State support for airlines has declined

For the first time, the Ministry of Transport has publicly signaled to carriers that the record state support for 2022 will be reduced. So far, only 25 billion rubles have been allocated in the budget. against last year's 100 billion rubles, and if earlier sources in the Ministry of Transport expected at least a twofold increase in funding, now there are no such hopes. Nevertheless, the Ministry of Transport expects a growth in passenger traffic by 6% by the end of the year, up to 101 million people, which Kommersant's interlocutors in the industry consider doubtful.

The Ministry of Transport for the first time confirmed the future reduction of state support for airlines after record volumes in 2022, explaining this by the fact that carriers are gradually buying out aircraft from financial leasing. As Minister of Transport Vitaly Savelyev said on January 24, the department plans to "reduce the volume of requested subsidies in proportion to the number of aircraft purchased." In 2022, the government paid almost 100 billion rubles to airlines for transporting passengers on domestic flights. So far, the subsidy has been extended from November 2022 to March 2023, having allocated 25.3 billion rubles. Previously, sources in the Ministry of Transport have repeatedly spoken about an increase in this amount, but now Kommersant's interlocutors in the ministry do not count on this.

Some of Kommersant's interlocutors interpreted Mr. Savelyev's statements in such a way that subsidies would be reduced precisely for those carriers that were able to buy out part of the aircraft. But the majority notes that this would strangely discriminate against such airlines, which were never able to receive funds from the National Welfare Fund for preferential repurchase of foreign equipment at 1.5% per annum. According to Kommersant, neither Aeroflot, which bought 18 aircraft, nor Utair, which purchased 35 Boeing, resorted to state aid instruments in their transactions. At the same time, according to Kommersant’s sources in the industry, carriers have already bought out all the aircraft under financial leasing that were available on the market, and the possibility of buying back aircraft under operating leasing in 2023 looks unlikely due to sanctions.

Given that the budget for 2023 initially included half as much funds for subsidies, the search for a mechanism for redistribution and reduction of payments was inevitable, according to transport analyst Elena Sakhnova. The interpretation according to which payments will be reduced to those carriers that bought the aircraft is not devoid of logic, she notes, since such companies will be able to earn on their own liners on international flights. On the other hand, the expert agrees with Kommersant's sources in airlines, who note that this will discriminate against those who were able to transfer the fleet from foreign jurisdictions, but continue to pay Russian lessors.

Despite the reduction in subsidies, the Ministry of Transport expects passenger traffic to grow from 95 million to 101 million people in 2023. Sources of Kommersant, close to the Ministry of Transport, consider such an indicator "underestimated for reinsurance", while it seems hardly feasible to other interlocutors of Kommersant in the industry. The expected growth in indicators is due to the fact that Pobeda and S7 were able to “debermudize” some of their liners only at the end of the 2022 high season. The loading of seats, according to a Kommersant source close to the Ministry of Transport, exceeded 84% on average for the year, and 89% in the third quarter, which “speaks of the most efficient use of resources.” Opponents point out that these figures only indicate the limit of demand in the artificial containment of tariffs.

In its baseline scenario, ACRA assumes that in 2023 the passenger traffic of carriers will be comparable to last year's level. At the same time, Alexander Gushchin, director of the agency's corporate ratings group, agrees with Kommersant's interlocutors in the industry that airports in the south of the Russian Federation are unlikely to open before the end of the year.

Large subsidies in 2022 allowed carriers to keep fares on domestic flights, while some of the clients on international flights were ready to fly at any cost, says Oleg Panteleev, Executive Director of Aviaport. In 2023, the extent to which the industry's costs are covered from the budget will obviously force airlines to raise fares, he believes, which should affect passenger traffic.

Aigul Abdullina

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