Russia’s Komiaviatrans rejigs debt, removes bankruptcy risk

Komiaviatrans (KO, Syktyvkar) is implementing a financial recovery plan that has already eliminated the risk of bankruptcy at the airline, the deputy chair and economy minister of the government of the Republic of Komi, Elmira Akhmeeva, outlined in a presentation of the carrier’s progress, Komiinform reported.

The government of the region in northwestern Russia allocated a lifesaving RUB1.8 billion rubles (USD24 million) to the local airline in late October 2021 to ensure the continuation of important but unprofitable, subsidised routes that connect remote communities.

The sum was credited to the company’s account in December, allowing it to pay overdue debts to suppliers, arrears in staff wages, taxes, and other budgetary obligations, preventing the enterprise from going under, Akhmeeva explained.

According to the financial recovery plan developed for the airline by Komi’s Ministry of Economic Development and Industry, as of January 25, Komiaviatrans had implemented a number of measures aimed at restoring its activities including bringing its net assets under control and reducing its accounts payable by RUB3.1 billion (USD41 million) to, as of January 1, RUB1.1 billion (USD14.5 million).

Eliminating the risk of bankruptcy will allow Komiaviatrans to continue work on stabilising its finances by restoring its fleet and increasing capacity, while renovations to improve the infrastructure at the republic’s airports are also projected.

“The plan for the financial recovery of Komiaviatrans is being successfully implemented, which means that one of the tasks set to preserve a socially oriented enterprise has been completed. But that’s not all. The next task facing the department is to ensure sustainable air transportation with the creation of new intraregional routes,” Akhmeeva said without elaborating.