Bankruptcy proceedings for Russian Transaero to start

But Aeroflot did not manage to agree with Transaero’s creditors on restructuring its debts totalling an estimated 250 billion rubles ($3.78 billion) including leasing obligations and did not manage to acquire the 75 percent stake within the agreed deadline.

Bankruptcy is the only solution for Russia’s second largest airline Transaero after state-controlled Aeroflot backed out of purchasing the debt-laden carrier, economy minister Alexei Ulyukayev said on Friday, AFP reports.

Paphos is anticipated to be particylalry afefceted as it has become increasingly dependent on Russian tourists.

Russian authorities have not ruled out that Transaero may go bankrupt.

“The entire industry has consolidated for this task”, he said, adding that other airlines, such as Sibir, UTair and Ural Airlines would take up Transaero passengers. Russian Prime Minister Dmitry Medvedev has given the green light to begin bankruptcy proceedings for Transaero airlines, according to Russian news agencies. A source close to the deal told Interfax there are three reasons for that.

Earlier, in a statement to RIA Novosti, Russian Transport Minister Maxim Sokolov said Transaero will stop selling flight tickets from October 1, although the company itself will continue its work. Its representatives said that banks should have better calculated risks while signing lending contracts with an extremely risky strategy.

First, the airline’s shareholders have not been able to consolidate 75% plus one share that were expected to be transferred to Aeroflot.

Shuvalov is also reported to have promised the Russian government would help the 10,000 Transaero employees who may lose their jobs as well as passengers that had pre-purchased tickets.