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Aeroflot to sell Nordavia to Nordstar parent: source

Aeroflot appears to be poised to spin off its regional subsidiary Nordavia after reaching a purchase agreement with the mining and metals conglomerate Norilsk Nickel.

The two sides have not yet announced the deal but Archangelsk-based Nordavia is already planning to introduce domestic services from Norilsk to half a dozen cities in the summer season.

"We're preparing to establish presence in the area directly linked to the future owner," says a source close to the company's management.

He says Norilsk Nickel made a proposal to acquire Nordavia at the end of 2010. Previously, Aeroflot considered merging it with St Petersburg-based carrier Rossiya to form a unified airline serving north-western Russia.

"But that plan was ultimately turned down as financially impractical. In the first three quarters of last year Nordavia suffered losses totalling $9 million," says the source.

Norilsk Nickel has an in-house air enterprise Taimyr Avia, which operates under the NordStar brand, and is believed to be contemplating combining its services with those of Nordavia eventually.

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