Nordavia announced merger with Red Wings
Russian airlines Nordavia and Red Wings decided to join forces. The latter is operated by the Ilyushin Finance leasing company and the former is owned by Sergey Kuznetcov. The shares in the new holding company have not been announced yet.
“The new holding company will be a sustainable enterprise, able to solve strategic business tasks by means of innovative managing approaches and use of the best aviation practices,” CEO of Red Wings Evgeniy Klucharev said in an official statement.
The merger is supposed to increase passenger turnover, which is expected to exceed 3.5 million passengers in 2018.
By number of passenger flown, Red Wings is the 13th Russian airline, while Nordavia is the 17th. As both airlines are increasing their traffic, the merged carrier could rise to the 10th place. This would probably lead to the new airline overtaking a part of the passenger market of the recently suspended VIM-Avia.
The main focus of the combined airline will probably stay on domestic flights, as it will use medium-haul MC-21 planes. Red Wings signed an agreement at MAKS Air Show in Moscow this summer for the lease of 16 MC-21-300s.
The new airline would also probably inherit the $201 million debt of Nordavia. Previously, this debt to World Best Trade had become the reason why the Russian Federal Air Transort Agency had limited Nordavia’s AOC. The restrictions were lifted in August 2017.
While the merger is ongoing, airlines will operate under their own brands, and afterward, the holding company will get a new name. The name Nordavia will be replaced by SmartAvia and brand colors (blue, orange and grey) will slightly change. The implementation of the new brand identity is scheduled for the end of October.
In 2016 Red Wings’s revenue was the same as in 2015 – $105 million, while net loss decreased from $6800 to $3300, according to SPARK-Interfax database. Nordavia’s revenue in 2016 was $111 million ($83 million in 2015) with net profit of $29 million (in 2015 net loss was $40 million).
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