According to the TASS news agency, Russian prime minister Dmitry Medvedev on Christmas Day signed a government resolution guaranteeing a three-year RUB9 billion ($166 million) loan to be provided by VTB Bank, which is 60.9% owned by the Russian government.
In return, Transaero has agreed to freeze domestic fares in 2015, and reduce fares by 5%-7% on domestic routes served exclusively by Transaero.
The Russian Ministry of Transport will be responsible for administering the loan, which will be used exclusively to finance the airline’s operating activities. According to the government, the loan guarantee will entail no extra burden on the federal budget until after January 2017 when Transaero’s guarantee-secured liabilities are due to mature.
Just before Christmas, Transaero CEO Olga Pleshakova denied reports that the airline might have to suspend operations before the end of the year because of what the company described as “drastically changing macroeconomic conditions.”
In November 2014, Transaero began to implement “a comprehensive set of measures aimed at enhancing its operational efficiency in the rapidly changing current business environment,” it said in a statement. Key measures are expected to be implemented within three to six months.
Transaero said in 2015 it would “continue to focus on enhancing the reliability and accessibility of air transport for Russian residents,” with particular emphasis on routes serving the Southern resorts within the Russian Federation and Russia’s Far East from Moscow and St. Petersburg.
Transaero was launched in 1991 and last year carried 12.5 million passengers with a fleet of 103 predominantly Boeing aircraft.
Russia’s third largest carrier, UTair, is also seeking a government bailout, after running up debts reportedly worth RUB13 billion. A 40% cut in fleet size is among restructuring measures aimed at slashing costs and bringing the airline back to breakeven in 2015.
(Anne Paylor - ATWOnline News)