Drop in airline traffic down to weak rouble

A sharp drop in traffic for Russia’s airline industry has been attributed to the weak rouble and rising unemployment.

The country’s Federal Aviation agency reported this week that there was a fall of 16.5 per cent in traffic during the six months to July.

According to economic analysts, a weakening rouble and an increase in unemployment have made trips abroad less affordable than last year for the Russian population.

Figures from the aviation authority show that the country’s airlines transported 5.25 million travellers in July, down 10.8 per cent year on year.

It is believed some Russian airlines are close to bankruptcy and have commenced discussions on restructuring.

Last week, Konstantin Chernyshev, head of research at leading Russian financial corporation Uralsib, noted that a recent slump in value for the rouble has made servicing debts more expensive for Russian companies across all sectors.

Many Russian organisations possess debts dominated in international currencies, he observed, meaning debt servicing becomes more expensive the weaker the rouble becomes.

Market analysts have acknowledged that the rouble was as strong as 23.15 to the dollar in August 2008 and as weak as 36 to the dollar in February 2009.

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