Aeroflot plans $3bn emergency cash infusion

Russian state flagship airline Aeroflot is planning to raise up to 185.2 billion roubles ($3bn) in an emergency share issue, it said.

Aeroflot, controlled by the Russian state, on Tuesday said shareholders at its annual meeting had approved the issuance of 5.42 billion new shares that could be bought at a price of 34.29 roubles ($0.56) each under an open subscription.
The airline also plans to order 300 aircraft from United Aircraft Corporation, which is majority-owned by Rostec, Russia’s state aerospace and defence conglomerate, the Vedomosti business newspaper reported.

The paper, citing two sources, said Aeroflot was eyeing the Irkut MS-21 medium-range plane, also known as the MC-21, which can carry more than 200 passengers and is due to enter service this year.

Aeroflot also wants the Sukhoi Superjet 100, Russia’s main domestic-made passenger jet, which typically seats just less than 100 passengers. A smaller number of orders would be made for the Tupolev Tu-214, which seats about 200 people, it said.

With passenger numbers still down by a third compared with pre-coronavirus levels at the start of the year, the company has since been severely hit by Western sanctions.

The European Union, United States, United Kingdom and Canada have shut their airspace to Russian planes, cutting Aeroflot off from lucrative flights to Western markets.

Airbus and Boeing – which accounted for all but 10 of Aeroflot’s 187-strong fleet at the start of 2022 – have halted the supply of aircraft parts and services to Russian carriers.

In response, Aeroflot opted not to pay dividends on its 2021 earnings and has not published first-quarter results for this year, shielding itself from having to reveal the financial toll of sanctions.