Aeroflot Investor in a Hard Spot with Kremlin Plan for Second State Airline

Aeroflot, a Russian carrier, is being put in a hard spot as the Kremlin, the majority shareholder in the airline, seems to be intent on restoring the rest of the airline sector in the country by creating a second national airline. This threat is uncomfortable for Alexander Lebedev, the biggest private shareholder in the carrier. He said that the industry of aviation is one of the most unprofitable and riskiest in the world, and he doesn’t know why anyone does this.

Private shareholders and owners within the airline industry in Russia are being put in a hard spot. A lot of private businesses have filed bankruptcy due to the combination of the earlier high price of fuel this year, along with credit becoming less available during the last few months. Many investors have pledged their shares as collateral on loans.

The industry’s future is hanging in the balance, while the state is the only one with the power and cash to determine who will survive and who will collapse. Instead of bailing out the carriers that are run privately, they have come up with a plan to fold the private assets that are failing into a second national carrier called Rosavia. The new airline isn’t in existence yet as a legal entity, neither does it have a press spokesman or website.

While this carrier is being formed, its assets are going to be under the management of Russian Technologies, which is a holding company of the state that focuses on defense assets and is lead by Sergei Chemezov, who is a close ally of Putin.

Find out more about Aeroflot at: www.aeroflot.com