Sky giants unite
After several years of providing competition to former state monopoly airline Aeroflot, Russia’s Transaero company has ended the rivalry by signing a secret memorandum of cooperation. Its contents are believed to include accords on complementary flight schedules and prevention of fare wars. Transaero, which since its inception has been 10% owned by Aeroflot, began by developing domestic flights, though its current growth is due to international expansion. Aeroflot, meanwhile, as the old international division of the state company, is weak on domestic flights. By cooperating more closely, Aeroflot and Transaero will be able to compete more effectively with foreign airlines like Lufthansa, which have recently penetrated deep into the Russian market.
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