Aeroflot Group is prepared to sell its 51% stake in Siberian regional carrier Aurora (HZ, Yuzhno-Sakhalinsk), according to letters on the matter exchanged with the governor of Sakhalin Oblast, Valery Limarenko, the Russian aviation business site ATO has reported.
The exchange of letters between the governor and Aeroflot Group general director Vitaly Savelyev suggests that the subsidiary could soon be spun off.
“Having reviewed your proposal to sell the shares in Aurora, I hereby inform you that the administration of Sakhalin Oblast is ready to start negotiations on this matter,” Limarenko wrote on May 13.
Aurora was launched in 2013 with the merger of SAT Airlines (Russian Federation) and Vladivostok Air, the aim being to position it as a single operator for the vast region of Russia’s far east. Sakhalin holds the remaining 49% of the shareholding.
The carrier has fallen short of its majority parent’s expectations. Apart from Sakhalin, which raised the airline’s registered financial capital, and the region of Primorsky Krai which acquired Dash 8-400 aircraft for the carrier, no other regional administration cooperated to develop Aurora.
According to the ch-aviation fleets module, the carrier currently operates a fleet of ten A319-100s, three DHC-6s, one Dash 8-200, three Dash 8-300, and five Dash 8-400s.
On January 14, the federal government criticised Aurora for not reaching its targets, and President Vladimir Putin consequently ordered the creation of a new airline to carry passengers across eastern Siberia.
That project has now been included in a new national economic recovery plan for Russia, the newspaper Vedomosti reported on May 26, with a budget of RUB30 billion rubles (USD423 million) and based on a plan prepared by the Ministry of Economic Development in mid-May.
Several options to implement the project are being discussed at once, according to Vedomosti. Creating it on the foundations of Aurora was previously considered, but on May 13 it was announced that state-owned Red Wings Airlines (WZ, Moscow Domodedovo) would buy dozens of unwanted Irkut SSJ 100/95 and yet-to-be-built MC-21-300 narrowbodies, to have a fleet of up to 76 Russian-made aircraft by 2024.
“The option for Aurora to serve as a basis for the new airline had indeed been discussed. As far as I know, according to the latest information, Red Wings has been selected for the project. What the reasons behind this decision are, I cannot comment,” an unnamed official from the Sakhalin administration told Russian Aviation Insider.
“We responded [to Aeroflot’s proposal] because we are not indifferent to the fate of the airline, which we co-own. The region is interested in gaining control over Aurora. What the terms of the sale would be, or when the negotiations would start, there’s no information. We are now waiting for further comments,” he said.
The oblast pledged its support for the regional carrier, with the official saying it would continue to invest in the airline: “Our Aurora is a true regional airline. Its product in the far eastern market is very relevant. Even in the current conditions, we won’t leave it.”
