Company Watch - Aeroflot.

Jun 25, 2007

Aeroflot flew 1.98 billion RPKs in May, up 12.7% from the year-ago month. Load factor was 67.5%. Jun 19, 2007

Alitalia's auction risks fizzling out altogether as it enters the final stretch, leaving the Italian government with the bleak prospect of pumping more cash into the unprofitable airline to keep it flying. Put up for sale by Rome amid much fanfare six months ago in an effort to turn it around, Alitalia's auction initially attracted 11 bidders before the list was whittled down to three. One of them has since pulled out, and on Monday speculation grew that Aeroflot might be the next to depart after it complained about the price tag. The Russian airline denies any plans to quit. Analysts also question the wisdom of potentially selling Alitalia to a state-controlled airline such as Aeroflot when the aim has been to privatise it. The deadline to submit binding offers for Alitalia, worth about USD$1.3 billion on the market, is just two weeks away. Jun 19, 2007

Alitalia's shares fell to a 2007 low on Monday on worries over its sale by the Italian government after one of the two bidders, Russia's Aeroflot, expressed concern about the price tag. Aeroflot denied a report by Russian news agency Interfax that it had pulled out of the bidding for the government's 49.9 percent stake but said a purchase would depend on price. Alexander Lebedev, the majority owner of National Reserve Corporation (NRK) which owns 30 percent of Aeroflot, said he was "negative" about the deal and believed the Russian airline's management was taking its cues from the Kremlin. Another representative of NRK said the Russian airline was worried that a high price would make restructuring Alitalia, which loses 30 million euros a month, too difficult. Jun 18, 2007

New partners could join Italian carrier Air One's consortium with Intesa Sanpaolo that is bidding for Alitalia, the bank's chief executive said, sending the Italian airline's share price surging. Italian newspapers reported on Wednesday that US private equity firm MatlinPatterson, which rejoined the auction on Tuesday, could join the Air One consortium in bidding for the carrier. MatlinPatterson's return boosts an auction that has been rattled by concern that Aeroflot, one of the other two final bidders, might pull out. The US fund was earlier part of a consortium with fellow private equity shop TPG which had pulled out citing difficulties with the auction's conditions. The auction is now heading into the final stretch, with binding offers for the airline to be submitted by July 2. Italian newspapers have speculated this could be extended, however. Jun 20, 2007

Rolls-Royce said that its Trent engine had been selected by Avianca, Aeroflot and lease company AerCap. Colombian national airline Avianca has chosen the Trent to power up to 30 jets in a deal worth up to USD$1.1 billion at list prices. Rolls-Royce said under the deal, its first for the Trent engine in Latin America, it would also provide 10 years of support for the engines. Aeroflot selected the Trent to power the Russian airline's new fleet of 10 leased Airbus planes in a deal worth around USD$600 million. Rolls-Royce said the deal was the first for its Trent engine in Russia and included a long-term service agreement. Dutch aircraft leasing company AerCap has ordered Trents to power 10 firm Airbus A330 plane orders and three options. Deliveries of the aircraft are due to begin in 2009. Jun 20, 2007

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