About thirty 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 has begun, most Russian airlines came 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.
Anders Åslund
