Russian aviation faces tsunami of bankruptcies

More than 30 flight companies in Russia, which drive around a quarter of its total air traffic, are on course to go bankrupt in 2025. The Russian news outlet Izvestia reported that three dozen small and medium-sized airlines are at risk of bankruptcy after the country's economy was described as being at "burnout point." It was reported that the airlines have been struggling with a growing pile-up of debt in relation to foreign aircraft leases. Airlines lease aircraft when they are looking to expand the number of planes they have under their wing, but cannot afford to pay the full cost. The lease then allows the airline to use planes belonging to other airlines, at a certain cost, without having to pay the full cost to own it completely. According to Simple Flying, airlines experiencing financial difficulty are more likely to make lease deals, as the cash becomes more valuable for their short term survival. When sanctions were imposed on Russia in 2022 at the start of its conflict with Ukraine, Western countries barred their airspace to Russia's airlines and foreign airlines cut their commercial ties to them. This meant that many airlines stopped transferring lease payments to Russian aircraft following the imposition of sanctions, meaning the Russian airlines began accumulating debt.<br/>