Russian state-owned Aeroflot has pulled the plug on rescuing Transaero Airlines, after too few of the debt-heavy Russian competitor’s shareholders failed agree to a plan by a deadline of Sept. 28. Aeroflot was going to acquire a 75 percent stake in Transaero before the deadline.
According to a report in Reuters, last month Aeroflot said it would acquire the 75 percent stake in Transaero, which had net debt of US$1.63 billion at the end of 2014. Reports in the Russian media said that Russian Prime Minister Dmitry Medvedev has given permission to begin bankruptcy proceedings for Transaero Airlines. According to Russian media, Aeroflot took a hard line refusing the Transaero consolidation.
Russian banks are opposed to the bankruptcy, but Aeroflot says they should have better assessed the risk when they gave loans to Transaero. Transaero is in such financial trouble that it can’t refuel its planes, which is now done by Aeroflot. Aeroflot said it would stop refueling Transaero planes on September 30, but first deputy Prime Minister Igor Shuvalov asked Aeroflot to move the deadline to midnight October 2, Russian business media RBC reported.
According to our sister publication Cargo Facts, Transaero reported 347 million FTKs flown in 2014 – mostly in the bellies of its 93 passenger aircraft (including forty-four widebodies), but also on the main decks of two Tu-204Cs. Shuvalov said the government would help the 10,000 Transaero employees who may lose their jobs as well as passengers that had pre-purchased tickets.
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