Audit Chamber to Look into Aeroflot Prices

MOSCOW, January 15 (RIA Novosti) – The Russian Audit Chamber will inspect the pricing policy of Russia’s largest air carrier Aeroflot, the head of the financial control body Sergei Stepashin said on Tuesday.

“We are planning not only to inspect Aeroflot, but also to look into its pricing policies. We will analyze the competitive environment and the reasons why foreign companies are unable to enter [the Russian domestic market],” he was quoted as saying by the Prime news agency. “I think that a serious inspection like this will provide an opportunity for our citizens and authorities to take a closer look at this company’s pricing policies.”

As an example, Stepashin cited prices for the company’s flights to Russia’s Black Sea resort of Sochi, saying that few people can afford such tickets. According to the air carrier’s official website, the price of a one-way Aeroflot ticket from Moscow to Sochi for the nearest dates ranges between 4,700 and 23,600 rubles ($156-$785) for economy class and between 23,600 and 29,200 rubles ($785-$967) for business class.

A source in Aeroflot told Prime that the company establishes its prices in full accordance with market dynamics.

“We have adequate market prices. However, one should keep in mind that Aeroflot’s expenses are bigger than those of other companies because it has to operate and maintain a modern fleet. The company is also the largest taxpayer among all companies, and invests a lot in service. All these factors should be taken into account,” the source said.

The inspection will coincide with the large-scale monitoring of air ticket prices in Russia conducted by the Federal Anti-Monopoly Service, an executive body that controls and supervises market competition in Russia. The service said it would take action against air carriers that drive up domestic flight prices.

Established in 1923, Aeroflot is one of the world’s oldest airlines. Through its hub at Moscow’s Sheremetyevo Airport, the Russian flagship air carrier operates flights to 115 destinations in 52 countries, including 33 destinations in Russia. As of December 2012 the Aeroflot fleet includes 128 foreign and Russian-made aircraft with an average age of 5.6 years.

The company’s largest shareholder is the Federal Agency for State Property Management (Rosimushchestvo), which holds a 51.17-percent stake.


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