Ukraine International Airlines to lose $60 million by end of quarantine

The nation’s flagship carrier, Ukraine International Airlines, will lose $60 million by the time the nationwide quarantine ends, its president Yevgenii Dykhne told Ukrainska Pravda news website on April 1.

Ukraine imposed tough restrictions on movement and transportation on March 17,  measures extended until April 24 to prevent the spread of the novel coronavirus. Since then, all air traffic stopped in Ukraine, except for occasional emergency flights in and out of the country operating until March 29.

Such a ban on passenger travel has severely affected aviation companies, which have already lost $113 billion globally. Ukraine International Airlines, or UIA, used to operate 1,000 flights a week to 88 destinations. But it is struggling with the cancellation of flights.

“According to the most optimistic scenario, we estimate our losses at $60 million,” Dykhne said.

Despite the grim prognosis, Dykhne said UIA managed to pay $14.5 million it owed for leases, salaries, rental of premises, appliances and electronic programs. Dykhne said he still had to pay “two-thirds of the wages” and to try to keep all UIA employees.

With debts accumulating, Dykhne called on the Ukrainian government for help.

He asked for subsidies to UIA and the aviation industry enterprises, or at least a “stabilization loan with clear repayment periods,” and said that the state could “mobilize its own banks to help the aviation industry.”

He also evoked the possibility of canceling payments for air navigation services and airport charges for a short period of time after the quarantine is lifted.

“The best option for us is state support,” Dykhne said.

Dykhne thinks the state hasn’t helped the private business yet because billionaire Ihor Kolomoisky co-owns the enterprise. Kolomoisky is accused in lawsuits of massive bank fraud that cost taxpayers $5.5 billion and forced the state to nationalize PrivatBank in 2016.

“There is no dialogue,” he said. “For some reason, the government believes that everything done for aviation is done for Kolomoisky, and it’s not in the trend to do anything for Kolomoisky now. Therefore, nothing happens.”

He also criticized the government’s management of the crisis, blaming the government for giving contradictory orders about stopping air traffic on March 17, only to backtrack later, asking for special flights to bring Ukrainians and foreigners back home.

“There was a feeling that these actions are quite ill-conceived and situational.”

UIA faced intense criticism for sharply increasing prices for such emergency flights a few days before the closure of Ukrainian borders on March 16 and the closure of its airspace to commercial flights on March 17.

But Dykhne blamed the skyrocketing prices on the state, saying that UIA was “forced to pay all services to the state,” which reflected on the final price of the tickets.

Besides, he said, the prices were calculated by artificial intelligence to fit the market demand at the time.

No news from Iran

In January, UIA flight PS752 with 176 passengers and 11 crew members on board was shot down by Iran near the Tehran airport. No one survived.

Despite the ongoing investigation, Dykhne said he had no “information that the technical investigation in Iran has been completed, which means that no one’s fault has been established in this disaster.”

“We do not receive any news,” Dykhne said.