Govt should not pull out completely from Aeroflot - airline boss
MOSCOW. Aug 14 (Interfax) - General Director OJSC Aeroflot Russian Airlines Vitaly Savelyev thinks the government, which owns 51% of the airline, should not pull out completely from the company's capital.
"The picture will become clearer by 2016, but not before. It is likely that in a good market the government would be wise to sell a blocking stake and keep 25% plus one share," he said in an interview published by the newspaper Kommersant on Tuesday.
He does not think it is a good idea for the government to sell off its entire stake in the airline due to the size of the Russian territory and the dispersion of its people. The government could sell the other 25% with time and if there is a solid basis for this, but not straight away.
"With privatization the situation on the market needs to be taken into account and the trend now is negative. A consequence of the international and European crisis is that share quotes, including ours, are going down. All analysts say that Aeroflot is strongly undervalued. Aeroflot shares now cost 42.45 rubles. Experts say a fair price is 75-91 rubles," he said.
The government stake should be sold to a profile investor, Savelyev said.
It was reported earlier that the government would pull out of Aeroflot before the end of 2016.
Aeroflot flew over 14 million passengers in 2011. The airline has a fleet of over 100 planes.