More moves in the Russian market: Aeroflot merges subsidiaries

Soon to be rebranded...

While the aftershocks of Transaero's bankruptcy are still being felt, more important airline industry news have kept coming out of Russia...this time nothing less than the restructuring of Aeroflot's network of subsidiaries.

Two of Aeroflot's subsidiaries, Donavia, that covers a regional network in Southern Russia centerd on the city of Rostov-on-Don, and Orenair, that operates mainly in the charter business, will be folded into Aeroflot's St.Petersburg-based subsidiary Rossiya, which is already commercially integrated with the Russian flag carrier.

Low cost carrier Pobeda and the Far East subsidiary Aurora are left as stand alone entities.

As reported by the Russian press, the logic behind this move is the consolidation of Aeroflot Group in three main market segments: Aeroflot as the premium brand, the expanded Rossiya (including Donavia and Orenair) for mid-market and regional, and Pobeda for the low cost market. Aurora would operate separately in the distant Far East.

Will see how this works out in terms of pricing and product, particularly once the main competitor Transaero is out of the picture, or whether the different brands will continue to operate in primarily separate geographical markets...