Moscow set to subsidise struggling ruble-hit airlines

MOSCOW, Dec 22 (AFP): Moscow is to set to step in to support troubled Russian airlines badly hit by the collapse of the ruble and falling passenger numbers.
Deputy Prime Minister Arkadi Dvorkovitch said Monday he was considering credit guarantees and subsidies worth up to 28 million euros ($34 million) to support struggling airlines.
He told the business daily Vedomosti that two of the top three domestic airlines, Transaero and UTair, were already in difficulty.
"Firstly (we are looking at giving) companies credit guarantees which are very powerful because they give banks an interest in resolving the problem," he said.
"Second comes subsidies for domestic flights. We are ready to widen the number of subsidised routes to make connections viable," he added.
The newspaper said Transaero will begin to benefit from credit guarantees this week.
Airlines have been among the first hit by the currency crisis because of the international nature of their business and the landing charges they must pay in foreign currency.
The price of air tickets has jumped twice by 12 per cent and then 14 per cent as the ruble has tumbled against the euro and the dollar.