UTair (UT, Khanty-Mansiysk) parent, UTair Aviation, says it will ground 40% of its fleet in 2015 in a bid to cut up to RUB6.5 billion (USD111.4 million) in overheads.
According to an investor prospectus published in conjunction with Raiffeisen Bank last week, the group will retire twelve A321-200s, eleven B757-200s, six B737-800s, two B767-200s, all fifteen of its CRJ200s and six SSJ 100/95s at UTair-Express from its scheduled services fleet. The B757s and A321s will instead be operated on charter services instead.
The group - which includes Katekavia, UTair Helicopter Services, UTair-Cargo, UTair-Express, UTair-Ukraine, and Vostok Airlines - has come under increasing financial pressure precipitated in large by the overall slowdown of the Russian economy due in large part to tightening Western sanctions and a plummeting Rouble.
"In addition, since mid-June 2014 the price of Brent crude oil has fallen from $115 to $60/Barrel at present time, which in turn has led to a weakening of the rouble against the dollar by 200% at present time. Since most of our aircraft leasing contracts are denominated in dollars, this has led to a substantial increase in airline business costs during the year," it said.
Overall, for its 2014 financial year, UTair Aviation expects to post an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) loss of RUB6.8 billion (USD115.49 million) for its current financial year before breaking even next year.
