How Passengers Suffered on Russian Airlines
The Most Difficult Stop
One of the most painful collapses of passenger airlines in Russia remains the termination of flights by the AiRUnion alliance in 2008. The alliance was created based on one of the largest Russian airlines – Krasair, a controlling stake of which belonged to the state, and the second owner was structures of the company’s CEO Boris Abramovich. By the end of 2007, the alliance transported more than 3 million passengers and entered the top five largest Russian airlines. Other carriers associated with Abramovich were included in it: “Domodedovo Airlines” (49% share), “Omskavia” (70%), “Sibaviatrans” (100%), and “Samara” (around 40%).
In August – September 2008, the companies of the alliance started experiencing problems, coinciding with the peak of the holiday season. The main reasons were the increase in costs for aviation fuel, aircraft leasing, and rentals – they were tied to the dollar exchange rate, later explained by the Accounts Chamber. In the summer of 2008, fuel in Russia was more expensive than in Europe. By August, fuel prices had decreased, but many airlines were on the brink of bankruptcy. At the end of August, fuel suppliers refused to service the alliance’s planes. On August 20, about 2500 passengers could not fly to their destination. Some had to spend over a day at the airport. In “Domodedovo,” passengers on Far Eastern flights waited for departure for three days. Vladimir Putin, who was then the Prime Minister, ordered the allocation of aviation fuel from the Rosaviation reserve fund to resume flights for airlines. The Ministry of Transport agreed to transfer the alliance’s flights from “Domodedovo” to “Vnukovo,” which also took over the alliance’s debts. Later, the airports litigated for many years over the size of these debts.
This turned out to be insufficient – AiRUnion’s passengers had to be flown out by other airlines. The state tried to prevent the bankruptcy of the alliance by transferring their assets to “Rostec” for inclusion in the new state company “Rosavia.” But it never started operating, and Krasair was declared bankrupt.
The Biggest Stop
The largest private Russian airline, Transaero, ceased flights in October 2015. By that time, it was the second largest in the country after Aeroflot in terms of passenger traffic, serving over 13 million people in a year. Since 2014, the company had problems with servicing a debt of around 260 billion rubles, which led to delays in payments to partners. Starting October 1, Rosaviatsia stopped selling tickets for the airline’s flights, but by that time Transaero had sold 1.9 million tickets. The company tried to save itself with new partners: first, the government approved the sale of 75% of its shares to Aeroflot, but Transaero’s owners failed to gather the required package, and the deal did not go through. By October 20, Transaero’s owners signed a deal to sell a controlling stake to another private airline, S7. But the next day, the Ministry of Transport announced that as of October 26, it had revoked Transaero’s operator certificate and transferred some of its routes to Aeroflot.
Passengers of Transaero did not have to spend the night at airports after the flights were stopped. Those who bought Transaero tickets with departure dates before December 15 – about 150,000 people according to the Ministry of Transport’s estimates – were transported by other companies, mostly Aeroflot and UTair. Trips for those who bought tickets for later dates, including the New Year holidays, were in jeopardy. The airline refunded all the money, but instead of the legally required 30 days, customers had to wait several months, as the company explained, “due to the high number of inquiries.”