Aeroflot might have to sell Rossiya Airlines
Members of the Russian Cabinet have been talking about the sale of Aeroflot’s subsidiary Rossiya Airlines. Deputy PM Arkadiy Dvorkovich instructed the Ministry of Transport to develop a sales plan for Rossiya Airlines. Government experts report that this step was influenced by an undesirable reduction in competition in the air travel business. One of the main claims to the unprofitable company is an unjustified competition with Aeroflot and Pobeda airlines.
At the moment Aeroflot controls 75 percent minus one share of Rossiya, while the blocking stake is owned by the Saint Petersburg City Administration. Many experts agree that the largest subsidiary of Aeroflot should be bought by the executive body of Russia’s second largest city. Such an acquisition would help improve its air travel segment.
In the first half year of 2016 Aeroflot reported a net profit totaling RUB 2,467 million (USD 38 million), while the company’s losses in 2015 amounted to RUB 3,500 million (USD 54 million).
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