Dec. 11 (Bloomberg) -- Russian billionaire Oleg Deripaska’s Kuban Airlines, the country’s 14th biggest, declared bankruptcy and ceased flying today after running up debt and breaching federal regulations.
“The main reasons for stopping the airline’s operations are the difficult financial situation and failure to comply with a number of provisions mandated by new federal aviation rules,” Krasnodar-based Kuban Airlines said in a statement on its website. The carrier filed for bankruptcy at the Krasnodar Region Arbitration Court.
Under new rules that went into effect at the end of November, airlines must operate at least eight aircraft seating 55 and more. Kuban Airlines, controlled by Deripaska’s Basic Element, flew six planes and three of them had to be returned to leasing companies because of unpaid arrears and failure to make timely payments, according to the airline’s statement.
The carrier had debt and payments that were overdue to air-navigation service providers, airports and refueling companies, the country’s aviation agency, Rosaviatsia, said on its website. Kuban Airlines had total debt of about $300 million, the Vedomosti newspaper reported today.
The exact amount of debt will be determined after the regulator completes an inspection tomorrow, Sergey Izvolsky, a spokesman for Rosaviatsia, said by phone.
Kuban Airlines has sold more than 14,500 tickets for flights until March and some of its stranded passengers will be picked up by other airlines, according to Rosaviatsia.
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