Russian air travel bankruptcies not expected despite 2020 traffic drop

MOSCOW, Nov 19 (Reuters) - Despite a forecast drop in passenger travel of around 50% this year, Russia’s federal aviation agency said on Thursday it does not expect airport or airline bankruptcies, with the industry ravaged by the ongoing COVID-19 pandemic.

Russia grounded flights abroad in March to curb the spread of coronavirus and only began reopening some routes in August, but has gradually added more destinations to the list. During a lockdown period in the spring, some airlines saw traffic fall as much as 90%.

“We currently do not expect bankruptcy of airports or airlines, although the financial situation is quite difficult,” said Rosaviatsiya’s deputy head Alexei Novgorodov, speaking at a transport forum.

As the industry watchdog, Rosaviatsiya monitors airlines’ financial state and may have additional information on the likelihood of the industry receiving state support packages. The government distributed 23.4 billion roubles of state funds to airlines suffering losses back in May.

National carrier Aeroflot raised around 50 billion roubles ($655.28 million) in state funds as part of a secondary share offering last month.

Novgorodov said Russian airlines would miss out on around half the number of passengers in 2020, compared with a year previously.

Preliminary Rosaviatsiya data showed passenger traffic fell by 46.1% to 59.44 million people from January to October.

Despite the resumption of some routes, many international ones remain closed, posing a challenge to airlines, for which international routes are more profitable.

$1 = 76.3030 roubles Reporting by Gleb Stolyarov; Writing by Alexander Marrow; editing by David Evans