Aeroflot To Absorb Rival Airline Transaero | Aviation International News

Aeroflot To Absorb Rival Airline Transaero

Flag carrier to control more than half the Russian market

An Aeroflot Boeing 767-300 Takes off from Zurich (Photo: Flickr: Creative Commons (BY-SA) by Aero Icarus)

By Gregory Polek • Senior Editor

September 1, 2015

Russian flag carrier Aeroflot will take a majority stake in the country’s second-largest airline, Transaero, under the terms of an agreement brokered by the Kremlin. The deal comes as Transaero founders under the weight of more than 100 billion rubles ($1.5 billion) of debt, much of it accrued in U.S. dollars. International sanctions imposed on Russia for its annexation of Crimea from Ukraine and its alleged military support for Ukrainian separatists have helped cut the value of the ruble in half over the past year, resulting in massive increases in the foreign debt loads of Russian companies. Meanwhile, international passenger traffic out of Russia has fallen dramatically due to the subsequent loss of its citizens’ spending power.

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