PRESS: Pobeda reports UTair financial problems to watchdog

MOSCOW, Feb 4 (PRIME) -- Russian low-cost airline Pobeda CEO Andrei Kalmykov has sent a letter to the Federal Air Transport Agency’s Director Alexander Neradko saying that the cost of airline UTair’s net assets was negative as of late 2017 and the end of June of 2018, business daily Vedomosti reported Monday citing the letter.

“The lack of finances represents a serious threat to flight safety, high risks of a sudden halt of operations and, as a result, mass violation of passengers’ rights, especially on the eve of the peak of the New Year traffic,” Kalmykov said in the letter sent in November 2018.

Kalmykov said that airlines are obliged to confirm the availability of sufficient financial resources and property to operate aircraft and maintain their airworthiness, and control of this is entrusted to Federal Air Transport Agency. He said he was sending the letter “for information.”

On December 20, 2018, UTair defaulted on a syndicated loan of 11 banks, Vedomosti said. The airline owes a total of 38.6 billion rubles on two syndicated loans and another 17.4 billion rubles to Sberbank, 4.9 billion rubles to units of Surgutneftegas, and 3.3 billion rubles on bonds. The company is holding restructuring talks with the syndicate of banks and makes no disruptions of flights.

Representatives of the Federal Air Transport Agency, UTair, and Pobeda declined to comment.

(65.6601 rubles – U.S. $1)

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