Over 27,000 Russian Tourists Are Stranded as E.U. Sanctions Take Effect
 

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Oligarchs are having to ditch their private jets too

Over 27,000 Russian tourists have been left stranded abroad after the collapse of Russian tour operator Labirint. The firm cited a ?negative political and economic situation? as a reason for its failure, Sky News reports.

Labirint is the fourth Russian tour company to tank in three weeks. ?We worry that this is only the beginning and that there will be a domino effect,? a spokeswoman for the country?s Federal Agency for Tourism told radio station and news site Echo of Moscow.

The marooned tourists, in countries such as Egypt and Bulgaria, are a visible sign that the E.U.?s sanctions on Russia, imposed over Moscow?s role in the ongoing Ukraine conflict, are having some effect. Tougher punishments were imposed last week, following the downing of a Malaysia Airlines jetliner in eastern Ukraine on July 17, purportedly by a missile fired by pro-Russian separatists.

Besides affecting tour operators, sanctions have also led to a grounding of Russian budget airline Dobrolet, a subsidiary of state-controlled Aeroflot. The carrier ended up on the sanctions list because it provides direct flights from Moscow to Crimea, the Ukrainian region annexed by Russia earlier this year.

The targeting of Russian banks, meanwhile, has caused Russia?s second oil producer Lukoil to scale back investment plans because it cannot access funds, while Reuters reports that leading Russian banks have been forced to reassure clients that they are able to meet their commitments despite being on the E.U. list.

Prominent Russians are also being inconvenienced. Gennady Timchenko, a billionaire businessman close to President Vladimir Putin, has had his private jet grounded after Gulfstream stopped servicing the aircraft and its pilots were prevented from using its navigation equipment. However, he told Russia?s Itar-Tass news agency that he?d found an alternative to his Visa and MasterCard credit cards.

?As soon as the sanctions came in I got myself [a Chinese Union] card ? and it works brilliantly!?

The sanctions could also hurt European businesses, however. Adidas has scrapped its revenue and profit target for next year because of its exposure to the Russian market, U.S. aviation giant Boeing could lose its contracts with Dobrolet, and the German Committee on Eastern European Economic Relations has said that more than 25,000 German jobs are in danger. There is an expectation among European investors that future growth may be hampered, with the euro zone?s Sentix investment index in August dropping to its lowest level in a year.

?As this slump derives from an event which is subject to politics and power play, the central banks, particularly the European Central Bank, will have difficulty in trying to counter this,? Reuters reported Sentix as saying.

Moscow has begun to hit back at sanctions by imposing bans of its own, mostly on food products. It has already banned Polish apples (it says for health reasons, but Polish farmers think the move is retaliatory) and Australian beef. Now, Reuters reports, Moscow is mulling a ban on U.S. poultry ? it currently buys around 8% of U.S. broiler-meat exports each year.

I guess if they hadn't voted for that cunt things would be different for them.. poor people

The "tour operator industry" is collapsing not because of "sanctions". It's collapsing because it's a dinosaur in the Internet era. People here just stopping use these obsolete services. Nobody needs to overpay for the tickets and hotel if it's easy to book them directly w/o any mediators?

Why they are poor? They are idiots if they still use all these "tour operators". But they are definitely not poor :) BTW, I don't understand how it could be related to some "sanctions". There are no sanctions against Russian tourists, because any country what will dare to do so will shoot in its leg. For example, over 1 million (!) of Russian tourists visit Spain within a year and they spend more than tourists from other countries (125 euros per day average).

http://www.globalpost.com/dispatch/n...tourism-sector
http://business.globalblue.com/news-...urope-booming/

Not true. If you need schengen visa to vist Europe its easier and faster to use tour operator to get the visa.

I don't mean 'poor' in the economic sense hehe

Sanctions ground oligarch's Gulfstream jet

http://i2.cdn.turner.com/money/dam/a...enko-620xa.jpg

Russian oligarch Gennady Timchenko paid big money for his Gulfstream luxury private jet. It's now parked indefinitely in Moscow because of U.S. sanctions.

Timchenko says Gulfstream has broken off contact with him and won't service the aircraft.

"The company won't provide spare parts, and the pilots have no right to use the navigation system and built-in maps," the energy and construction billionaire told Russian news agency Itar-Tass.

Gulfstream, owned by General Dynamics (GD), wouldn't comment on Timchenko but said it continued to support operators worldwide.

"We are fully compliant with all government regulations and will continue to monitor the situation," a spokesman said.

It's not just Russia's rich who are having to change their travel plans because of the economic squeeze the West has imposed over the crisis in Ukraine.

European sanctions have grounded Russia's fledgling low-cost airline Dobrolet just two months after it launched. And a Russian tour operator, Labyrinth, collapsed over the weekend, blaming the financial strain of the crisis.

Dobrolet had been flying four times a day since June from Moscow to Simferopol, the capital of Crimea, which was annexed by Russia in March.

Flights were suspended at midnight Sunday after European companies stopped providing leasing, repair and maintenance services and insurance to the airline, owned by Russian flag carrier Aeroflot.

The European Union added Dobrolet to its list of sanctions targets last week for helping to integrate Crimea into Russia, and thereby undermining Ukraine.

Labyrinth suspended its tours Saturday, stranding thousands of Russians abroad. It blamed the devaluation of the ruble and political and economic strains for a sharp fall in bookings.

Related: Cold War-style tension hits Western companies

Timchenko, one of Russia's richest men, is reported to own a Gulfstream G650, which costs about $65 million and can carry eight passengers non-stop for nearly 13,000 kilometers, or about 8,000 miles.

http://im.ft-static.com/content/imag...ff223eadb2.img


Aeroflot subsidiary grounded by European sanctions

European sanctions have forced Aeroflot to ground its new low-cost subsidiary Dobrolet, Russia’s national carrier said on Sunday in the most direct fallout yet of the EU’s punitive measures against Russia over the Ukraine crisis.

Dobrolet will temporarily suspend all flights from Monday after European counterparties annulled aircraft insurance agreements, stopped providing aeronautical information and have refused to fulfil leasing, repair and maintenance agreements, Aeroflot said.

The move comes less than a week after Brussels added Dobrolet to its list that EU persons and entities are prohibited from doing business with.

The EU said on July 30 that as a subsidiary of a Russian state-owned airline, Dobrolet had exclusively operated flights between Moscow and Simferopol since Russia’s annexation of Crimea. “It therefore facilitates the integration of the illegally annexed Autonomous Republic of Crimea into the Russian Federation and undermines Ukrainian sovereignty and territorial integrity,” the EU said.

The Russian government, business leaders and economists have during the past two weeks focused on the introduction of broader sanctions against Russia by both the US and the EU.

According to Gulfstream's website, the jet offers "wide seats, more aisle room and a large stateroom option for resting between world capitals."

Timchenko sold his 44% stake in Swiss-based energy trading company Gunvor in March, just 24 hours before he was hit by U.S. sanctions.

Not true. I don't need a tour operator to get a visa. I don't even need to visit any embassies for that.

Ban on State Employees' Travel Abroad Sinks Russian Tour Operators

The fourth Russian tour operator in just over one month went bust this weekend, said to have been toppled by, among other causes, a drastic slump in demand after the government recommended that security and law enforcement officers do not travel abroad.

This stricture, together with geopolitical tensions over Ukraine, an economic slump and a fast-weakening ruble, has resulted in a 20 to 50 percent decline in the flow of Russian tourists abroad compared to last year, depending on the destination, said Irina Tyurina, a spokeswoman for Russia's Tourism Industry Union, citing industry estimates.

On Monday, the tourism industry's troubles had drawn the attention of Prime Minister Dmitry Medvedev, who ordered his deputy Dmitry Kozak to take the situation under personal control.

"This is some kind of a breakdown, I do not remember anything like this happening before," Medvedev said, commenting on the state of affairs in the industry, the RBC news agency reported.

In July, Neva, one of Russia's oldest tour agencies, declared it was unable to meet its obligations, resulting in the abrupt cancellation of more than 6,000 active tours abroad. Two smaller companies halted operations at the end of July. And on Saturday, the biggest yet, tour operator Labyrinth, said it was suspending operations, leaving an estimated 25,000 customers stranded overseas.

Labyrinth said in a statement that the reasons for its shutdown included the falling value of the ruble against foreign currencies, and an overall negative political and economic situation. The ruble has fallen by 9 percent against the dollar since the start of the year, and by 7 percent against the euro, while the economy fights to avoid slipping into recession.

Labyrinth also blamed the recommended ban on travel abroad by employees of the state's law and order apparatus, such as prosecutors, police, tax enforcers and military personnel ? called in the vernacular siloviki, or strongmen.

In April, amid the mounting standoff between Russia and the West over Ukraine, Russian media reported that the government had strongly recommended these state employees to reconsider traveling abroad due to the political uncertainty.

"As a result, they began to back out of their tours," Tyurina said. "Tourist companies realized how many customers from state agencies they had, and it became a serious issue."

Prior to Neva's bankruptcy, the company's president Maxim Pirogov told news agencies the tour operator's revenues had fallen sharply because of the ban.

"Over the first half of the year our revenues slumped 25 percent, among other reasons due to the regulation put on state employees traveling abroad," Pirogov told news agency RIA Novosti.

There are no exact figures, but the combined force of Interior Ministry staff and other enforcement agencies is estimated at 4 million people. This is 3 percent of the country's population, and nearly 5 percent of its working age population. According to the State Statistics Service, on average about 10 percent of Russian citizens travel abroad on a regular basis.

However, Tyurina said the ban was only significant for Neva, which was initially set up by a former silovik and drew many of its customers from the state rolls.

"Overall, an array of factors have contributed to the decline in the flow of tourists from Russia abroad," she said. "Besides the weakening ruble and the sluggish economy it was the global political situation. Many Russians decided against going abroad and chose not to send their children to summer camps there for fear that they would be persecuted because of nationality," Tyurina said. "The state employees ban was just the straw that broke the camel's back," she added.

Vadim Prasov, vice president of the Federation of Restaurateurs and Hoteliers, agreed that a number of factors were straining the Russian tourism industry.

"First, there is mismanagement on part of one company and fraudulent schemes on part of the other. Second comes the overall decline of demand for the trips abroad," he said.

On Monday, the Investigative Committee said in a statement it would look into the business of Neva and Labyrinth to check whether there was evidence of attempted fraud leading to cancellations of tours that people had paid for. The committee said it would check other tour operators who filed for bankruptcy as well.

Russians commonly turn to tour operators because they offer cheaper holidays. Tourist companies book hotel rooms in bulk and whole charter flights well in advance.

"But now there is a wide array of online services that offer similar prices ? so tourists are more inclined to turn away from tour operators to buy airline tickets and book hotels themselves," Prasov said. "They are also becoming tired of routine guided tours," he added.

BTW, I'm a typical Russian because I also choose Catalunya and I'm in love with Barcelona :)

And how is it related to the thread title? You said it's because of sanction. So what exactly sanctions are you talking about? Could you explain please?

A quote:

The most popular countries among Russian independent tourists in 2012 were Spain, Italy and Germany, according to Skyscanner, followed by Thailand, France, Ukraine, Turkey, USA, Czech Republic, and China. However, few Russians dare to travel without tour operators: according to polls, only 5% of Internet users in Russia buy tickets or accommodation online. The countries with the largest growth in searches were Lithuania (+145%), Malta (+126%), and Denmark (+119%). (Source: Atorus.ru)

as CyberSEO stated in other topic: he is happy because of sanctions because he earns in dollars and exchange rate is better for him

that's a classic ruski bitch, he doesn't care about his nation, but his ass. most of ruski are like that

How they spend 125 euro/day when in russia the minimum monthly wage is 158 USD

http://en.ria.ru/russia/20131122/184...erty-Line.html

And?... It sounds like you wanted to say something but was unable to. Would you like to try again?

The Russian tourists spend more than the ones that come for Western Europe, these are from stats in Bulgaria, I'm pretty sure it's the same in other countries.

How? Simple, the Russians with money are the ones that travel abroad. I don't expect some guy that makes $200 per month to go to Spain for two weeks every summer.

off topic, just that russian people are the last ones who are tipping nice tips and are not affraid to paid for stupid things like heli fhlights and so ... thanks to russian tourists, tons of great touristic resorts are still on top ... just wanted to say, to those who thinks poor russians are poor tourists :)

These operators took their clients money and ran off, using bankruptcy as an excuse. It has nothing to do with the sanctions.

Russia May Ban EU Airlines' Routes Over Siberia in Response to Sanctions

http://www.themoscowtimes.com/art_n_...ns/504571.html

Possible restrictions on flights over Russian territory are being discussed by Russia's Foreign Ministry and Transport Ministry, Vedomosti quoted one source as saying.

Lufthansa, British Airways and Air France are aware of the possible move and are concerned over possible losses which could amount to 1 billion euros ($1.3 billion) for three months of restrictions, the daily quoted an unnamed source as saying.

The restrictions would lead to longer flights, higher fuel use and other additional costs for European airlines, putting them at a competitive disadvantage versus Asian rivals

Russians go on vacation?

When I turn on Fox news, they say the sanctions are weak and ineffectual...and they're always right. So what's going on?

I love to hear that.

It's more like these "tour operators" do fake bancrupcies to get rid of old debts, let insurance companies pay it, it's good time to do this now. They are likely to restart their business as new entities with clean files.

The sanctions don't do shit atm as far as I can see, they are too weak. They probably could slowly suffocate nation economy and business, but the process is going to be very slow and it will give RU enough time to diversify its' economy turning to China and other asian countries. What EU could do is to stop buying gas and petrol altogether, this will kill the economy of RU instantly. But EU won't do this as they are too big wussies, they afraid of backfire from their own electorate. When they gather themselves up and do this, in a few years, it might be too late as everything will be diversified enough. There are no leaders now like Maggie and Ronald, hehe.


And yes, it's extremely easy to get Schengen visa without an tour operator. Even for officially unemployed as I am. Usually it takes 3-4 days, and could be done via mail. I can't imagine it could be made easier but issuing the visa right in the airport.


About 125 euro/day and low minimum wage - signifficant part of RU economy is black, where cash rules. Most of the wages are not declared to authorities and paid in cash, even big businesses do this. I'd say for every taxed 'white' rouble there are three black ones. And difference between poor and rich is very big here, those who are rich, well, not rich but just more or less well off, can easily spend more than average european, as they pays much less taxes on their income.

Talk to any Russian, they only care about Russia when others talk bad about her, otherwise she is a cunt. hahahha Not unlike most countries really.

CyberSEO's logic is simple: Being a dick in every day life it helps to feel a part of something big and dangerous.

I don't think it's possible to earn $200 a month in Russia. At least I don't know such people who would work for that money. The real salaries here start from about $1000 a month (my son who is a student earns that money for a part-time job with a free schedule).

Also we have a definition of white and black salary. This means that you officially earn $1000 a month and you/your employer pay taxes of it (white salary), plus to that you get say $4000 in an envelope right to your pocket (black salary). This is why Russians always spent "more" than they "earn". The official salary stats in Russia do not include the most important part of the salary - the black one :2 cents:

P.S. Yes, it's a corruption and a tax evasion, but this is how almost all the companies work here.

Exactly. There are no sanctions against Russia tourists (personally I have no problems traveling anywhere), so the thread title is simple misleading.

Exactly :2 cents:

Иди проблюйся и проспись уже, алкаш.

have you been traveling lately ? There are lots of Russians that disagree with you.

You should had met a family (Russian) I saw a couple of days ago trying to checking in on an hotel...

What do you mean? Is it became a problem to get a visa, book a hotel or buy a ticket? Who exactly will disagree with me and why? Explain please.

And?.. Sorry but I don't understand all these posts with suspension points.

P.S. I've booked a hotel in Barcelona for the end of August as usually (actually I'm going to buy a small house in Catalunya). So?

Your opinions are so heavily biased that it's comical already.

Four large tour companies in Russia went out of business moments after sanctions took place. Don't tell me they closed because they are "dinosaurs" in the Internet era - This one company alone had some twenty-seven thousand people abroad when they went out of business; It wasn't because of a lack of customers.

Not to mention the airline.

Man, your clueless is comical. My "opinions" are not biased because I live here and I know how it works. 27K Russian tourists out of tens of millions were scammed by thievish tour operators? OMFG :)))) How many of them were scammed a year, two or five ago ah (dare to check the stats)? You are kidding me, right?

Don't pretend to be an idiot. Pleeeeeeease! Which exactly sanctions took place and have an effect to the tour operations? Care to name at least one? No? So you can't even name at least one? :))))))))))) Man, you are a former marine, but not a clown. Please don't make us laugh at you, and please tell me that was a joke and the US marines are not that dumb as you are trying to show them here.

russian tourists getting epassported??

Thousands of stupid Russian tourists that can't book a hotel via Internet are getting epassported every single year. But I still don't understand why such a scam is now being associated with some mythical "sanctions" :2 cents:

You are completely biased. That's not even open to discussion.

You must be right - these tour companies must have all been scams. The fact that four of them shut down at the same time is purely coincidence.

I mean, nothing like the company President blaming in the travel ban of State employees:

Prior to Neva's bankruptcy, the company's president Maxim Pirogov told news agencies the tour operator's revenues had fallen sharply because of the ban." Over the first half of the year our revenues slumped 25 percent, among other reasons due to the regulation put on state employees traveling abroad," Pirogov told news agency RIA Novosti.

Straight out of the Moscow Times too.

Seems Russia is having some issues with airlines too. But that must be coincidence, right?

Well, there is an outright ban on travel by all government officials. This is 3% of the Russian population. However, this tour agency was created by a former state employee, and 75% of their customers are state employees.

This is correct. I am a former Marine, and I am not a clown.

how about your UAH ? it is over 12 to USD today, so it is around 50 % devaluation...while RUB devaluated around 15 % in last months....

anyway, if you earn that much like u said before, you just dont care...even with 5 UAH to 1 usd u would have enough probably :P

they still do that, even with 13 % flat tax rate, or I am missing something here ??? :helpme

These unknown shady "companies" are doing this every year. I don't understand the people who still use them when the Internet is available everywhere. However you won't find there any famous name like Tez Tour etc. Just because they are famous ones and they are not scammers.

Yes, the police, FSB etc DO NOT allow their employees to travel to the EU and the USA. That's their problem, actually. But this is not a result of "sanctions". This is their internal problem, no?

Once again. Is this a result of some foreign "sanctions" or is it their own internal policy? if you ask me, I don't feel for these idiots.

13% is being paid for a "white" salary only, while the main portion of money is being payed as a "black" one here (pocket to a pocket). So when you hear something about the official average salary here, it's a white one which is the lowest part of the income. And that's not about the small companies. The biggest sen-state ones like Gazprom are using the same scheme.

...my point was: why they still do that when the tax is only 13 % ? for what ? to save 5 % ?

But obviously a lot of people do still use because tens of thousands are now stranded.

LOL. Why would the Police, FSB, etc, not allow their employees to travel? And when did that go into effect?

Let's face reality here.... You have a government putting travel restrictions on it's staff (3% of the population), tour agencies going out of business, airlines shutting down, private planes not allowed to travel, and nearly thirty thousand Russian citizens stranded but it's not because of sanctions, it's just "shit happens"?

Sure.

Are you asking me? For real? Why don't you ask them:

http://izvestia.ru/news/569683
http://tvrain.ru/articles/nekotorye_...anitsu-367383/
http://www.rosbalt.ru/federal/2014/05/07/1265688.html
http://slon.ru/russia/zachem_vlasti_...-1090853.xhtml
http://www.mk.ru/politics/article/20...-granitsu.html
http://www.fontanka.ru/2014/04/23/151/
http://www.gazeta.ru/social/2014/04/22/6002161.shtml
http://www.dni.ru/society/2014/4/22/269252.html

Google translate is your friend, LOL-er :)

P.S. More questions? :winkwink:

Rochard, man, you know nothing about my country but trying to play a wise man. Sorry but this won't fly.

13% is еру income tax here (personally I pay 2 times less). The employers pay much more. That's why they prefer to pay "black salaries".

I don´t think is any harder to get visa or book hotel or airline tickets..it´s just the same as before. But I read in local newspaper that russian tourists are down 40% this year.

Problems I have seen are mostly related to credit cards not working or declined only once i saw some hate related issues but those are idiotic people.

Catalunya good for you I myself prefer Andalucia or Algarve.

Because this is not just about income tax. Employers pay not just income tax from the salaries, b2b transactions are made in a way to avoid other taxes, either by cash or by using offshore companies etc etc etc. One black transaction pulls another and as business has undeclared money it has to pay it undeclared to workers. Business has to pay bribes to a lot of licensing and controlling organizations and bureaucrats, to customs and god knows to who else, and you obviously can't do this with declared money, so you need cash and offshores and you need to move money to and through. One black thing pulls another, it's all very deeply rooted in the society and life.

upd: for those who confused - income tax is paid by employer in RU, not by employee.

upd2: and I wouldn't call these tour operators absolutely useless though - it is way smarter to use tour operator when you fly to Egypt or Tunis, I'd not risk to fly there myself. But for Europe or Asia it is much better to do everything on my own, though using tour operators sometimes is still cheaper as they have access to bulk discounts for tickets and hotels.

Police and FSB officers.

Nope. There are no problems with CC's.

I wouldn't fly to these shitholes with tour operators either :)