The Russian government is to guarantee loans worth around $160 million to Transaero Airlines to help the company to continue operating.
Transaero, which is Russia’s second biggest airline, has been struggling with its debts due to the country’s recent economic problems, which has seen a slump in the value of the Russian currency against the US dollar.
In a move to stabilise the airline’s finances, Russian prime minister Dmitry Medvedev has signed a deal that underwrites a three-year nine billion rouble loan to Transaero from Russia’s VTB Bank.
Transaero, which flies from Heathrow to Moscow, said in a statement: “The government has pledged its support to Transaero, one of the backbone companies of the Russian transport industry.
“Meanwhile VTB Bank will assign the necessary credit funds to the airline during this period of drastically changing macroeconomic conditions.”
As part of the deal, Transaero has agreed not to raise airfares on its domestic flights within Russia and also cut prices by 5-7 per cent for internal routes on which it is the only carrier.
“Transaero Airlines will continue to focus on enhancing the reliability and accessibility of air transport for Russian residents,” said the airline.
“Particular attention will be given to flights to southern resorts within the Russian Federation - Transaero will increase its passenger capacity on those routes - as well as to air services to Russia’s Far East from Moscow and St Petersburg.”
Transaero began operating in 1991 and carried 12.5 million passengers last year.
“Transaero Airlines expresses its sincere gratitude to all its passengers, as well as partners, banks, leasing companies, airports, fuel companies and suppliers,” added the airline.