Aeroflot issues emergency stock to boost funds despite sanctions fallout

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Russian airline Aeroflot hopes to raise $3 billion by issuing new shares amid ongoing economic turmoil caused by Western sanctions and Moscow’s war in Ukraine.

Aeroflot shareholders on Wednesday approved the emergency issue of new shares worth 185.2 billion rubles, according to Reuters news agency reported. More than half of that amount, 107 billion rubles ($1.74 billion), will come from the Russian government’s National Wealth Fund.

The planned cash injection comes after a host of Western countries closed their airspace to Russian planes in retaliation for Moscow‘s invasion of Ukraine, cutting off Aeroflot from several of its most profitable routes.

Western sanctions have also seen aircraft manufacturers Boeing and Airbus suspend supplies of spare parts, affecting 95% of Aeroflot’s fleet.

The company could use the capital to order 300 planes from United Aircraft Corporation, a subsidiary of state aerospace conglomerate Rostec, business newspaper Vedomosti reported.

Potential new models for Aeroflot’s fleet could include the Russian-made Irkut MS-2, a medium-range aircraft with a capacity of more than 200, or the smaller Sukhoi Superjet 100, a passenger aircraft made national.

The new restrictions mean Aeroflot is still struggling to revive its passenger numbers, which were still down a third at the start of the year from pre-coronavirus levels.

Aeroflot and its low-cost Pobeda brand carried 2.2 million passengers in March 2022, down from 2.8 million in February and less than half of the 4.6 million carried in March 2019.

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