AiRUnion Agrees to Pay Debts

AiRUnion on Thursday pledged to resume flights from Moscow after reaching an accord on paying debts for jet fuel. The deal came after AiRUnion companies delayed flights at Domodedovo and Krasnoyarsk over fuel debts.

AiRUnion, majority-controlled by state corporation Russian Technologies, agreed on a schedule of payments with fuel suppliers and all the delayed flights would leave Thursday, AiRUnion spokesman Olga Trapeznikova said.

Passengers were stranded after airport authorities and fuel companies decided to force carriers to accelerate payments for debt incurred by a "sharp increase" in fuel by halting servicing for carriers, AiRUnion said. Advance ticket sales for the summer season could not cover the higher prices, the group said.

AiRUnion apologized in a statement to passengers stranded at airports.

Last month, Prime Minister Vladimir Putin urged the Federal Anti-Monopoly Service to tackle record prices for jet fuel, and LUKoil and Gazprom Neft cut prices this month. AiRUnion said its carriers could not cover fuel expenses with ticket sales, while the debts were complicated by a transfer of assets to Russian Technologies.

MDM Bank warned Thursday that AiRUnion's debts could indicate the alliance was close to bankruptcy. "This may well be due to ... state-controlled banks [being] almost unable to add to their already huge exposure to Russian Technologies-like assets," the bank said in a note to investors.

(Bloomberg, MT)