Utair received on the facts – Newspaper Kommersant No. 240 (7441) dated 12/26/2022

As it became known to Kommersant, the Federal Air Transport Agency is not going to demand a return of 4.6 billion rubles from Utair. “anti-sanctions” subsidy, despite the fact that in April-October the carrier flew less than 60% of the last year’s levels in the country and increased flights abroad by 3.6 times. Lawyers confirm that the initial requirements for receiving funds are a raid of at least 72% within the Russian Federation. But in the Federal Air Transport Agency, Kommersant said that they had concluded an additional agreement with the airline and paid for the actual flight. Experts consider the decision unfair to other market participants.

As Kommersant found out, the Federal Air Transport Agency will not demand the return of 4.6 billion rubles. subsidies for flights within the country from the airline Utair (PJSC UTair). The government allocated 100 billion rubles. subsidies for flights within the country in April-October, the Federal Air Transport Agency distributed them among 32 airlines. Utair claimed 6.9 billion rubles, but in September, under an agreement with the Federal Air Transport Agency, 2.3 billion rubles were deducted from the carrier.

Under the terms of Decree 761, 90% of the company’s passenger turnover in the same period of 2021 was taken as the basis for the subsidy. In order not to return funds to the budget, the carrier is obliged to fulfill at least 80% of the base: the minimum flight time must be at least 72% of the levels of April-October 2021. According to Kommersant, Utair’s passenger turnover from April to October amounted to 4.35 billion passenger-kilometers (pkm), or 57% of the 2021 level. Flights abroad increased by 3.6 times, to 1.905 billion pkm (see Kommersant of November 14).

As Rosaviatsia explained to Kommersant, the rules of the resolution provide for the possibility of concluding an additional agreement with the airline providing for a reduction in the amount of the subsidy, and as a result, the carrier received subsidies “in the amount of actual passenger traffic.” To the question of Kommersant, based on what provisions of the government decree, the minimum bar for the provision of subsidies in this case was not taken into account, the department did not answer. The Federal Air Transport Agency proceeds from the fact that the result of the subsidy is to provide airlines with a passenger turnover of at least 90 billion pkm (excluding other subsidy programs) in April-October. “This result has been achieved,” they noted. The Ministry of Transport did not comment.

In the airline itself, commenting on the decline in results for the half year, they told Kommersant that “the target indicator was adjusted by agreement with the Federal Air Transport Agency.” Now the head of the carrier, Andrei Martirosov, told Kommersant that he considers the previous explanations to be exhaustive. “We didn’t violate anything,” he assured. At the end of November, the governor of Yugra, Natalya Komarova, said that she did not see the risks of withdrawing the subsidy received (see Kommersant-Ural, November 23).

The condition for subsidies for each individual airline is the fulfillment of 80% of the result, which is tied to the formula for calculating the amount of the subsidy, “and one of the indicators of the formula is the condition for a minimum flight time of 90% of the levels of April-October 2021,” emphasizes BGP Litigation advisor Vladislav Rikov.

Lawyers from the three large firms say the rules “contain vague language and incorrect references to clauses that could be grounds for obtaining funds that bypass the minimum requirements.” Thus, paragraph 24 states that “the value of the result of granting a subsidy for an individual Russian airline is established on the basis of an application in accordance with paragraph 8.” But paragraph 8 does not contain targets and discusses only the requirements for a company that should not be in a state of reorganization or bankruptcy.

The authorities have already extended the subsidy program for 2023 in the same parameters. Some sources of Kommersant in the expert community fear that “in the event of further distribution of the subsidy on individual terms”, the volume of traffic will be supported by “overfulfilling the bar by the three largest players who are limited in earnings on international flights”, while “other participants will be able to earn on Abroad with budgetary co-financing.

One of the interlocutors noted that with the initial explanation of the wide possibilities of “additional agreements”, other airlines actively flying abroad could also apply for a subsidy for “actual flight in the country”. Another interlocutor of Kommersant added that it would be fair to provide additional incentives for carriers who overfulfilled the program within the country. In particular, according to Kommersant, Aeroflot increased passenger turnover over the reporting seven months by 38%, Ural Airlines – by 9.5%, S7 – by 8.5%. In mid-November, the Federal Air Transport Agency redistributed between the companies 3 billion rubles, “saved”, including on Utair: Aeroflot received 524 million rubles. (requested 2.3 billion rubles), Ural Airlines – 637 million rubles. (2.8 billion rubles), S7 – 968 million rubles. (9.9 billion rubles).

“Issues of fairness are not applicable to the current reality, when the main task of the state is to demonstrate the stability of aviation in the face of sanctions,” says Andrey Kramarenko, an expert at the HSE Institute of Transport Economics. “The point of the subsidy was not to stimulate airlines, but to maintain tariffs at an acceptable level.” He adds that the real solvent demand for flights to the Russian Federation is “close to exhaustion.” “A rational solution would be to distribute the subsidy in proportion to the current actual flight time, but on an equal footing for all airlines and conditions that are initially clear to everyone,” the expert believes.

Misappropriation of budgetary funds in the situation with Utair is not seen, the funds were provided specifically for the purpose of subsidizing, Dmitry Gorbunov, partner at Rustam Kurmaev and Partners, believes. It is the question of the legality of receiving these subsidies that can be considered, he admits. Control over compliance with the conditions for granting a subsidy is entrusted to the Federal Air Transport Agency itself, notes the lawyer of KSK Group Alexander Sharapov, but, according to the Budget Code, the Accounts Chamber also has such powers. The Accounts Chamber told Kommersant that they would “consider this issue” as part of the audit of budget execution for 2022.

Aigul Abdullina