The transatlantic air travel corridor between the U.S. and Europe continues to be known for its reputation of being cutthroat…
Russia’s Aeroflot Secretly Carries Passenger Abroad Under Guise of Cargo
Russian Airlines, commonly known as Aeroflot, has been secretly operating exclusive luxury flights abroad for approximately a month despite Russian Government’s international travel ban, the business daily Vedomosti, which was previously a joint venture between Dow Jones and the Financial Times, reported.
As Russia’s coronavirus cases continue to rise at one of the fastest rates in the world, the Russian state banned international flights for all airlines at the end of March in a bid to battle the COVID-19 pandemic. The country allows only government-authorized repatriation flights to bring back Russian citizens who were stuck abroad due to lockdowns. Russia’s flag carrier also stopped selling tickets for international flights until August 1, when the airline thinks the state will lift bans on some international destinations.
To operate these repatriation flights, airline companies have to get permission from the Russian Federal Air Transport Agency and the aviation authorities of the countries where such flights are planned to be operated. However, Aeroflot is somehow continuing to carry passengers abroad as reported by Vedomosti citing employees of three Russia-based airlines.
According to employees of three airlines, including Aeroflot itself, the company has been bypassing the ban by operating passenger flights as cargo.
“Aeroflot has been operating flights to New York, Paris, London, Frankfurt, Seoul and Tel Aviv since at least early June. These flights are officially registered as cargo, but tickets are sold with permission from Russian Federal Air Transport Agency,” Vedomosti cited two Aeroflot representatives.
It is noted that these exclusive flights are not publicized and passengers learn about ticket sales through the grapevine. Due to the closed European borders, only EU citizens or Russians who have citizenship or a residence permit in one of the European countries are allowed to buy tickets for these flights.
According to flight-tracking data, Aeroflot has operated flights to Frankfurt, Paris, London, Rome, Barcelona, Nice, New York, Seoul and Tel Aviv since the beginning of June.
Aeroflot has yet to comment on whether it raised some cash through back door.
Aeroflot Dives Deep into a Debt Hole Amid Pandemic
The largest Russian carrier is receiving bank loans to get its economic situation back on track and cover the almost complete absence of revenue due to coronavirus quarantine.
According to the results of its financial report covering the first quarter, the short-term debt of the company grew 3.3 times – up to $590 million.
Even in the pre-pandemic period, the Russian flag carrier was losing revenue due to decreasing passenger numbers. In the period covering January-March, Aeroflot registered a 20% drop in passenger traffic on international flights and lost 5% of passengers on domestic flights. The airline company’s revenue dropped by 10.6% while net loss increased by 43% to $320 million.
The company’s cash flow from operations was barely enough for half of the aircraft leasing payments. To cover the budget deficit, Aeroflot raised $540 million of loans and borrowings, increasing its debt by 290%, to $660 million dollars.
When the coronavirus pandemic broke out in April and May, the situation further deteriorated. The airline had to get bank loans totaling more than $523 million dollars during this period. The average rate of increase in debt reached $8 million per day, or approximately $350,000 per hour. Due to the fact that air traffic slumped by 93%, the company lost more than $1.1 billion in two months.
The ban on international flights might be lifted as of July 15 with flights to 15 countries, including China, South Korea, Turkey and some European countries.
“You may remember I expressed hope some time ago that we may start the international flights in July. This hope is still alive so far. As soon as we make sure that air traffic inside the country is safe, we will be ready to release our nationals to wide open space of the world’s atmosphere. I think we are not yet ready for that now,” said Transport Minister Evgeni Ditrikh on Friday.
Russian Prime Minister Mikhail Mishustin earlier requested the federal aviation authority to review the options to resume international flights that were suspended due to the coronavirus pandemic. At the end of March, Russia completely banned international scheduled and charter flights with the exception of export, cargo and mail flights.
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