MOSCOW (Reuters) – Russia’s Aeroflot Group <AFLT.MM> can receive up to 7.9 billion roubles ($106.8 million) in state aid as part of a package to support the country’s aviation industry during the pandemic, a government document and Reuters calculations showed.
In the document published late on Wednesday, the government issued an order to distribute 23.4 billion roubles of state funds to airlines suffering losses due to the coronavirus crisis, which has hammered air travel as people have been asked to stay at home to curb the outbreak.
Russian airlines’ passenger traffic fell almost 92% year-on-year to 771,200 people in April, federal aviation agency Rosaviatsiya said on Tuesday. Passenger traffic in March fell by more than 28%.
Aeroflot Group, which includes Russian flag carrier Aeroflot as well as Rossiya, Aurora and low-cost airline Pobeda, is 51.2% state-owned and has a Russian market share of almost 50% based on 2019 data.
According to conditions outlined in the document, though, it can only claim one third of the grants on offer. Other major airlines, including S7 Group, UTair <UTAR.MM> and Ural Airlines will be entitled to the remaining 15 billion roubles.
Rosaviatsiya confirmed Reuters’ calculations, saying Aeroflot could receive up to about 8 billion roubles in government subsidies.
Aeroflot did not respond to a request for comment.
The government decree mentions a “group of companies” that can claim no more than 33.7% of the total subsidies. One of the group’s airlines must be at least 50% state-owned, while the group’s passenger traffic in 2019 must have exceeded 20 million people.
Only Aeroflot Group meets all these criteria.
Flag carrier Aeroflot’s passenger traffic fell 95.2% in April, to 147,700 people, while Rossiya’s fell 92.2% to 65,700.
(Reporting by Gleb Stolyarov; Writing by Alexander Marrow; Editing by Pravin Char)