Delayed subsidies put more than 200 Russian domestic airline routes at risk of closure

Russia’s Federal Air Transport Agency (Rosaviatsiya) may not distribute 19 billion rubles ($192.4 million) in subsidies for key airline routes by year’s end, Kommersant reports. These funds, which support regional flights bypassing Moscow and flights connecting central Russia with the Far East and Kaliningrad, are vital for over 400 routes operated by 20 airlines.

Typically, the subsidies are allocated by December, enabling airlines to finalize schedules and open ticket sales for January. However, delays have left some regions unable to start ticket sales. Regional authorities are increasingly concerned, and the Defense Ministry, which relies on these flights for service members, has also raised the issue.

Without the subsidies, airlines may need to raise prices, adjust schedules, or cancel routes. Some projections suggest up to half of subsidized flights could be cut. The delay reportedly results from the Transport Ministry’s attempt to consolidate the subsidies, which wasn’t approved by the Finance Ministry.

The Transport Ministry has instructed airlines to sell tickets despite the uncertainty, but as a source told Kommersant, this places airlines in a difficult position: either sell tickets at reduced prices and risk financial losses or pull out from routes, potentially harming their reputation.

Russia’s aviation sector, already burdened by sanctions and airspace restrictions following the full-scale invasion of Ukraine, continues to face major challenges.