"Responding to the proposal to hand over the state-owned share packages in the Far Eastern airlines to Aeroflot, we suggested that the Transportation Ministry consider consolidating the assets into a unified air company," said Igor Konkov, an aide to the economic development and trade minister.
The state holds 100% and 50% of stock in the Dalavia and Vladivostokavia air carriers in the Far East.
Konkov said consolidating the assets would raise the companies' capitalization, after which their sale or transfer to Aeroflot, Russia's flagship air carrier, which is 51% owned by the state, can be discussed.
A meeting of Aeroflot shareholders earlier approved an additional issue of 250 million shares. The state was expected to acquire the shares by transferring its stock in the Far Eastern airlines to Aeroflot's charter capital.
Russia's economics minister, German Gref, said in mid-July that Aeroflot might be privatized in 2007, but that it first had to be excluded from the list of "strategic" enterprises that cannot be majority-owned by foreigners.
Gref said his ministry was drafting a decree to exclude Aeroflot from the list of strategic enterprises.
The sale of the government's stake in Aeroflot was discussed in 2005. The company's management and Transportation Minister Igor Levitin did not support the proposal at the time. They said the airliner has to renew its aircraft fleet and build a new international terminal in Moscow, Sheremtyevo-3, to raise its market capitalization before privatization.
