Aeroflot’s takeover of troubled Transaero falls apart

Aeroflot’s proposed takeover of debt-laden Russian airline Transaero has fallen apart because the airline’s shareholders failed to submit a formal proposal in time.
State-controlled Aeroflot’s board of directors said that Transaero shareholders had failed to submit the proposal before the deadline stipulated in a tender offer for a 75% stake in the carrier.
As a result Aeroflot would not extend its offer to buyout Russia’s number two airline.
Reports suggest that the Government is currently considering other rescue plans but that bankruptcy proceedings had not been ruled out.
Transaero said: “Following the decision of the Government of the Russian Federation on the external management and sanation of Transaero Airlines, the company has started to revise its flight schedule and examine its cooperation with other carriers and partners with a view to ensure carriage of its passengers holding the tickets of Transaero Airlines.
“In the nearest days, Transaero will carry out its flights in accordance with the current schedule.”
The country’s second largest airline got into financial difficulties after the Ukrainian crisis and the resulting European and American sanctions again Russia, the resultant weaker Rouble in turn triggering a serious decline in its core international markets such as the Caribbean, and south East Asia.
Its debts are reported to have reached Rbs67.6bn at the end of March.
However, its cargo volumes had begun to recover in July after the earlier economic headwinds.
Transaero had, in December last year, 104 aircraft with an average age of 16 years (nearly four times that of Aeroflot) including nine directly owned Boeing 777, 767 and 737s, with the remainder on financial or operating leases.
It had also signed a memorandum of intent for eight A330-200s, 12 A330-900neos and had firmed up orders for eight A320neos and four A380s, although delivery of the latter initially planned for 2015 was postponed until further notice. Transaero also had four 747-8s on order from Boeing.
On Monday, the airline announced plans to move all its flights at Moscow’s Domodedovo airport to the capital’s Vnukovo airport from October 25.
In a statement about the airport transfer, Transaero said: “This decision was made with consideration for commercial and logistic advantages of flight concentration in a single Moscow airport. This concentration of operations fully meets interests of passengers.
“Now they have the opportunity to make a transfer between all the airline’s flights via the hi-tech Terminal A of Vnukovo airport. Its infrastructure provides for comfortable and fast connections."
It added: “It is of particular importance that Transaero will concentrate all its operational resources in a single airport hub. This will allow enhancing the efficiency of passenger services as well as aircraft maintenance.”