Russian economy meltdown as aviation industry in turmoil with 30 airlines ‘going bankrupt’ | World | News

Russia‘s aviation industry is set to become the latest sector to face a tsunami of bankruptcies as Western sanctions bite, according to reports. The latest news coming out of Russia‘s aviation industry is that the country’s largest private airline is scrapping its £65 million turbine engine plant that was set to be built in St Petersburg.

Construction hadn’t even started, and the project is now facing major delays.Former Chief of the National Bank of Ukraine, Kyrylo Shevchenko, said on X: “Russia’s largest private airline, scraps its $83.5M gas turbine engine plant in St. Petersburg — before construction even began. “Approved in 2024, the project was meant to replace Western jet parts lost to sanctions.

“Now, timelines are ‘significantly delayed,’ and Moscow is slashing SSJ-100, MC-21, and Tu-214 engine production targets by 50%.

“The Kremlin’s “import substitution” drive is unravelling — along with aviation execs caught in the fallout. “

This comes after reports that more than 30 Russian airlines face bankruptcy in 2025.

Russian outlet Izvestia reported in November that the airlines could go under due to growing debt from leasing out foreign aircraft.

The rising debt was caused by Western sanctions, cutting the airlines off from their creditors. This meant payments could not be made and resulted in debts accumulating over time.

Russia‘s economy is grappling with rampant inflation, forcing the Russian Central Bank to hike interest rates to a huge 21%.

However, US President Donald Trump‘s efforts to secure a peace deal between Russia and Ukraine could provide a boost to Moscow’s economy.

As the Daily Express reported on Friday, the Russian rouble has enjoyed a rally since Mr Trump took office, thanks partly to his public clashes with Ukrainian President Volodymyr Zelensky.

However, on Friday, Mr Trump said he is “strongly considering large-scale sanctions” as peace talks continue to falter.