News

Russia is planning to tighten its grip on flagship airline Aeroflot by taking control of a 25.8 percent stake owned by tycoon Alexander Lebedev, ridding the carrier of a major independent shareholder.

Aeroflot said on Wednesday it could strike a deal with Lebedev to buy his stake. The tycoon has repeatedly criticised the firm's management for the lack of cost control measures and insisted on buying and leasing more foreign planes.

Lebedev's stake could be then used to pay the government for new, as yet unidentified, aviation assets to be merged with Aeroflot -- Russia's biggest airline, but still a shadow of the mighty firm under the same name during Soviet times.

The move would increase government ownership of Aeroflot to around 75 percent and might give more incentives to the state to bring aviation assets -- spun off from Aeroflot after the collapse of the Soviet union -- back under its control.

A spokesman for Lebedev, who owns London's Evening Standard newspaper, said he would sell his stake at a discount price of USD$400 million, compared to a market value based on Tuesday's closing share price of USD$490 million.

The departure of Lebedev would be the latest move in a shake-up of Russia's aviation industry.

State-controlled conglomerate Russian Technologies has set up Rosavia, or Russian Airlines, to mop up several regional carriers crippled by the financial crisis.

The new company, yet to launch flights, could become a rival to Aeroflot, although there has also been speculation the two groups could merge.