A loan trades future profit for an aircraft today. Management takes it out and the whole airline pays it back, every week, whether anyone flew or not.
Terms
How much you can borrow
The limit is 20% of the collateral value of the aircraft the airline owns plus twelve average weekly operating profits (averaged over the last four weeks), capped at ₽2 bn. Collateral value is the aircraft’s market price, but no more than what went into it: the purchase price plus maintenance work.
Missed payments
- The payment is always debited on schedule, even if it takes the account negative. Such a payment counts as missed, and a 0.1% daily penalty accrues on the outstanding balance.
- The first payment that leaves the account positive clears the missed count.
- Miss four in a row and the bank sells one of the airline’s aircraft at 75% of its collateral value, and the proceeds cover the deficit.
Early repayment
You can close a loan at any time: the principal plus half of the remaining interest.
The price of scale
A large airline pays two surcharges: one for administration, based on the list value of the whole fleet leases included, and one for the number of lease contracts. Past a certain point, each extra aircraft costs more than it brings in.
When the debt stops shrinking
A small negative balance leads nowhere on its own. If the account is in the red and the airline has spent more than it earned for a second week, it is placed under watch: a warning arrives, but nothing is taken. The standing and deadlines are in the “Company standing” block on the Finance tab.
Debt deeper than the overdraft limit puts the airline straight into administration. Aircraft, crews and bases stay, but the clock runs: from a month for a small overshoot down to three days for a huge one. What gets you out:
- Selling aircraft: the cash arrives at once and their costs stop.
- Returning leases early: you stop paying for the aircraft immediately.
- Closing or mothballing surplus hubs: their upkeep is usually the real hole.
- Dropping or pausing loss-making lines in the “Loss-making lines” block under the schedule. Judge by the actual figure in the “Estimate · actual” column.
If the debt is still there when the term ends, the airline is liquidated: owned aircraft are sold, leased ones go back, crews are released. Whatever is left after the debts, if anything, goes to your personal account.