MOSCOW, June 5 - RAPSI, Natalya Belova. The Ninth Commercial Court of Appeals has left Moscow Commercial Court's decision in force by dismissing UTair's lawsuit to recover $13.27 million from the Finance Ministry, the court told the Russian Legal Information Agency (RAPSI/rapsinews.com) on Tuesday.

The company's appeal has therefore been turned down.

On March 27, the Moscow Commercial Court rejected UTair's lawsuit requesting the court to recover the losses incurred in 2008 from the discount tariffs for the transportation of children under 12 years old (the discount rate is set at 50 percent of the ticket 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 took 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 these discounts, it also prohibited them from setting off the losses against air fares. 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 has 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. UTair's fleet has 184 aircrafts.