People remembered that I was a member of Aeroflot’s board of directors, and they’re asking how I feel about the news that Aeroflot will buy Transaero.
Very negatively. As is, generally speaking, quite clear from the news, this should really be read as: “Aeroflot will be forced to buy Transaero.”
This is one of the government’s favorite ways of dealing with airline problems: have Aeroflot buy it. So it ends up buying all sorts of pointless, loss-making junk that ought to go through bankruptcy. And then it is forced to launch equally hellish, pointless projects like the Far Eastern airline.
I’m sure no one at Aeroflot is happy about this acquisition. Aeroflot’s fleet is relatively new; Transaero’s is not. Aeroflot, despite being huge and state-owned, was a far more market-oriented company than Transaero, where everything rested on backroom schemes, shady arrangements, and “issues” handled by the powerful mother of the company’s owner.
Transaero should be put through a proper bankruptcy process, and bankruptcy does not at all mean that everyone who bought tickets will be left without service. There are examples around the world of much larger airlines going bankrupt — and nothing, everyone was transported.
What is being created now is a super-monopolist, and de facto not only Aeroflot itself but the entire air travel market is being pushed out of any kind of market-based existence.
That will be bad for everyone, and first and foremost for us, the consumers.
P.S. So there you have it: on this news, Transaero shares rose by 40%, while Aeroflot shares fell by 6%. Once again, we are rescuing not the bankrupt company’s customers but its shareholders, helping them with budget money. Crooks, real crooks.