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Putin orders fuel dispatched to AiRUnion amid flight delays

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Russia's prime minister has ordered fuel to be provided to air alliance AiRUnion from state reserves to end mass flight delays caused by a payment crisis plaguing the carrier, a government spokesman said on Tuesday.
MOSCOW, August 26 (RIA Novosti) - Russia's prime minister has ordered fuel to be provided to air alliance AiRUnion from state reserves to end mass flight delays caused by a payment crisis plaguing the carrier, a government spokesman said on Tuesday.

Delays of flights by the alliance, which comprises five regional air carriers, were reported in several cities last week. And about 10 AiRUnion flights are reported to be on hold in Moscow's Domodedovo airport at the moment.

"Prime Minister Vladimir Putin has signed an instruction for the state reserve to provide aircraft fuel for AiRUnion companies to resolve the passenger flight crisis," Dmitry Peskov said.

Peskov said the fuel will be provided under guarantees from the state Russian Technology Corporation. The state-owned stake in AiRUnion is currently being transferred to the corporation, which will have to compensate for the supplies.

The air alliance's aggregate credit debt has hit over $1 billion.

Then-president Putin approved the merger of five air companies into AiRUnion in May. The move was designed to consolidate and modernize the domestic industry. Earlier reports said the state would hold no less than 45% in AiRUnion.

The alliance was seen as a rival to market leaders Aeroflot and S7. AiRUnion's total passenger turnover in 2007 was 3.6 million.

A Transportation Ministry official said on Tuesday the government was making efforts to help the air alliance overcome the crisis. He said the ministry had secured consent from several large carriers to take AiRUnion passengers still waiting for their flights.

Media reports earlier said kerosene prices had hiked 70% in Russia since the start of 2008. The authorities have ordered a series of anti-trust probes against suppliers and producers.

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