Launch of Aeroflot's new low-cost subsidiary is dependent on changes to Russia's consumer laws.
At recent meeting of Aeroflot's board of directors, it was decided that under "favourable conditions" the new airline would be launched in 2014 offering a stripped-down service and air fares some "20-40%" cheaper than those of full-service carriers - and competitive with rail fares.
The carrier, which is yet to be given a name, would begin by launching routes to the most populous parts of western Russia - cities such as Kazan and Novgorod are mentioned as potential destinations. The airline would then expand into the CIS and Europe.
But the launch will be subject to Russia successfully amending consumer laws to allow carriers to sell nonrefundable tickets and limit services such as in-flight meals and luggage allowances on short-haul flights, says Aeroflot.
The carrier has not yet decided whether its no-frills airline will be based at its Sheremetyevo airport headquarters or another Moscow airport at this stage.
The low-cost operator will fly brand-new aircraft.