Russian airline VIM-Avia crashes due to debt

Published 26.09.2017 20:26

Tens of thousands of passengers were stranded Tuesday as Russia's 10th largest carrier, VIM-AVIA, cancelled dozens of flights due to heavy losses and tour operators called on the government to avert an industry-wide crisis. The private airline, which has cancelled all of its charter flights, said it was planning to go into a receivership due to financial hardship. VIM-AVIA is Russia's 10th largest carrier in terms of passenger numbers. The Association of Tour Operators appealed on the government to avert an industry-wide crisis, saying the battered airline had accumulated between 3 billion rubles ($52.2 million) and 10 billion rubles ($174 million) in debt. The association added that some 200,000 passengers including 100,000 Russian tourists who had planned to go on vacation in Russia and abroad may be affected.

"The suspension of the airline's work will first and foremost affect these flights which would lead to a collapse of the tourist and aviation markets," the industry group said. Experts say that Western sanctions, low oil prices and a weak ruble have eroded Russians' purchasing power and dealt a heavy blow to the aviation industry, but also others. A decision by the Russian government to ban charter flights to Turkey amid tensions with Ankara in 2015 also affected airlines like VIM-AVIA.

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