Russia's flagship carrier Aeroflot is planning to form a fully fledged alliance with Air France by 2003, the airline's general director Valery Okulov announced last week.

"We've been working closely with Air France on harmonizing our schedules, as well as in the area of cargo transportation," Okulov told a news conference Monday, called to announce the company's performance for the first half of the year and to report on the results of a recent shareholders' meeting.

Aeroflot reported a year-on-year increase of 20 percent in cargo transportation and 7 percent in passenger traffic in the first six months of 2000. "Air transportation is sensitive to the overall state of the economy, which has been improving," Okulov said of the figures.

Aeroflot has also recently been focusing more heavily on national routes, rather than its international destinations.

"In the last two years, we've become a more important player in the Russian air transportation market, which, at the same time, allows us to develop international destinations," Okulov said.

Separately, commenting on the election to the board of directors of U.S. national David Herne, Aeroflot's Chairman Sergei Frank said it was testimony to Aeroflot operating as "an open company."

Frank said he hoped Herne would integrate well on the Aeroflot board.

Among the foreign companies that supported Herne's bid for a position on the board, several were U.S.-based Templeton funds investing in Russia.

Aeroflot officials said they would be trying to attract foreign investors to new projects they are looking at.

"We will actively cooperate with the investor community," said Alexander Zurabov, Aeroflot's deputy director for financial, economic and commercial activities. He mentioned the planned construction of an Aeroflot terminal at Sheremetyevo II Airport and improving the company's information technology as two priority areas for cooperation with foreign partners.

Aeroflot is also planning to hold a meeting with prospective investors in mid-July, he said.

In relation to its performance, Aeroflot will pay 9,107,000 rubles in dividends for 1999, with the company's net profit for that year, after taxes, standing at 110 million rubles.

In other news, as a result of the recent shareholders' meeting, a decision was taken to change the name of the company from Aeroflot: Russia's International Airlines to Aeroflot: Russian Airlines. The company says the new name is more in tune with management's aim to make Aeroflot known as Russia's national carrier.

Aeroflot, a joint-stock company, was formed in 1994. The number of individual shareholders – including the company's former and current employees – is around 16 percent, an Aeroflot spokeswoman said, down from a high of 49 percent. The remaining shares have been acquired by Russian and international companies, she added, though she declined to name the companies.