Russia to Launch ‘Cash for Clunker Airplanes’ Program

Russia may launch a “cash-for-clunker aircraft” program to scrap outdated airplanes and helicopters, according to a draft state program on the domestic aviation industry development published by the Industry and Trade Ministry on Wednesday.

“Russia’s aircraft fleet is characterized by a large number of morally and functionally obsolete airplanes and helicopters, primarily, in the segments of regional and short-haul aviation. The successful practice in implementing the car scrapping program can be used to renew the aircraft fleet,” the document reads.

The state subsidy for buying a new plane in exchange for turning in old aircraft should be comparable with the initial payment for the lease of a similar plane equaling 10 percent of the new aircraft’s value.

The subsidy should be used solely for acquiring new planes similar in class to the aircraft slated for scrapping.

Only aircraft that are older than 15 years and are airworthy are expected to be eligible for the program while airlines engaged in the scrapping effort should be financially viable.

In 2010, Russia launched its first "cash-for-clunkers" program for passenger cars after the industry was severely hit by the international financial crisis. The car market grew 10 percent after the program's first stage was launched, encouraging the government to extend it.

Russian car giant AvtoVAZ has been the main beneficiary of the “cash-for-clunkers” program, with its Lada cars making up to 70 percent of all vehicles bought under the program.