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April 1, 2022

Russia announces $1.2bn aid for domestic airlines

The airlines and aircraft manufacturers will receive government subsidies this year.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


The Russian Government is set to provide $1.2bn (RUB100bn) to support domestic airlines to deal with the sanctions imposed by the West for its invasion of Ukraine, Reuters reported.

Russian President Vladimir Putin in a televised remarks at the end of a meeting with the representatives of airlines and aircraft manufacturers said that the domestic flights would receive government subsidies this year.

The country’s aviation sector is under severe pressure after the US and Europe closed their airspace to Russia-based aircraft.

In retaliation, Russia too banned flights from 36 countries, including 27 EU nations.    

Additionally, many aircraft manufacturers including Boeing, Airbus, Embraer suspended aircraft parts supply to Russia.

Due to these sanctions, many Western aircraft lessors have also terminated contracts with Russian airlines.

In response to the termination of contracts by the Western lessors, President Putin signed a bill last month, which enabled Russian airline companies to register aircraft leased from foreign firms and continue operating them domestically.

Putin is said to have instructed the officials to work out measures to ease leasing payments burden  on the airlines.

Russian President Vladimir was quoted by the news agency as saying: “As for leasing payments, let me remind you that a significant part of them were supposed to be paid to companies from so-called unfriendly countries, and they violated their contractual obligations. “In this regard, I ask the government to prepare a set of measures to address the problems of leasing payments, naturally considering which country this or that leasing company is based in.”

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