Aeroflot posts surprising profit

AEROFLOT has posted its results for 2009 showing its net profit has more than tripled, to US$86 million. This is below the $100 million that chief executive officer, Vitaly Savelyev forecast in April, but still a surprising result considering that the full revenue fell 27 per cent.

The results could either be contributed to astounding efficiencies at the airline or may be due to fees paid by foreign airlines to the Russian government for the privilege of flying in Russian airspace, which Aeroflot receives an enviable share of to compensate for potential lost business. Current estimates place that share at about $300 million a year more than its 2008 net income.

In June last year, Russia’s Federal Anti-Monopoly Service proposed redistributing Aeroflot’s royalties among all Russian air carriers that perform international flights. Since the Russian government ‘encouraged’ the oligarch, Alexander Lebedev, to sell his 25.8 per cent stake in the carrier, so that it could grow its share from 51 to 77 per cent, nothing more has come of the suggestion.