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. Last Updated: 07/27/2016

Cargo Airlines Look for Lift From State

A group of air cargo carriers are appealing to the government for help, saying a lack of cash and government support has placed the civil aviation sector on the brink of a collapse.

Twelve airlines, including Abakan-Avia, Atlant-Soyuz, Ilavia, KrasAir, Rus and Tesis, fired off a letter to the State Civil Aviation Service last week that implored the government to back credits to upgrade aging fleets and provide customs and tax breaks on imported equipment.

"Most of the airlines and Russia's civil aviation as a whole is on the verge of collapse," said the letter, a copy of which was obtained by The Moscow Times.

Airlines direly need government support for the purchase of new aircraft and the creation of a state leasing program, the letter said.

It was unclear Monday when the government would respond to the appeal. The issue of assisting the airline industry has been under debate in government circles for months, and officials have promised to announce a decision this year. But with foreign debt payments taking priority, the government has put off making a decision four times in March alone.

On the surface, the cargo airlines look set to fly into high profits. Domestic airlines carried 530,000 tons of cargo last year, up from 493,800 tons in 1999, according to the civil aviation service.

Leading air shippers said they were expecting higher yields in 2001. Aeroflot, which carries 60 percent of its cargo in passenger planes, forecasts a 10 percent increase on 2000's high of 100,000 tons.

No. 3 cargo air carrier Atlant-Soyuz, which carried about 40,000 tons in 2000, hopes to increase the volume to 60,000 tons. It also wants to launch scheduled flights to China, a destination traveled almost exclusively by Aeroflot and Russia's largest private cargo airline East Line, while increasing the number of chartered flights to the United Arab Emirates and possibly Europe.

But with the nation's 294 commercial airlines raking in a meager combined profit of 2.3 billion rubles ($80 million) last year, times are tough.

"Airlines do not enjoy super profits, and almost all revenues go into fleet maintenance," said Olga Zhitnikova, commercial manager at Tesis, which owns two Il-76s and leases seven more.

Thin profit margins mean that Russian airlines can ill afford to meet looming technological requirements, not the least of which is a European Union rule demanding that as of April 1 all aircraft flying in its airspace must be equipped with Traffic Collision Avoidance Systems, or TCAS. A TCAS — which must be imported since none is made in Russia — costs $200,000.

"The absolute majority of airlines … don't have enough financial resources to upgrade their fleets with the requirements," the airlines' letter said.

Andrei Goryashko, head of Aeroflot's cargo department, said six of the airline's cargo fleet of 11 Il-76s will have TCAS installed by the deadline.

Atlant-Soyuz will have TCAS installed on most of its Il-76 craft by the deadline, said Andrei Derevyanko, director of the airline's flight and technical complex. Tesis has equipped one of its two Il-76s and is in negotiations with the owners of the leased aircraft. Rus's fleet of seven Il-76s will have four equipped with TCAS.