Aeroflot Closes Cargo Division

Russian flag carrier Aeroflot Russian Airlines has closed its wholly-owned freight subsidiary Aeroflot Cargo Airlines and will bring the activities of the business back into the parent company.  According to reports in the Russian media, the venture incurred a loss of $105.3 million last year and $52.8 million during the first half of 2009 and they are speculating that the company could be declared bankrupt.
It had been expected that the existing workforce and assets of the cargo venture would simply be incorporated into a new business unit at Aeroflot which is due to launch in March 2010, but newspaper reports claim there is currently confusion over the operation of the three McDonnell Douglas MD-11Fs that Aeroflot Cargo had used on its flights between Europe and Asia.  Although initially agreeing to take over the leases of the aircraft, the Russian press claims the flag carrier has instead chosen to cancel the deals with Boeing Capital and Finnair, despite contract penalties.