Low-cost Russia airline to suspend services due to EU sanctions

MOSCOW Sun Aug 3, 2014 2:12pm EDT

MOSCOW (Reuters) - A low-cost airline run by Russian national carrier Aeroflot said on Sunday it will suspend all flights after its plane lease agreement was canceled when the European Union slapped sanctions on Moscow over its role in the Ukraine crisis.

The EU announced punitive measures on the airline, Dobrolyot (Good Flight), in late July when it expanded its list of sanctions on Russia to 95 people and 23 organizations subject to travel bans and asset freezes.

Dobrolyot began operations in June, carrying out its maiden flight to Simferopol, the capital of Crimea, the Black Sea peninsula that Moscow annexed from Ukraine in March. It currently serves seven other cities in Russia.

"Following cancellation of a lease agreement for Boeing 737-800 planes because of sanctions introduced by the EU against Dobrolyot, we are forced to temporarily halt flights on all routes as of Aug. 4," the company said on its website.

It said another airline would fly passengers who had already bought tickets to travel between Moscow and Simferopol as well as between Moscow and Volgograd later this month.

"Flights on other routes are temporarily canceled. Passengers will get a full refund of the ticket price," it added.

The announcement comes despite a defiant tone Moscow struck after the West ratcheted up sanctions over what it says is Russia's role in fanning the separatist rebellion in eastern Ukraine. Moscow denies the accusations.

(Writing by Gabriela Baczynska; Editing by Hugh Lawson)

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