The Board of Directors of Aeroflot Ã¢â‚¬“ Russian Airlines has accepted a proposal of the passenger carrierÃ¢â‚¬™s management to initiate bankruptcy procedures against Aeroflot-Cargo, according to Russian media reports. The decision was apparently based on the fact that Aeroflot Cargo, cut loose as a separate entity nearly two years ago has nearly five billion Russian rubles (Ã¢â€šÂ¬115 million) in outstanding debts to Aeroflot Ã¢â‚¬“ Russian Airlines and given the unfavourable cargo environment is unlikely to be able to repay those debts in the short to medium term.
In April Aeroflot Cargo reported a 31.4 per cent drop in cargo volumes, similar to much of the industry. The future of the cargo division is unclear as it will now be absorbed back into the Aeroflot parent. The first quarter results for Aeroflot Ã¢â‚¬“ Russian Airlines showed passenger traffic down 11 per cent, although this was two-time less than the civil aviation average for Russia (-20.7 per cent) and mail traffic down 20 per cent year-on-year. The carrier managed to post a net profit for the quarter, amounting to 713.1 millionrubles (Ã¢â€šÂ¬16.3 million).