While aviation has always been a risky industry due to the very high cost of entry, 2024 has been a particularly eventful year where airline bankruptcies are concerned.
Spirit Airlines (SAVE) just emerged from the bankruptcy protection for which it filed in November 2024 by going private, while fellow Florida low-cost carrier Silver Airways announced its own bankruptcy on the second-to-last day of the year.
Another Russian airline faces looming bankruptcy amid prolonged war
All of this pales in comparison to what has been going on in Russia. Three years after the country’s invasion of Ukraine pushed most countries and major corporations to completely sever their relations with Russia, at least 30 of the country’s airlines reached a “burnout point” in which they are likely to cease operation in the coming year.
Some of the biggest carriers facing bankruptcy include Russia’s flagship carrier Aeroflot (AERZY) and its largest private airline S7. Smaller regional airlines include Rossiya, Ural and Yakutia Airlines.
Related: This country to see 30 airlines go bankrupt, cease operations in 2025
While rumors of these bankruptcies have been circulating since November 2024, a new name that will likely face bankruptcy in the nearest future has been reported by several media outlets from the country: Kosmos Airlines. The carrier, which specializes in the delivery of rocket equipment to launch sites, was founded in 1995 and is owned by Russia’s Ministry of Defense.
The news of the looming bankruptcy was also reported by Ukrainian news outlet UNN.
‘The main shareholder stopped financing the carrier’: report
“The main shareholder stopped financing the carrier, and the tax inspectorate has already initiated a lawsuit to declare the company bankrupt,” a report to Russia’s aviation ministry to suspend its operator’s certificate reportedly reads. “Informed sources […] doubt the prospects of saving the airline, despite the available approvals and competencies.”
Prior to this situation, the airline had already trimmed its assets to just one remaining aircraft and reduced the size of its staff by five.
The aviation certificate was suspended on Feb. 20, and according to the country’s media, “the company has 270 days to restore the document, but this requires avoiding the introduction of external management.”
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Russia’s aviation industry has been heavily affected by everything from bans preventing them from flying over many countries’ airspace to the inability to purchase parts from foreign suppliers (in March 2024, three Russian citizens attempting to work for an Ohio plane production company were caught trying to smuggle parts valued at over $2 million back to their home country.)
Novosibirsk-based S7 recently scrapped an $83.5 million project for a plant to build gas engine turbines that was initially approved in 2024 to replace those Western jet parts.
A stalled economy and visa requirements for its citizens also curbed the number of Russians traveling abroad in the last two years to a minimum; the 30 Russian airlines that are most at risk of going bankrupt in 2025 presently carry 26% of Russia’s domestic passenger traffic. The bankruptcies are also estimated to result in the cancelation of more than 400 domestic routes.
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