Sector: Transportation
The merger of AiRUnion with other state assets around a new aviation company, to be controlled by the state-owned Russian Technologies corporation, substantially reduces the risk of bankruptcy for the aviation alliance. After having its debts rescheduled, AiRUnion should be able to streamline its operations to the benefit of its shareholders.
On September 4 the state-run Russian Technologies corporation, jointly with the Moscow city government and the Krasnoyarsk regional government, announced the establishment of a new airline. This is to incorporate the AiRUnion alliance and an array of other Russian airlines, namely, Atlant Soyuz Arilines, the Russian state transport company, Kavminvodyavia and Orenburg Airlines. The state-owned Russian Technologies corporation is to hold a controlling interest in the newly-formed airline. According to press reports, the unification has already received approval from the Russian government.
We are upbeat about the establishment of a new company, which is to incorporate AiRUnion assets. In our view, the merger signals the survival of AiRUnion airlines. At the moment, they are making operating losses, being unable to draw the necessary financing on their own. The new shareholder should make it possible for the aviation alliance to restructure its debts and improve its operations.
We believe that the decision is positive for the holders of AiRUnion shares. That said, we do not recommend buying shares in the KrasAir airline, given the complex industry conditions and the air carrier’s heavy debts. Konstantin Romanov
Other comments of the day
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KrasAir
Capitalization: $76 382 312,50
Common shares:
Price: $162,50
Delta week: 0,00%
Delta month: -1,5%
Delta year: -37,1%
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0.569
0.073
