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Aeroflot To Acquire Transaero For Symbolic Price Of One Ruble

Russia's state-controlled flagship carrier Aeroflot announced September 3 that it would acquire its struggling competitor Transaero airline for a symbolic price of one ruble.

"Given the extremely difficult financial situation of Transaero," along with an initiative of the Russian government, "Aeroflot's board of directors has judged it necessary to participate in stabilizing" the airline, Aeroflot said.

The announcement came after a decision to consolidate the two airlines at a government meeting earlier this week.

"Transaero's majority shareholders have sent Aeroflot a proposal to sell 75 percent of its stocks plus 1," Transaero said.

Transaero, which began operating in 1991, is the second-largest Russian airline and the country's largest privately-owned carrier.

The indebted company's woes worsened when the ruble collapsed last year in the wake of Western sanctions over Russia's aggressions in Ukraine.

Aeroflot, which is 51 percent owned by the Russian government, started out as a Soviet monopoly.

Although Aeroflot did not suffer from the economic crisis as much as its competitors, the company lost 3.5 billion rubles in the first half of the year.

Based on reporting by AFP and USAToday