Russian low-cost airline Pobeda may be privatized. Federal Antimonopoly Service Head Igor Artemyev has proposed this.
According to RBC, Mr. Artemyev believes that such a measure will have a positive impact on development domestic Russian transportation and will increase competition in the market. This was stated in his letter of July 18, sent to Deputy Prime Minister Maxim Akimov and Minister of Transport Yevgeny Ditrikh.
According to him, patterns have been identified in the passenger air transportation segment on short- and medium-haul aircraft that could lead to different prices being set on comparable routes."
For example, the presence of a low-cost carrier on a route increases competition and lowers ticket prices for all carriers. As the head of the FAS emphasizes in his letter, Aeroflot's subsidiary has recently been actively developing international routes, the company's share of which has now exceeded domestic flights, he notes. "At the same time, there have been instances of flight cancellations or reductions on domestic routes. We believe that such actions may be aimed at reducing competition, including with Aeroflot and Rossiya Airlines," Artemyev writes.
Against this backdrop, he believes that the Ministry of Transport and Aeroflot, which occupies a "dominant position" in the market, should make decisions regarding Pobeda's development strategy when allocating international routes, "in line with state objectives to ensure public transport accessibility on domestic routes." He also proposed "making a decision on the privatization of Pobeda and its exit from the Aeroflot group."
"While remaining in the Aeroflot group, Pobeda must develop within the country or leave the Aeroflot group and compete with it," he added.
Source: trn-news.ru