Russia's largest cargo airline, Volga-Dnepr Group, is laying off more than 200 pilots at its subsidiaries AirBridgeCargo and Atran due to sanctions against Russia and the inability to operate Boeing aircraft. Restrictions on flights to Western countries hit the company's business hard, with international flights accounting for almost 90% of the company's traffic. RBC reports on the problems of the company, citing sources.
Due to the cuts, it is the company's subsidiaries that use Boeing aircraft, AirBridgeCargo and Atran, who have a total of 27 aircraft of the American aircraft manufacturer (models: 737/747/777) in their fleet. The Volga-Dnepr fleet also has 11 Russian An-124 and Il-76 aircraft. Official layoffs in companies began in July, sources say, but the first wave of layoffs took place back in March-April, then some of the pilots quit on their own, and some left by agreement of the parties.
“The company's resources are not unlimited. Number optimization is a necessary measure. It is being carried out in stages in order to be able to mothball the fleet, ”a company representative told the publication.
According to the publication, more than 300 pilots worked at AirBridgeCargo at the beginning of 2022, and about 110 at Atran. Volga-Dnepr plans to keep a certain number of crews in case the company manages to agree with the Ministry of Transport on the return of part of the foreign ships taken in leasing. We are talking about 14 out of 16 cargo Boeing 747s, which are registered with AirBridgeCargo. The company wants to replace American ships with Russian Il-76 and Il-96.
Volga-Dnepr is considered the largest air cargo carrier in Russia, accounting for approximately 51% of the Russian air transportation market. However, EU sanctions, imposed in response to Russia's military aggression against Ukraine, closed the European transportation market for the Russian company, which accounted for a significant share of the company's income. Freight traffic to Frankfurt alone exceeded 17% of the company's total cargo turnover last year. Sanctions on the supply of spare parts for aircraft, coupled with the requirement to return American aircraft, paralyzed the work of the subsidiaries of the air carrier.
The company tried to restructure the business by creating another enterprise in the UAE in order to re-register ships in another jurisdiction. A partnership was planned with the local Etihad, but after lengthy consultations, the Arab company refused to partner because of too high risks of sanctions. Now the company intends to reconfigure the business for the Russian market.
The state contract with the Moscow authorities for 9.5 billion rubles, which Volga-Dnepr concluded on April 1, helped. The company should receive about 907 million rubles from the federal budget in the form of subsidies to reimburse operating expenses under the conditions of sanctions, and this money is allocated, among other things, in order to “preserve the jobs of aviation personnel specialists.” In 2021, the group's revenue amounted to 212 billion rubles, so assistance from the Russian authorities will not exceed 5% of this amount. However, the companies do not fall into despair and say that the load is currently very high, and they expect such rates to continue until mid-2023.
The Russian aviation industry has faced very serious pressure due to the sanctions of Western countries, the number of routes for airlines has sharply decreased, and the travel time for some destinations has increased significantly. Companies have to revise the supply chains for servicing the liners, or even completely dismantle some foreign ships for spare parts. Not without cuts: Aeroflot and its subsidiaries recently started laying off flight attendants.
