Airline magnate offers to sell Blue Wings stake to Aeroflot for 1 euro

Aleksander Lebedev, is offering his majority stake in Germany’s Blue Wings airline to Aeroflot for just 1 euro, saying it would help the Russian carrier, in which he has a 30% stake, gain a European foothold.

Speaking with RT, Lebedev said that if Aeroflot takes up his offer on Blue Wings – which has recently had its licence reinstated – the Russian air flagship would be in a better competitive position in Europe, while the airline sector in Russia consolidates.

AL: "Consolidation is necessary in the sector. I would probably like to see 10 companies operating in this sector instead of a hundred and more. Same as in the banking sector – we don't need a thousand banks. We probably need a couple of hundred, which are much more strong, with bigger capital, and much more transparent, and much more quality, and low cost to the consumer."

RT: You have offered your share in Blue Wings to Aeroflot and that decision is pending. How likely would you say Aeroflot is to acquire Blue Wings?

AL: "Aeroflot has always been ready to aspiring to get a platform in Europe. Previously they've been ready to pay money for Alitalia, Czech Airlines, Serbian Airlines. I want to stress they've been ready to pay for it. Now, I am offering them a minority stake for 1 euro without any financial commitment. The point is, if they get in, that will strengthen my position vis a vis the German authorities. Once Aeroflot is in, we can compete, we can develop new routes, we can actually make Aeroflot a bigger and stronger company."

RT: How do you see the future of the air transportation business in Russia?

AL: "Well, we're all hit by the crisis but we are such a big country that if you really can provide a quality service with a reasonably low airfare, that could compete with railway or normal cars in the country. I'm saying less government regulation, more open sky regime, and more quality private sector in a transparent way." 

Watch the second part of the interview

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RT: You write in your blog today that the German government has returned Blue Wings' license for flight. How has the company's debt been affected by its inability to service passengers since it lost its license last month?


AL: Well, we have been grounded for 36 days. We've lost more than 100,000 passengers and had to relocate some of our passengers who had already bought tickets to other companies and on top of that, Lufthansa has started flying Dusseldorf-St. Petersburg and Moscow, saying these are not really good routes. And I think the LB – that's the German regulator – could have achieved what they wanted without grounding us. And that's the simple point. They had some questions, we had been in discussions with them, but this is not a point for me as a main investor to be paying for 500 Germans who were supposed to be flying but, instead of that, they've been grounded and I have actually delayed salaries in Novaya Gazeta for more than a month since we're all in the process in crisis. It's not about coming up with some extra money out of pocket, instead of getting revenue from the number five airline in Germany. And I don't think it's ever happened in Europe – I think it's unprecedented.

RT: You've offered your share in Blue Wings to Aeroflot and that decision is currently pending. How likely would you say it is for Aeroflot to acquire Blue Wings?

AL: Aeroflot has always aspired to get a platform in Europe. Previously, they've been ready to pay money for Alitalia, Czech Airlines, and Serbian Airlines. I want to stress that they've been ready to pay for it. Now, I am offering them a minority stake for 1 euro without any financial commitment. The point is, if they get in, that will strengthen my position vis-à-vis the German authorities. Once Aeroflot is in, we can compete, we can develop new routes, we can actually make Aeroflot a larger and stronger company.

RT: Do you think that carriers stand a chance against Lufthansa in terms of competition in the German market?

AL: We owe that actually to both nations – to Russians and Germans. The more competition we have, the lower the air fares and the more quality we can get. Since Aeroflot has lost most of the competition in Germany and Europe and the major Russian cities, I don't see how we can compensate them for that by competing more now. Lufthansa is a very strong company. It gets a lot of support from the German government, but that doesn't mean we couldn't compete properly with it.

RT: How do you see the future of the air transportation business in Russia?

AL: We're all hit by the crisis, but we are such a big country that you can succeed if you really can provide a quality service with a low airfare that could compete with railway or normal cars in the country. We are destined to fly much more than we fly now. It's just we need to copy low-cost, with less government regulation, a more open sky regime, and more of a quality private sector in a transparent way.