News Feed
Show More
News Feed

Nearly 30 Russian airlines may go bankrupt in 2025, media reports

1 min read
Nearly 30 Russian airlines may go bankrupt in 2025, media reports
The inscription Aeroflot seen on an aircraft model presented by Russian Airlines at the St. Petersburg International Economic Forum 2024 on June 5, 2024. (Maksim Konstantinov/SOPA Images/LightRocket via Getty Images)

About 30 Russian airlines, accounting for 26% of domestic passenger traffic, may go bankrupt in 2025, Russia's Izvestia newspaper reported on Nov. 13.

Since the full-scale invasion began, most Russian airlines have come under Western sanctions. As a result, in 2022, several industry players stopped making lease payments.

Russian airlines fear a deterioration in their financial condition and the revocation of their operator's certificates due to accumulated debts for leasing foreign aircraft, the media reported.

In 2025, the government allowed the companies to write off their debts, but these amounts will be subject to a 25% income tax. This financial burden may force them to close their operations, according to Izvestia.

Almost the entire fleet of Russian carriers was registered in Bermuda, Ireland, as well as other European countries, with monthly payments for a used Airbus A320s running up to around $80-150,000.

Only major airlines, including 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, 165 out of 400 were repurchased.

Since the written-off accounts payable are classified as "non-operating income" and the "saved" money is recognized as profit and taxed, this causes dissatisfaction among market participants, the media reported.

‌                                    

Read Also

Opinion: The central bank can’t solve Russia’s economic crisis in the face of war and sanctions  Almost three years after Russia launched its full-scale invasion of Ukraine, the West’s financial sanctions have finally started to bite, triggering fierce infighting within the Kremlin over control of Russia’s central bank. Russia’s business community has remained largely silent over the past two…                                                                           The Kyiv Independent                                     Anders Åslund                                                                                  

Avatar
Kateryna Hodunova

News Editor

Kateryna Hodunova is a News Editor at the Kyiv Independent. She previously worked as a sports journalist in several Ukrainian outlets and was the deputy chief editor at Suspilne Sport. Kateryna covered the 2022 Olympics in Beijing and was included in the Special Mentions list at the AIPS Sport Media Awards. She holds a bachelor's degree in political journalism from Taras Shevchenko University and a master's degree in political science from the National University of Kyiv-Mohyla Academy.

Read more