Ural Airlines and iFly were offered to buy their planes from the state

As Kommersant learned, the delay in the re-registration of Airbus Ural Airlines and iFly aircraft into Russian ownership is due to more stringent requirements that the authorities impose on private airlines. Until now, the only company that has been able to complete the settlement of 49 aircraft at the expense of the National Welfare Fund is Aeroflot. According to Kommersant, private carriers were offered leasing with the payment of a deposit of 30–40% of the cost of the aircraft, the obligation to annually spend part of the net profit on their purchase and ultimately receive ownership of the aircraft. Kommersant’s interlocutors on the leasing market call these conditions extraordinary.

As Kommersant learned, Ural Airlines and iFly have still not been able to re-register foreign aircraft as Russian property due to disagreement with the terms of contracts with the future owner – the leasing company NLK-Finance (controlled by the Federal Air Transport Agency and part of the NSC) .

According to three Kommersant sources in the industry, the stumbling block was the requirement for carriers to issue financial leasing (in which the aircraft become the property of the airlines) and pay, according to various sources, from 30% to 40% of the cost of the aircraft as a deposit. In addition, carriers were asked to annually transfer a fixed share of their net profit—30–40%—to offset the repurchase of aircraft. Aeroflot, we recall, received aircraft under an operating lease (under which, after the end of the lease, the aircraft are returned to the owner).

It is unknown who exactly put forward additional conditions for private companies. According to a Kommersant source close to the Ministry of Transport, this is required by the Ministry of Finance. He also admitted that the conditions will be finalized and may be adjusted. Kommersant’s interlocutors in the government say that the financial bloc did not put forward additional demands. The airlines declined to discuss the situation. The Ministry of Transport, the Federal Air Transport Agency, the Ministry of Finance and the Ministry of Economy did not answer Kommersant.

Ural Airlines and charter iFly remain the only private carriers that were able to agree on the terms of the insurance settlement, and their Western lessors were able to obtain OFAC licenses to receive funds. The permits were issued in July and have since been extended for settlements for 19 Ural Airlines Airbuses until October 31, and for three Airbus iFlys until the end of November. The new owner of the aircraft should be NLK-Finance. Funds for the transaction are allocated from the National Welfare Fund as a soft loan for 15 years.

So far, only Aeroflot has been able to successfully carry out such transactions: NSC has paid off with Western owners for 49 of the group’s aircraft. About 167 billion rubles were allocated for 45 aircraft, the cost of another four is unknown, but experts suggest that the total amount could reach 180 billion rubles.

In total, the National Welfare Fund allocated 300 billion rubles for the purchase of aircraft of foreign owners. The cost of Ural Airlines aircraft, according to Kommersant, may be about 30 billion rubles, three long-haul A330 iFly – less than 9 billion rubles. (see “Kommersant” dated September 27). Also under consideration is the application of S7 Airlines, which continues the process of approvals with lessors. According to various sources, these aircraft are valued at 50–70 billion rubles.

At the same time, both Ural Airlines and S7, as Kommersant previously found out, will have to co-finance the transactions from the net profit received in 2022, allocating 13.4 billion and 34 billion rubles. respectively. This condition was established for carriers who received “sanction” subsidies for flights within the Russian Federation last year.

Two Kommersant interlocutors in the expert community believe that the aviation authorities are deliberately offering private companies less favorable leasing terms in order to delay the execution of transactions and “have time to distribute the remaining budget of the National Welfare Fund for Aeroflot aircraft.” In particular, Kommersant’s interlocutor on the leasing market called the financial leasing terms proposed to carriers “nonsense,” since the size of a deposit or letter of credit, as a rule, does not exceed three to four months of leasing payments. The initial payment traditionally does not exceed 10–20%. In addition, the so-called balloon payment is recorded – a large payment closer to the end of the leasing term, which can range from 10% to 30% and represents repayment of the debt. The term of financial leasing is usually 10–12 years. At the same time, even taking into account the new requirements for net profit, Kommersant’s interlocutor doubts the ability of carriers to pay for aircraft “in less than five years,” given the low probability of repeating the record profits of 2022.

In the specifics of the current situation, the behavior of any lessor in the Russian Federation, dictating and tightening its terms, is not surprising, notes Ilya Shatilin, editor-in-chief of the frequentflyers.ru portal. He cites the example of State Transport Leasing Company, which increased leasing rates for its aircraft (see Kommersant on July 11). The question of the advisability of purchasing aircraft on such terms, for example, for Ural Airlines, remains open: “Whether the economics of such a transaction will work out, and whether the carrier will be able to achieve a confident profit when using this aircraft, will depend on whether it can roll out not the most obvious directions”.

The most popular foreign tourist routes are already quite busy today, he believes, and attempts by carriers to place more capacity in Turkey in the summer have led to a significant reduction in the average ticket price.

Moreover, in the case of iFly, the expert believes, the acquisition of three long-haul airliners, which allow the company with six “boards locked inside the Russian Federation” to enter the markets of China or Southeast Asia, “is a matter of survival and in any case makes sense.”

The state, by providing co-financing of transactions, wants guarantees that carriers have really calculated the economy of the fleet and will be able to make money on it, says Roman Gusarov, editor-in-chief of the Avia.ru portal. He finds fairer requirements for private airlines compared to state-owned Aeroflot, “whose fleet is younger and in any case will be in demand at the end of the lease.” Although the Aeroflot group accounts for half of the country’s total passenger traffic, the authorities, he adds, “are obviously interested in preserving the fleet and other large companies, and not a separate group that will not take everyone out.”

Aigul Abdullina