In a worrying twist for Russia’s airline industry, more than 30 Russian airlines, which collectively handle over a quarter of all domestic passenger flights, are facing serious financial trouble and could go bankrupt in 2025. Most of these struggling airlines are small to medium-sized, with fewer resources to fall back on when compared to larger carriers. And now, a tax plan that was meant to offer relief might end up being the final push that many of these airlines simply can’t handle.
Why Are These Airlines in Trouble?
The trouble started with international sanctions placed on Russia in 2022, which came with heavy financial consequences. Russian airlines, especially smaller ones, rely on foreign planes—primarily from Western companies—to carry out their operations. Typically, they lease these planes, making monthly payments to foreign leasing companies. But since the sanctions, Russian airlines have stopped paying for these leases, leading to an increasing debt load.
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