Economic crisis hit airlines hard in Russia’s western Arctic

UTair at the airport in Naryan-Mar. (Thomas Nilsen/Barents Observer)
UTair at the airport in Naryan-Mar. (Thomas Nilsen/Barents Observer)
It will be a tough year for air companies flying in Barents Russia, including Transaero, UTair and Nordavia.

UTair, with hub in Syktyvkar in the Komi Republic, is currently negotiating ways to restructure its debt, which totals to 70 billion rubles (€913 million), reports the St. Petersburg Times.

UTair is Russia’s third-biggest airliner and operates routes around northern Russia, including Murmansk. Last week, Alfa-Bank seized 28 of the helicopters belonging to UTair in the Tyumen region after filing a lawsuit against the carrier in November, reports news-agency Tass.

Total losses last year for Russian airliners are estimated to be 30 billion rubles (€390 million), a sixfold increase compared with 2013, according to the Association of Air Transport Operators in Russia, reports RusTourismNews.

Russia’s second largest carrier Transaero is receiving a 9 billion ruble (€117 million) guarantee granted by the government for loans. In the Barents Region, Transaero flies to Murmansk and Arkhangelsk as well as Naryan-Mar.

The two most likely reasons for the crisis in the aviation business is Russia’s financial crisis and rising cost for aircraft leasing obligations, due to the collapse of the ruble. The majority of the civil aviation fleet in today’s Russia is either Boeing or Airbus aircrafts.

Transaero and UTair are hit particularly hard in the slowing economy with a declining passenger market.

Arkhangelsk-based Nordavia, that earlier operated the only east-west cross-border flight in the Barents Region, is no longer partner with Aeroflot. Late last year, Aeroflot suspended its frequent flyer cooperation with Nordavia and from January 1st, Aeroflot started its own flights directly from Moscow to both Arkhangelsk and Murmansk.

Related stories from around the North:

Canada: Captain ignored co-pilot’s warnings before plane crash in Canadian Arctic, CBC News

Finland: Finnair adding more flights to Lapland, Yle News

Greenland:  Air Greenland plans another summer of Iqaluit-Nuuk flights, CBC News

Iceland:  Flights to Iceland to start next March from Edmonton, Canada, CBC News

Norway: Air route links Norway, Sweden and Finland in Arctic, Barents Observer

Sweden: EU Sweden project may lead to ‘green’ flights at airports, Radio Sweden

United States: Tackling ‘frost boils’ on Alaska’s Arctic Highway, Alaska Dispatch

Thomas Nilsen, The Independent Barents Observer

For more news from the Barents region visit The Independent Barents Observer.

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