PRESS: Russia’s Aeroflot may sell Rossiya Airlines

MOSCOW, Sep 22 (PRIME) -- Russian national flag carrier Aeroflot may sell its largest affiliate Rossiya Airlines, business daily Vedomosti reported Thursday citing three federal officials.

Aeroflot owns 75% minus one share in the affiliate, while the rest is owned by the government of St. Petersburg.

Deputy Prime Minister Arkady Dvorkovich ordered the Transport Ministry to prepare suggestions for the possibility of Aeroflot selling Rossiya Airlines. The Economic Development Ministry has submitted its position to the Transport Ministry, and the latter is to present its report to the government on October 10, Vedomosti reported.

A source told the daily that the ruling of Dvorkovich was based on a report of the government’s expert council that the level of competition has fallen at the Russian market of air carriers. Another source said that no other airline in the world operates in three segments of the market, while Aeroflot itself is a premium air carrier and it has affiliates in the economy-class – Rossiya – and in the low-cost class – Pobeda, the daily reported.

Deputy Economic Development Minister Yevgeny Yelin told the daily the ministry supports privatization and development of competition. “We should improve accessibility of air travel from St. Petersburg, not only from Moscow,” he said.

One of the federal officials told the daily that the Transport Ministry also favors a sale of Rossiya Airlines, while a representative of the ministry said it has formed a working group to study the the airline’s development strategy.

End