After Dinner Comes the Reckoning

When a company takes on social duties, it must be compensated for the loss of revenues. Unless, of course, this is a Russian airline which itself came into existence as a result of murky privatisation of the 1990s.

This is, basically, the idea behind the decision of the Constitutional Court of Russia in a dispute where airlines asked money for discounted tickets they had to sell to children.

According to Russia’s Air Code children aged 2 to 12 years old can travel at half price. At the same time, the government does not compensate the airlines. They must absorb the losses or, what seems more likely, pass them on other passengers.

Three airlines complained to the court asking to abolish this law as unconstitutional. Earlier, they tried to collect money from the treasury, but the commercial courts did not back them up.

The judges of the Constitutional Court recognized the problem but did not dare to oblige the government to pay. The court referred to the fact that the law have existed since the beginning of times, that is, from the days of the Soviet Union. Then, however, there was only one airline and it belonged to the state.

What the court wanted to say was that once you got your company in the privatization binge, you shouldn’t complain that there are some drawbacks attached and take the whole package.