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Russia's Failing Economy Results In The Sale Of Its 2nd Largest Airline

August 31, 2015 - Due to U.S. and other western countries sanctions imposed on Russia for its involvement in Ukraine's civil war, Russia's economy has fallen to the degree that it is in a full blown recession and many economist believe that the Russian economy is in even worse shape that what it appears.

With the drop in recent oil prices and with the prospect that the Obama administration will get the support they need from congress to approve the Iran deal will allow Iran to sell its oil further hurting the Russian ruble.

As a result of the Russian economy, air passenger travel has fallen dramatically. Transaero Airlines, Russia's second largest airline has in counted debt of over $100 million (U.S.) due to loss of passenger travel and paying on loans in which the company borrowed money to expand its fleet.


Russia's largest passenger airline, Aeroflot PJSC agreed to takeover the failing Transaero Airlines. In a statement Transaero Airlines said, “In an economic situation that has been fairly described as a perfect storm, Transaero Airlines no doubt is experiencing difficulties”.

With China recently finding oil, up to 20.5 billion tons it will further erode the Russian economy. With the recent find by China it will reduce China's consumption on the world markets resulting in reduced oil prices around the world. Which does not surprise me why our congress is against the Iranian deal. Its always about oil.

First Deputy Prime Minister Igor Shuvalov said, that Russia backed consolidation and that Aeroflot will purchase 75 percent share of Transaero which began service in 1991. The company operates scheduled and charter flights to 103 domestic and international destinations with its main hubs in Moscow and Saint Petersburg. Transaero was the first airline to receive a western-made aircraft, it was the Boeing 737.


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