Russian airline Utair may close due to debts


April 30, Fineko/abc.az. Utair made a statement that it might cease operations because of debts.

The Russian media report that this is stated in the notes to the air carrier’s consolidated financial statements, which are contained in the audit opinion of Ernst & Young.

Last year Utair and its subsidiaries suffered a net loss of 22 billion rubles. As of 31 December, Group's short-term liabilities exceeded its current assets almost by 75 billion rubles, while net assets were down by 30.6 billion rubles.

To ensure its work in the low winter season, the airline allowed the delay in interest payments on seven-year loans. At the same time, creditors did not send letters with waivers of the right to demand early performance of obligations on repayment of outstanding debts.

Debt on such loans in the amount of 65.8 billion rubles at the end of last year is subject to refinancing or restructuring.

"Those factors indicate that there is significant uncertainty that could raise significant doubts about Group's ability to go on its activity continuously," Utair said.

The airline explained its losses by increase in fuel prices and competition in profitable tariffs.