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Russia Plans Airfare Levy to Fund Delayed Domestic Aircraft Program

Russia plans to introduce a passenger levy on airline tickets starting in 2027 to help finance its troubled effort to build domestic replacements for Boeing and Airbus aircraft, Interfax reported.

The proposed charge would add 500 rubles ($6.20) to domestic fares and 1,000 rubles ($12.40) to international fares, the news agency reported, citing documents from the State Duma’s budget and tax committee.

The Industry and Trade Ministry is developing the levy on President Vladimir Putin’s orders.

According to the committee’s assessment of the draft three-year federal budget, the money would help offset the leasing and operating costs of 258 MC-21, Tu-214, SJ-100 and Il-114-300 aircraft scheduled for delivery under a government production expansion program.

The proposal comes as Russia’s efforts to rebuild its civilian aircraft industry face repeated delays.

An ambitious aviation development plan approved in 2023 called for a 46-fold increase in civilian aircraft production, pushing output above levels reached even in the late Soviet era. Factories were supposed to produce 40 aircraft in 2024, 80 in 2025 and 120 this year.

The program envisaged delivering more than 1,000 aircraft to airlines by 2030, including 142 Superjets built with domestically produced components, 270 MC-21s, 70 Il-114-300s and 115 Tu-214s.

But four years into the effort, airlines have yet to receive any of the promised new aircraft.

Sergei Chemezov, head of the state defense and technology conglomerate Rostec, told Putin at a meeting in May that serial production of the MC-21 would begin only in 2027. Deliveries of the domestically produced Superjet and Il-114 have also been pushed back to 2027 from their original 2023-24 targets.

The government has earmarked 37.3 billion rubles ($462.5 million) for its aviation industry development program in 2027, up 35% from this year. Spending is set to rise to 57.7 billion rubles ($715.5 million) in 2028.

The increases come despite a federal budget deficit that has exceeded the Finance Ministry’s initial projections for three consecutive years. This year’s shortfall is expected to reach 7.3 trillion rubles ($90.5 billion), compared with an initially budgeted 3.8 trillion rubles ($47.1 billion). Next year’s deficit is projected at 5.4 trillion rubles ($67 billion).

The final passenger levy could be higher than the amounts outlined in the parliamentary documents.

Aviation industry sources told Interfax that charges of 700 rubles ($8.68) on domestic flights and 1,800 rubles ($22.32) on international flights were under consideration.

The sources said industry representatives had agreed with the authorities on a financing model under which airlines would include the levy in ticket prices to support the operation of Superjet and MC-21 aircraft.

This article was translated with the help of artificial intelligence and was reviewed by a Moscow Times editor before publication. Learn more about our newsroom's AI policy here.

Read this article in Russian at The Moscow Times' Russian service.

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