Money from the sky – Newspaper Kommersant No. 61 (7506) dated 04/10/2023

According to Kommersant, the carriers have asked the Ministry of Transport to provide three new measures of state support. The first is to extend the subsidies provided for SSJ 100 operators to new Tu-214s. The second is to co-finance the replacement of the engines of the Superjets produced before 2022 with domestically produced PD-8s. The third is to cancel the requirement to provide bank and state guarantees when buying and leasing new aircraft. The last idea, according to experts, has a higher chance of being implemented than the rest. In 2020, the required amount of state guarantees to lessors for loans for 59 SSJ 100 was estimated at almost 140 billion rubles.

As it became known to Kommersant, the Association of Air Transport Operators (AEVT) sent proposals to the Ministry of Transport on three new measures to support the industry.

Firstly, we are talking about subsidies for the remotorization of the SSJ: the replacement of the SaM-146 engines of the Russian-French PowerJet joint venture with domestic, but so far uncertified PD-8s. The required amount of subsidies is not specified in the letter. In February, the head of the United Aircraft Corporation, Yuri Slyusar, expressed doubt at the NAIS forum that the remotorization would be economically justified for the operators, since the costs for it could be comparable “with, conditionally, the residual value of the aircraft.”

Remotorization plans, as Kommersant has repeatedly written, are not included in the aviation strategy approved by the government until 2030: according to the document, the UEC should supply 314 engines in seven years, and Irkut in the same time – 142 SSJ New. The remaining 30 engines are provided for the replacement pool, clarified Kommersant’s sources in the aviation industry.

Secondly, the AEVT proposes to extend the effect of government decree No. 245 – to compensate airlines for part of the costs associated with servicing the aircraft – to Tu-214 aircraft. The subsidy is provided within the framework of the state program “Development of the aviation industry”, including “to improve the level of serviceability of the SSJ 100”. In the current budget for 2023-2025, 7.83 billion rubles are allocated for it. annually. Now the Tu-214 does not pass the subsidy criteria: it is issued for aircraft that received a type certificate no earlier than 2011. Passenger capacity should not exceed 130 seats (Tu-214 – 210 seats), and maximum takeoff weight – 56 tons (Tu-214 – 110 tons). Aeroflot will be the recipient of 40 Tu-214s out of the 70 vehicles promised by the manufacturer until 2030, in this regard, some interlocutors of Kommersant in the industry assess the proposal as “not without prospects.” The airline, AEVT and the Ministry of Transport did not comment on this.

According to a number of Kommersant sources, the third proposal has the highest chances of implementation – to abolish the requirement to provide bank or state guarantees in order to receive a subsidy when buying or leasing domestic aircraft (according to Decree No. 1212). The volume of this subsidy in 2023 is 2.5 billion rubles. and about 7 billion rubles. for 2024 and 2025. The bank guarantee is not issued by the bank free of charge, but Kommersant’s interlocutors found it difficult to indicate its exact cost in such transactions, naming amounts from 5–10% of the transaction value to two or three monthly lease payments.

The size of the bank guarantee is determined by the agreement of the parties, the rules of the bank and the solvency of the debtor, says Vladislav Rikov, adviser to BGP Litigation. At the same time, the size of the state guarantee is determined on the basis of the relevant act of the government and depends, among other things, on budget parameters.

In 2020, when discussing the program for the supply of 59 new Superjets, the industry talked about the government’s plans to issue state guarantees to lessors for the entire purchase amount – almost 140 billion rubles, Kommersant’s source in the market notes. This amount was calculated from the price of the SSJ 100, approximately $33 million (2.4 billion rubles per aircraft). The cost of the new SSJ New was not named, but Kommersant’s sources share the opinion that the import-substituting aircraft will rise in price significantly.

Calculating the potential cost of state guarantees now hardly makes sense, says Andrey Kramarenko, an expert at the HSE Institute for Transport Economics, since the authorities “probably will not agree to provide it.” According to the Budget Code, he explains, reserves of 100% of their size are formed under state guarantees in the budget in case of a risk of even partial default. This, in turn, creates risks for “imbalancing and planning the budget.”

Until 2022, state guarantees were considered a good market tool that guaranteed loans to lessors at “reduced rates close to sovereign debt,” but given the increased presence of the state in the banking sector, this factor is losing its significance, the expert adds. At the same time, he confirms that the payment of bank guarantees remains an expensive service “and, of course, should be canceled.”

Aigul Abdullina