Komi Republic seeks investment for Komiaviatrans

Speaking to reporters, Nikolay Gerasimov, Minister of Investments, Industry and Transport for the Republic of Komi in the Russian Federation, described what is happening with the regional airline "Komiaviatrans" and whether there are any prospects for development.

Question: “The airline was launched, new aircraft were purchased, long-abandoned flights to distant places were resumed, and then what? There was a lull. Why?”

Answer: "Travelling by aircraft to a neighbouring region; it was a fantastic story from the old days of a soviet planned economy that will remain in our memory, but will not return today under any conditions." It was like haymaking in the north, where the cost of the hay did not include the tons of coal or oil required to produce it. Now the economy is different, and the requirements for aviation are different too. Yes, in the 1970s and 1980s we had sandy runways at practically every large village or settlement, remote places like Noshul or Verkholuzya. The indigenous peoples in Syktyvkar could fly home at quite affordable prices. Now, in order to achieve the same, we must either have an absolutely unlimited budget to cover the costs of the airline, or assign a real price for tickets, otherwise flights to those places would never get off the ground. We are already investing to improve public accessibility. The republic’s railways are being subsidized almost 120 million rubles a year to compensate for lost revenue so that suburban trains are not cancelled. And the maintenance of the republic’s airports is being subsidized almost 200 million rubles”.

Answer: “As for "Komiaviatrans", we must accept that we live in an unstable market economy. There was a moment when everything was going right, when leased planes could make the region accessible, when new flights appeared. And then there was the crisis of 2014, the depreciation of the ruble against the dollar, and everything stopped going right. Imagine that you had bought an apartment with a mortgage, you are making your payments, and suddenly your mortgage becomes exactly two and a half times more expensive, and payments grow sharply. In the same situation, you could say that "Komiaviatrans" got hit by turbulence. But I note that dozens of companies ceased trading and disappeared. "Komiaviatrans" survived but its ambitious plans were put on hold. Given time, the airline will eventually continue its development. And we - the government of the region - must support this company. Moreover, there are so many regional airlines in Russia that you can count them on the fingers of both hands. We should be pleased that one of them, ours, considers the needs of society and provides accessibility to hard-to-reach and remote settlements, despite all the difficulties with the economy. And we should not forget that "Komiaviatrans" provides an essential air ambulance service for patients from the regions to the cities. To the general public these functions are invisible because they are performed faultlessly.”

Answer: “The government intends to raise the airline to a new level of quality and we are looking for an investor. We have not lost our ambition to acquire new aircraft and to update the fleet”.

“Question: “There were plans to make "Komiaviatrans" a public company in a joint venture with the Kirov region. Is there any progress in this regard?”

Answer: “Not only with Kirov, we are considering a joint venture to include the Perm region, the Kaluga oblast, and the Kaliningrad region. Airlines do not cover these regions, there are idle airport complexes, so they are interested in cooperation. But their budgets are too small to purchase even a small part of the equity shareholding”.