Rival planned for Aeroflot on domestic Russian routes

Tougher domestic route competition may lie ahead for Russian airline Aeroflot if five regional carriers are consolidated. The Ministry of Economic Development and Trade expects a start on the project later this year.

The new line will be based on an association uniting five regional carriers, led by Krasair. Government officials want fusion to create a competitor to Aeroflot on internal routes. The theory is that a major alternative carrier would generate more airport hubs within the country and diversify regional routes.

Ministry officials want private shareholders to own most of the new airline. The Federal Property Agency says government should have a controlling 51 per cent stake. In any event, the new operator might need private investors to finance a $30 million purchase for regional jets to expand its fleet.