Russia gifts Aeroflot with domestic carriers in return for

[Scylla]

Russia's Aeroflot has begun the process of uniting two state-run carriers operating in Russia's far east, but will not integrate Vladivostok Avia, which had originally been scheduled to join the group.

The move is the culmination of a process started earlier this year, when Aeroflot proposed to the state that it increase its holding in the Russian carrier from 51% to 75% in exchange for turning the three state-controlled domestic carriers serving Russia's far east into an Aeroflot subsidiary. Earlier discussions included other airlines, such as KrasAir, Pulkovo and Rossiya, many of which were opposed to inclusion in the scheme.

Unusually, it was Aeroflot itself that opposed the inclusion of domestic carrier Vladivostok Avia. "We cannot own what does not want to be owned. The government considers it necessary to preserve Vladivostok Avia to maintain competition," says Aeroflot general director Valery Okulov.