Okulov pursues unknown Irish airline(232 words)

Published: 7/16/2001

It would appear from public statements made by Aeroflot General Director Valery Okulov, that the Russian flag carrier having failed to move ahead on its negotiations with Irish carrier Virgin Express earlier this year, is still in talks with another Irish carrier to assist the airline in gaining access to the European market. There has been some speculation that the carrier might buy the Irish national carrier Aer Lingus currently scheduled for privatisation. Although this has been dismissed as wishful thinking by many commentators given both the cost of such an acquisition estimated at $420m and the state of Aeroflot's balance sheet with over $1 billion of debt. The Irish Government over the weekend also reiterated that although it thought the markets were not right for a flotation of the airline that remained the preferred route of privatisation, although the government's advisors Allied Irish Bank and Citigroup were reviewing possible trade sales. The concept of having unfettered access to the European market undoubtedly has merits for the Russian carrier. The concern remains however, does it have the ability to manage such an acquisition at this point in time and what exactly they can buy with the funds they might have available. The relative scarcity of cash could suggest a deal that simply establishes a domicile with little in the way of operating assets. Very similar in fact to the low cost carrier Virgin Express.

Article ID: 2647