Sberbank Leasing and VEB Vnesheconombank have suspended their plan to finance a new Russian regional airline, Interfax has reported.

"We have prepared everything but there is no proper demand. If the government returns to the project, we will be ready to discuss it," Sberbank CEO German Gref said.

The two state-owned banks were previously reported as discussing either establishing a new carrier or financing a start-up airline. The topic was linked to the ongoing financial issues of UTair (UT, Khanty-Mansiysk), which could have served as the foundation for the new airline. Sberbank is UTair's single largest creditor, although the airline is also indebted to a number of other financial institutions.

Gref underlined that the banks submitted their plan to the Ministry of Transport but saw no support from the government.