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Airline appeal in $14mln dispute against Finance Ministry to be heard on June 5

14:29 17/05/2012

MOSCOW, May 17 - RAPSI. The Ninth Commercial Court of Appeals set June 5 to hear the appeal by UTair airlines against the dismissal to recover $14.3 million from the Russian Finance Ministry.

On March 27, the Moscow Commercial Court dismissed UTair's lawsuit requesting the court to recover the losses incurred in 2008 due to the discount tariffs set for the transportation of children under 12 years old (the discount rate is 50 percent of the tickets price).

The plaintiff stated at the trial court that airlines are obliged to provide this discount, but there is no legislation entitling them to compensation from the state. UTair therefore has taken the matter to court, referring to the Constitutional Court's December resolution which recognized these costs as losses. UTair stressed that although the court bound air carriers to grant such discounts, it also prohibited them from setting off the losses against air fare. Nevertheless, a balance of interest has to be observed and should not be only at the airlines expense. Meanwhile, legislators have failed to propose a system for the recovery of these losses.

The Finance Ministry argued that children under 12 are not a privileged class entitled to discounts by law. Thus, it said the carrier cannot hold the government accountable for the losses incurred by offering the discount.

The court noted in its judgment that "fare setting, including benefits for children from 2 to 12, is the air carriers right, but not [a result of] state regulation, so it does not impose any liabilities on the Russian Federation."

UTair is a leading Russian airline and the second largest domestic carrier. The UTair Group comprises UTair Aviation, UTair Express, UTair-Ukraine, UTair-Cargo, Nefteyugansk OAO, Helisur, UTair Europe s.r.o., and UTair South Africa (Pty) Ltd. UTairs fleet has 184 aircraft.

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Airline appeal in $14mln dispute against Finance Ministry to be heard on June 5

14:29 17/05/2012 The Ninth Commercial Court of Appeals set June 5 to hear the appeal by UTair airlines against the dismissal to recover $14.3 million from the Russian Finance Ministry.
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