Aeroflot-Transaero deal, bigger but not better: analysts.

By acquiring its struggling rival Transaero, Russia's largest airline Aeroflot is likely to find itself in a tight spot with an additional debt burden and a fleet of ageing aircraft, analysts said.

State-controlled Aeroflot announced this week its purchase of 75 percent plus one of Transaero's shares for the symbolic price of one ruble, citing the privately-held airline's "extremely difficult financial position."

The Russian government had backed consolidation of the two airlines, which is expected to begin on Monday.

It (Other OTC: ITGL - news) is "undoubtedly the most important and significant decision" Aeroflot has ever taken, company chairman Kirill Androsov said in a statement.


By Germain Moyon.
Full story at Yahoo News.