S7 proposed increasing subsidies for regional transportation

Deputy General Director for S7 production Konstantin Pyankov presented a proposal to increase tariffs or subsidies for regional transportation at the Strategic Forum of Civil Aviation, writes “Kommersant”.

The draft changes, which are planned to be submitted to the Federal Air Transport Agency, propose to revise the routes, their length and duration of subsidies, which are enshrined in government resolutions No. 1242 and No. 215. In the first case, flights between regions bypassing Moscow are subsidized, in the second – between the central regions and Kaliningrad, Crimea and the Far Eastern Federal District (FEFD).

The Ministry of Transport did not officially comment on the proposals; the newspaper’s interlocutor at the ministry clarified that they could be discussed at the next meeting on regional transportation in the Federation Council.

S7 considers it necessary to index tariffs or the amount of subsidies, since now the flight pays for itself only when the load is more than 85%. Tariffs have not changed since 2013, when the program began. The airline also proposes not to annually identify carriers for subsidized routes, but to assign them to one company for several years. Representatives of other airlines agreed with this.

In addition, S7 proposes to give priority to routes that pass through major hubs in order to increase overall passenger traffic, but sources at other carriers did not agree with this initiative. S7 also believes that it is necessary to increase the length of subsidized flights to 3,000 km and the maximum capacity from 103 to 164 seats. At the same time, the airline proposes to cancel or suspend the priority of carriers with domestic aircraft, since the choice should be based on which aircraft is most efficient from a commercial point of view.

Other airlines partially supported S7’s initiatives, including updating the list of routes and increasing the length of flights. At the same time, companies that use SJ-100 opposed the idea of ​​canceling their priority.

The newspaper’s source acknowledged that the programs needed updating, but with possible industry spending cuts next year this seemed unlikely, but he admitted the possibility of rising passenger fares. Fedor Borisov, an expert at the Institute of Transport Economics and Transport Policy at the National Research University Higher School of Economics, agreed that routes should be assigned to companies for three or five years, since their annual revision complicates long-term planning for carriers.

In 2024, according to Resolution No. 1242, the volume of subsidies may amount to 7.3 billion rubles, it follows from the draft budget, while previously it was planned to be 8.9 billion rubles. According to Resolution No. 215, 10.3 billion rubles can be allocated. against 12.3 billion rubles, the newspaper notes.