Antitrust: Aeroflot could help market create new low-cost carriers

MOSCOW, Aug 27 (PRIME) -- The segment of low-cost airlines needs competition, and Russian national flagship carrier Aeroflot could help the market create new low-cost carriers as it already has the experience of creating airline Pobeda, the Federal Antimonopoly Service’s Director Igor Artemyev told PRIME on Tuesday.

Earlier in August, Artemyev sent a letter to Transport Minister Yevgeny Ditrikh and Deputy Prime Minister Maxim Akimov with a proposal to privatize Pobeda. The service’s Deputy Director Alexander Redko told PRIME then that Pobeda should develop domestic flights or leave Aeroflot Group.

“Of course, the best option here would be that other airlines are strong enough to create their own low-cost subsidiaries in Russia so that there is competition, it is the best way. If Aeroflot could consider privatization of Pobeda, allowing it to enter the market into private hands, to get money and perhaps create another low-cost company because they know how to do it. Later they may even sell that new company and create a third. Private investors will buy them all,” rtemyev said.

Private investors are not experienced enough in creation of low-cost airlines as they have to obtain a huge amount of technical certificates and approvals. “Aeroflot did that, and they’ve learned how to do it. They could help the market and create competitors for themselves of some sort to remain the market leader,” he said.

He said that privatization was only a proposal and that the government respected Aeroflot’s rights as shareholders of the company.

He also said that the service was in negotiations with its Kazakh and Belarusian partners on creation of low-cost airlines in the countries. It is very important to improve competition in the sector, and it would be good if Russia had five or six low-cost airlines and if all other members of the Customs Union had at least one, he said.

End