Moscow looking to sell off Aeroflot’s Rossiya Airline subsidiary

Just days after shelving plans to privatise Aeroflot, Moscow is considering selling off the national carrier’s loss-making subsidiary,  St Petersburg’s  Rossiya Airlines. According to Vedomosti, Deputy Prime Minister Arkady Dvorkovich has instructed the Transport Ministry to submit proposals for the sale of Russia’s third largest airline. “We are for privatisation and development of competition,” said Deputy Minister of Economic Development Evgeny Elin, indicating that the move already has backing from the highest echelons within the Kremlin.  “It is necessary to develop the availability of air transportation from St. Petersburg, not only from Moscow.”
An earlier report  commissioned by the government had recommended that Rossiya should be spun off on the grounds that it did not fit in with Aeroflot’s attempts to position itself as premium global carrier and was in fact  competing with its mother company. The report also noted that Aeroflot  – which controls a 75% stake in Rossiya – had yet to make a profit from the subsidiary.
Established in 1992 as a wholly-owned state carrier, Rossiya was merged with Pulkovo Aviation Enterprise 14 years later and in 2010 was consolidated into the Aeroflot Group along with all of Russia’s other  regional state-run carriers. Earlier this year, Aeroflot started operating the routes previously runby the  Donavia and Orenburg carriers under the Rossiya flag. Despite the move, the majority of Rossiya’s domestic and international flights begin and end  at  St Petersburg, and its fleet of 58 Airbus and Boeing aircraft fly to 54 domestic and 27 international destinations, the latter predominantly in Europe.

Source: Vedomosti