no such possibility. And so if one sector, in this case, air travel, suffers a major blow, neither these cities nor Moscow have good substitutes available.
    And what is especially noteworthy is that this problem is being exacerbated by Western sanctions because restrictions on the leasing by Russian carriers of planes from the West and the lack of spare parts because of restrictions on their sale to these carriers appear to be the primary causes of this situation.
    Moscow’s Izvestiya newspaper report that approximately 30 of Russia’s local and regional air carriers now face bankruptcy. These currently carry 26 percent of all domestic passengers in the Russian Federation (iz.ru/1789856/vladimir-gavrilov-stanislav-fedorov/cek-za-bortom-aviakompanii-zaavili-o-riskah-bankrotstv-iz-za-dolgov-za-lizing).
    The Russian government may shift planes from Aeroflot to these routes and even use this crisis to take over the regional carriers. But such a solution would be only a temporary one at best and would most likely impose new burdens on the ability of the national carrier to continue to operate at current levels.