The Russian Ministry of Transport has drafted legislation calling for mandatory liability insurance for Russian airlines operating scheduled flights. The insurance would guarantee refunds for passengers if the carriers cancel flights owing to bankruptcy or the loss of an air operator's certificate (AOC).

The bill, which if enacted would become effective in July 2012, mandates reimbursement for stranded passengers who have to find alternative transport when airlines are forced to cease operating on short notice. Under the legislation, carriers will be required to contribute to an insurance fund that will replace the federal money currently used to compensate stranded passengers.

Since the beginning of this year several Russian carriers have quickly left the market, including Region-Avia, Continent and Avianova (ATW Daily News, Oct. 4).

Russia's largest airlines don't like the idea of the mandatory insurance fund because they will have to pay more than smaller airlines they say are more likely to lose their AOCs. However, in August 2008 AiRUnion, a major alliance comprising five Russian carriers, unexpectedly stopped flights, leaving a massive number of passengers stranded at airports.