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Russian tour operators go bankrupt on sanctions fallout

Two Russian travel operators declared bankruptcy as sanctions over Ukraine weaken the ruble and curb demand for foreign travel, particularly among state employees.

Moscow-based Labirint suspended operations Aug. 2, while Intaer followed today, cutting off services to about 30,000 customers who bought trips to destinations including Greece, Turkey and Egypt, according to the Federal Tourism Agency.

The agency has organized the return of 5,500 stranded tourists and is working to bring back an additional 16,000, acting head Oleg Safonov told state television channel Rossiya 24 today. As well as the demise of the tour operators, 36 charter flights from Russia have been canceled, he said.

The U.S. and Europe have imposed travel bans and asset freezes on Russian officials, businessmen and companies, and moved last week to squeeze the nation’s finance, energy and defense industries. State-run flag carrier OAO Aeroflot has suspended flights by its low-cost unit because European companies annulled leasing, servicing and insurance contracts.

Russia’s Interior and Defense Ministries have recommended that employees cancel foreign trips, while the ruble has weakened about 6 percent against euro this year, the third-worst performer among 24 emerging-market currencies Bloomberg tracks.

At least three other tour operators have gone bankrupt during the last three weeks. They include Expo-Tour, Roza Vetrov Mir and St. Petersburg-based Neva, founded by Vladimir Strzhalkovsky, an ally of Russian President Vladimir Putin.

Source: http://www.bloomberg.com/