The two airlines have agreed on state support for strategic cooperation.

Published: 3/15/2000

On 10th March, Valery Okulov Director General of Aeroflot and Kazakh Prime Minister Kysymzhormat Tokayev reached an agreement on the state support for strategic cooperation between Aeroflot and the Air Kazakhstan Group (AKG), the Kazakh national air carrier. This follows reports earlier this year that the group was discussing a possible alliance with Aeroflot on the Alma-Ata-Moscow route, using Sheremetyevo airport. The agreement is not expected to affect AKG's obligations to Transaero for the launch of the Moscow-Astana air routes. Formed in January this year to improve the financial viability of the entities comprising the group, AKG is currently struggling under a substantial burden of debts estimated at around $100m. This includes debts to other airlines including Aeroflot, reported to be owed $1.7m. Alexander Krinichansky, President of AKG, has said that state support and subsidies will be vital in the company's resurrection. According to Okulov, air alliances make up more than 60% of the international transportation market and this could be the only way forward for Russian and CIS air carriers to protect the market from foreign competitors. Over the past six months, Aeroflot has signed agreements with Kraznoyarsk Airlines and national air carriers in Belarus, Georgia and Armenia.

Article ID: 1676