Russian airline Azimuth is facing a critical shortage of aviation fuel, creating a real threat of a large number of flight cancellations. The carrier has officially complained about the deficit and the sharp rise in prices, which makes the operation of aircraft economically unviable on a number of routes.
Prices are rising, supplies are falling
The situation in the domestic Russian market has worsened at the beginning of summer. According to sources, since the beginning of June, procurement prices for aviation kerosene in the country have risen by an average of 17%. At the same time, actual supply volumes have decreased by about a third compared to those agreed in contracts.
The situation is developing most dramatically in the south of the country. A colossal surge in fuel costs — immediately by 64% — has been recorded at Makhachkala airport. The airline has already warned that a lack of fuel could lead to the cancellation of flights to Caucasian destinations, which are key for the region.
Force Majeure and Logistical Deadlock
At the beginning of the summer, Azimuth's key fuel supplier reduced shipments by 30%. The party explained its actions by "force majeure circumstances" at a number of oil refineries (OR). The airline itself links the current collapse to logistics problems and repair work at production facilities.
Attempts to find alternative suppliers have yielded no results. The company's requests are either ignored, or offers are received with prices several times higher than the market norm.
The Paradox of the Russian Market
The airline called the current situation paradoxical. While global aviation fuel prices have been falling for the third month in a row, prices in Russia are showing a rapid increase. This creates an imbalance in which aircraft operation becomes unprofitable.
Fuel problems in Russia arose several months ago. Earlier, restrictions on the sale of gasoline and diesel fuel were introduced in dozens of regions of the country due to a growing shortage. Reuters reported that due to a lack of gasoline, Russia is considering the possibility of importing fuel by sea. The fuel shortage has already been officially acknowledged in Crimea and a number of Siberian regions.
