Russia’s competition regulator is to examine the impact of an Aeroflot acquisition of Transaero, after the flag-carrier’s board approved plans to take control of the struggling private airline.

But Federal Anti-monopoly Service chief Igor Artemyev, during a briefing, acknowledged that the takeover will reinforce Aeroflot Group’s position in the market, giving it some 50% of the passenger numbers, and the regulator would have “preferred” a bankruptcy proceeding.

This would have provided an option to satisfy creditors, to an extent, while enabling several airlines, rather than one, to pick up parts of the route network, he adds. But he also indicates that bankruptcy would have been a drawn-out process lasting two or three years.

Artemyev says the authority will look at the acquisition plan and could demand that Aeroflot sells part of its network – both international and domestic – on sectors where the company acquires a monopoly position as a result of its merger with Transaero, although such measures might not be implemented immediately.

The regulator has yet to examine the situation fully. “We will analyse all of it,” says Artemyev.

Competition concerns prompted the Federal Anti-monopoly Service to intervene in 2008 when Aeroflot was considering taking a shareholding of S7 Airlines.

Transaero has confirmed that its shareholders have put an offer to Aeroflot to sell a majority stake in the private carrier.

It says that its primary owner submitted the offer, for a stake of 75% plus one share, adding that the proposal has been made “in the interests of passengers, employees, partners and creditors”.

Transaero has yet to give further details on the consolidation process. But it has criticised local media comments about the struggling company, claiming that these “destabilise and complicate” its situation.

Source: Cirium Dashboard