December 8, 2014 / 1:42 PM / 3 years ago

Russian airline UTair faces bankruptcy lawsuit

MOSCOW, Dec 8 (Reuters) - Russia’s third-biggest airline UTair is facing a bankruptcy lawsuit after struggling to pay its debts because of a devaluation of the rouble and an economic downturn.

With the Russian economy heading for recession following Western sanctions over the Ukraine crisis, some analysts expect Russian airlines to see losses deepen, likely forcing them to reduce their fleets and seek state support.

Russia’s Availeasing said on Monday it had filed a lawsuit over 3.5 million roubles ($65,522) in overdue lease payments and interest, and seeking a court award. UTair would not comment and said only that the lawsuit did not affect its operations.

UTair, controlled by the pension fund of oil firm Surgutneftegaz, said in July it was cutting costs and could lay off at least 30 percent of top managers and executives in what it said were increasingly negative economic conditions.

Last month UTair failed to meet an obligation to repurchase 2.68 billion roubles ($50 million) of bonds and hired Raiffeisenbank to advise on restructuring its credit portfolio.

$1 = 53.4175 roubles Reporting by Gleb Stolyarov; Writing by Maria Kiselyova; Editing by Elizabeth Piper and David Holmes

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