Russian state-owned flagship carrier Aeroflot is considering leaving the SkyTeam alliance to improve its competitiveness.
Kommersant reported Russia’s largest airline wants to jettison
the SkyTeam alliance because of unfavorable business agreements
with other members, in particular Delta, citing sources close to
Aeroflot’s board of directors.
Aeroflot, the first former Soviet air carrier to join a global
alliance in 2006, is now reevaluating the developments of its
routes in the United States, and its potential competitiveness in
the market. Aeroflot cannot undercut prices of any other SkyTeam
Alliance member on US routes.
In partnership with the SkyTeam, Aeroflot currently co-operates
flights to New York City, Washington DC, Miami, Las Vegas,
Boston, and 20 other US destinations.
Aeroflot’s most popular flight path to the US is its Moscow-New
York City route, which flies three times a day.
Aeroflot stands to lose $20 million if it drops the SkyTeam
Alliance, which is currently comprised of 18 other member
airlines, Delta, Air France, Czech Airways, Korean Air, and China
Airways.
The Russian carrier could sign up for the Star Alliance, the
world’s largest, joining the ranks of 27 other airlines,
including Lufthansa and US Airways, which, after its
merger with American Airlines, is the world’s
largest airline.
Aeroflot has declined comment on the report.
Air France / Dutch KLM Airways, the leading member of the SkyTeam
Alliance, had a $9.34 share value at 9:37 a.m. GMT Friday.
Aeroflot was been awarded the international prize as the best air carrier in Eastern Europe at the 50th annual Le Bourget air show in Paris.
Privatization continues
Aeroflot posted a $1.71 stock value at 9:37 a.m. GST, slightly
down from its 56.17 ruble opening Friday.
The company is semi-privatized, but the Kremlin plans to further
privatize the company to raise funds for the budget.
“Our task is to sell these assets at the best price, raising
as much money as possible for the budget,” Prime Minister
Dmitry Medvedev said at a state-asset sale on Thursday, Bloomberg
reported.
Execs at Aeroflot propose delaying the asset sale for more
favorable market conditions, as its stock has dropped over 50
percent since its 2008 high of $3.73 share price.
“We think Aeroflot should be privatized later depending on the
market,” Aeroflot CEO Vitaly Savelyev said in an interview at
the St. Petersburg International Economic Forum two weeks ago.
The Russian government will reduce its stake in Aeroflot to just
above 25 percent through 2016.
As of 2009, Aeroflot has been operating out of its own exclusive terminal at Sheremetyevo airport, where it
has a fleet size of 138. Aeroflot also operates some of its
flights from Vkunovo, an airport in south-western Moscow.
Russian Deputy Prime Minister Igor Shuvalov said Thursday
Moscow’s three largest airports will also transfer to private
ownership by 2016.
"We're moving towards the setting up of the Moscow Air
Junction and we bear in mind that all the three largest airports
will be privatized," he said addressing a regular session of
the cabinet, hinting the consolidation of Sheremetyevo Airport
was nearing.
Aleksandr Lebedev, KGB-man-turned-oligarch-turned Kremlin critic,
recently sold his remaining 4.5 percent shares in
Aeroflot. Today he stands trial on hooliganism charges which
resulted from an on-air brawl with Sergey
Polonsky.