Russia to slash subsidies for civilian aircraft programs by a quarter 

Russia is planning to slash the amount of funds it devotes to its civilian aircraft programs by nearly a quarter, according to reports that have appeared on Russian media. 

Amendments to the federal budget, if approved, aim to reduce subsidies for the acquisition and servicing of Russian-made airliners and helicopters from 101.2 billion rubles (US$1 billion approximately) to 78.8 billion rubles (US$788 million), a drop of 22%.  

Aircraft leasing companies and airlines are expected to be among the first to be hit by the budget cuts. However, industry sources quoted by Russian financial newspaper Kommersant have minimized the impact of this measure on the industry, since Russian airliner programs, particularly the mid-sized MC-21 airliner, are already lagging behind schedule. Therefore, those sources claim, practically no aircraft would be affected in the very short term.  

Government-owned aerospace and defense conglomerate Rostec, which produced both the MC-21 and the SJ-100 (the updated version of the Superjet regional jet), has reiterated that it is sticking to plans to start deliveries of both aircraft by 2026. 

Another matter, however, is how this would affect investment decisions by leasing operators, which must take longer time periods into consideration.  

Among the targets of this round of cuts are the subsidies that allowed leasing companies to lower the interest rate costs of loans taken out to finance aircraft acquisitions. In the current environment of high interest rates in Russia, the effect on the industry may not be trivial. The post Russia to slash subsidies for civilian aircraft programs by a quarter  appeared first on AeroTime.

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