Ukraine International Airlines (PS, Kyiv Boryspil) has asked the Ukrainian government to avail it a USD100million stabilization loan to help offset losses incurred as a result of its stand-off with neighbouring Russia and the crisis currently affecting the eastern part of the country.
In a letter to the Ukrainian Ministry of Infrastructure, UIA said Kiev should help shoulder the burden of losses incurred as a result of the decline in the political and economic situation in the country.
"Today we don`t deal with the internal challenges of business in normal conditions, but must cope with systemic failures caused by military action and a profound political and economic crisis in the country," it said.
UIA stated that in addition to the slide in the value of the Ukrainian Grivna by 60%, the closure of the Donetsk and Luhansk airports locally, as well as Russia's closure of Simferopol airport in the Crimea to Ukrainian carriers, had deprived it of significant revenue.
"Moreover, airspace over the Autonomous Republic of Crimea and Eastern Ukraine is restricted, while the Russian Federation banned Ukrainian carriers from operating transit flights over the Russian territory, forcing them to significantly lengthen eastbound flights' routes," a statement read. "Passenger traffic between Ukraine and the Russian Federation has reduced dramatically."
In June, UIA announced it would cut capacity and reduce its fleet by a quarter as a result of depressed demand in its domestic and regional markets.
Drawing parallels with European governments that have also extended bailout packages to their own airline industries in times of financial distress, UIA said Kiev's financial assistance would protect basic national interests adding that any refusal to do so would lead to serious repercussions in the long term.
"The airline and the Government should join efforts to maintain the well-developed route network and to protect the basic national interests of Ukraine. If we fail to maintain the integrity of the existing route network, it will obviously take us long time to rebuild it. Moreover, the financial resources required will substantially exceed the investment needed to support it."
