Small airlines resist merger efforts

Published: 5/5/2000

According to Vitaly Lugunov, Deputy Head of the Volga Region Department of the FSVT, the insolvency of many of the babyflots in the area covered by the department could lead to a new airline being established out of the smaller carriers. The FSVT sees its task in the Volga, as with elsewhere in Russia, as being the creation of larger air entities from the remnants of what is largely bankrupt sector according to Lugunov. With the purpose of creating a viable service for agricultural, forestery and medical coverage in addition to the issue of providing passenger transportation. The task of creating the new companies is however, being thwarted by the sheer complexity of ownership structures according to Lugunov and the unwillingness of airlines to accept their fate. He did however, comment that the FSVT is in discussion with airlines from Moscow and Nizhni Novgorod regarding the provision of service and as consolidators of the sector, but at present the discussions are very much in early stages and was reluctant to name the participants. Given that Aeroflot has recently setup its regional airline in Nizhni Novgorod and has a virtual monopoly of the route, it would seem likely that Aeroflot may be at least one of the parties in question.

Article ID: 1545