
Russia's flagship carrier, Aeroflot, is considering buying a share in an ailing Irish airline in a bid to increase its presence in Europe.
A group of company officials had talks in London on the possible purchase of a share in Virgin Express Ireland, a division of Virgin Express Holdings Plc., which also operates British carrier Virgin Express. Aeroflot declined to say what share is being considered after last week's discussions.
Ives Poneels, a Virgin Express spokesman in Brussels, would not confirm that negotiations with Aeroflot had taken place, but he said talks with several interested parties are in progress.
He added that three of the five destinations that the Irish division serves independently have been closed, but the airline will still fly from Shannon to London's Gatwick airport and from Gatwick to Brussels until March 12.
A spokeswoman for Aeroflot said the company would like to take advantage of the European Union's open-skies agreement that allows EU-licensed airlines to fly to any European destination if the route can generate sufficient traffic and there is enough airport space.
She added that Aeroflot might eventually use the European airline to offer its passengers connection flights from Europe to Southwest Asia via Moscow.
Analysts say Aeroflot is unlikely to fly within Europe under its own flag, but it would be able to offer its passengers more connections.
Yevgeny Satskov, an analyst at Renaissance Capital in Moscow, said the possibility of acquiring an EU-licensed carrier was the most important factor for the Russian flagship.
Operating a European carrier might be a step toward becoming a full-fledged member of a global alliance, said Andrei Abramov, an analyst at NIKoil brokerage in Moscow. Offering convenient connection flights to its passengers is a crucial task for the company on international flights, according to Abramov. "[Buying a share in Virgin Express (Ireland)] would be an inexpensive way to get more opportunities in Europe," he said.
If Aeroflot acquired a controlling share in Virgin Express (Ireland), it would be able to develop a new destination network that would suit its needs in Europe, said Satskov, adding that the Russian carrier could use the European airline to fly to smaller cities in Europe and collect passengers for its flights to Russia from larger European destinations.
Buying a share in the Irish carrier would give Aeroflot several options, according to Satskov. "The positioning of Virgin Express (Ireland) in the market as a budget carrier is not quite in line with Aeroflot's recent plan to offer more business-class services. So it may either use it as a discount carrier or try to raise the level of services to higher standards."