Russia - Transaero in bankrupcy proceedings - Curt Lewis

Russian Aviaton:  As Transaero fails, Aeroflot closes in on a monopoly

THINGS don't look good for Transaero, Russia's second largest airline. Weighed down by estimated debts of 250 billion roubles ($4 billion), the privately-owned carrier had been pinning its hopes for survival on a reluctant takeover by Aeroflot, Russia's flag-carrier, which is majority owned by the government. That mega-merger, announced in September, seemed to offer a last-ditch alternative to insolvency. But Aeroflot has since walked away from the deal and two major lenders have now started bankruptcy proceedings. Winding the company up is considered "the only possible option", according to Alexey Ulyukaev, Russia's economy minister. He blames "ineffective management" for its demise.

Transaero's financial predicament is plain for all to see. The airline posted net losses of half a billion dollars in each of the past two years. One-sixth of its revenues were going straight to creditors before the Aeroflot deal was announced. But assigning blame is not as straightforward as Mr Ulyukaev suggests.