Aeroflot May Create Budget Airline

    The Wall Street Journal
    By The Wall Street Journal

    MOSCOW—Russia’s national airline, Aeroflot, is looking to take on budget big guns like RyanairRYA.DB 0.00% and easyJetEZJ.LN -0.99% by creating its own low-cost carrier.

    Aeroflot’s board of directors discussed at a meeting last week the possibility of creating a separate budget airline by 2014 that would offer no-frills tickets that are 20%-40% cheaper than those offered by traditional operators.

    The state-controlled airline’s board said the new carrier would work to “develop the most profitable routes in the European part of Russia, gradually broadening the area of operations both in Russian regions and abroad.”

    While the as-yet unnamed airline would be 100% owned by Aeroflot – which turned 90 years old this year and is still marked by its Soviet-era winged hammer-and-sickle logo — it would operate as a completely separate entity, the board said.

    On Monday, Russian business daily Vedomosti reported that Aeroflot was looking to see if changes could be made to government rules requiring airline tickets to be refundable and that meals be served on all flights. It would also seek to lift a ban on foreign pilots working for Russian carriers. The paper said the airline plans to invest around $100 million in the startup over the next two years.

    Europe’s second-largest low-cost airline, easyJet, already operates cheap flights between Moscow’s Domodedovo Airport and Gatwick Airport in London. Earlier this month, Hungarian budget airline Wizz Air said it would start a new route between Budapest and Moscow’s Vnukovo Airport on Sept. 23, operating five times a week

    The Wall Street Journal

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