20 Mar 2019 19:35

Red Wings, Nordavia shareholders decide not to combine companies into holding

MOSCOW. March 20 (Interfax) - The shareholders of Red Wing and Smartavia (Nordavia's new brand) have rethought plans to create a holding company with shared capital, Red Wings head Yevgeny Klyucharev told journalists on Wednesday.

"The issue of uniting specifically with respect to ownership has been removed completely. All aspects of interaction are joint management," Klyucharev said.

Nordavia's beneficiary is the businessman Sergei Kuznetsov (through the Sky Invest Holding), and the management of the company owns some of the shares. It works in an alliance with Red Wings, which has been 100% owned by Ilyushin Finance Co. (part of the United Aircraft Corporation) since 2016; before then, Kuznetsov also owned Red Wings. At the end of 2017, it emerged that the shareholders of the two companies had decided to create a holding with shared management. They have a united flight network and fleet.

"Basically, one team manages two airlines. Shareholders on both sides understand the need to consolidate, especially in today's market. So the company will continue working as it's been working in the alliance," Klyucharev said.

In 2018, both companies made net profit, though it was much less than what was expected, he said. "There were completely objective factors for that: jet fuel and airport fees," he said.

He declined to give a forecast of the alliance's financial results this year but predicted that they will transport over 5 million passengers. "Last year, we transported 3.8 million people. This year, we'll break through the 5 million mark and thus get right up to 4-5% of the Russian market," Klyucharev said.

The joint fleet will consist of over 30 planes by the middle of the flying season, he said. Currently, Red Wings has 12 planes from the A320 family, and Smartavia has 11 Boeing 737s.