Saturday, April 22, 2006

Aeroflot Renationalises Russian Airlines?

Russian Ministry of Transport on Friday aired its ambition to gather all state-owned stocks in Russia's various national and regional airline companies under the umbrella of Aeroflot, Reuters reports. Such measure would effectively mean renationalising the bulk of Russia's airlines, as the state still is the majority shareholder in Aeroflot.

The statement made the Aeroflot share soar upwards by 8% on the Moscow stock exchange during Friday's trade alone. If implementing these plans, Aeroflot would gain a majority control over the Russian airline market, which today is split up in a variety of national and regional airlines. Aeroflot would thus get next to a monopoly position on the Russian airline market, making all other companies in the trade dependent on its infrastructure and vulnerable to buyouts, boycots, illoyal competition, or whatever the reborn Aeroflot hegemon might come up with. The Russian state today owns stocks in 61 various airlines and is majority shareholder in an additional 57 regional airlines. By transferring all these shares to Aeroflot, state ownership of the company would also be strengthened to a staggering 75% of shares.

The plans of the Ministry of transport are in line with president Putin's overall strategy to control or renationalise vital resources, commodities and assets, reinstating the state as a key-player in the Russian economy. The control of infrastructure such as airlines, pipelines, or natural monopolies, has been a long-held ambition of Putin for the enrichment and power of the state and its controllers - Russia's new Putinist élite.

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