Things have gone pretty quiet on the Russian aviation front during the past few weeks.
There were many discussions (CargoForwarder Global reported) at the start of the year as to whether Russian airlines would or could manage to keep their heads above water.
Various carriers were seen to have heavy financial disadvantages due to among others, what they saw as the unfair distribution of the millions of dollars that the Russian government cashes from
foreign airlines overflying their airspace.
On top of this, the Russian passenger market fell apart somewhat due to sanctions imposed on Russia by western governments and the resulting lack of funds for the public to travel to the world’s vacation spots.
UTair was also on that list
Whilst carriers such as Aeroflot, which cashes anyway the lion’s share of the overflight revenues, or Transaero who managed to come up relatively quickly with a new funding plan, most other Russian carriers with the exception of AirBridgeCargo Airlines and their mother company, Volga Dnepr, remained in a critical financial crisis with no apparent government help being foreseen.
It seems however that UTair, still one of the largest carriers in the country, is in the process or has almost finalised a U.S.$ 378 million partial bailout which is said to be supported by a yet undisclosed number of investors.
We assume that these are of Russian origin.
There is said to be a debt restructuring of the carrier to the tune of more than U.S.$ 166 million which is to be used for the payment of outstanding aircraft leases, aviation fuel as well as outstanding airport and MRO charges.
The remaining $ 212 million in question is said to be allotted to various banks and bondholders.
Debts amounting to nearly U.S.$ 1 billion
It was foreseen that there would be an extraordinary shareholders meeting on March 3 of this year with the aim of taking a decision to compensate existing UTair Finance Bondholders by having their existing bonds terminated and replaced by new twelve year UTair issued bonds with a nominal value of around U.S.$ 15 per piece.
It is not clear as to whether this agreement has actually become fact.
UTAir was and in essence still is Russia’s largest charter airline and the so called UTair group includes UTair Helicopter Services, UTair Cargo, UTair-Express, Vostok Airlines and Katekavia.
Whether UTair-Ukraine still exists is not clear.
The UTair group had run up debts which were estimated to be in the region of almost U.S.$ 990 million.
The Russian government indicated in early February that they would be willing to pledge around U.S.$ 205 million to UTair’s bailout, but made it clear that the remaining funds needed are UTair’s responsibility.
Not finished yet - but hopefully on the right road to salvation.
John Mc Donagh