Russia's Aeroflot acquires rival Transaero airline

Russia's state-controlled flagship carrier Aeroflot announced Thursday that it would acquire its struggling competitor Transaero airline.

"Given the extremely difficult financial situation of Transaero," along with an initiative of the Russian government, "Aeroflot's board of directors has judged it necessary to participate in stabilising" the airline, said Aeroflot in a statement of the acquisition for a symbolic price of one ruble.

The announcement came after a decision to consolidate the two airlines was made at a government meeting earlier this week.

"Transaero's majority shareholders have sent Aeroflot a proposal to sell 75 percent of its stocks plus 1," Transaero said in a statement earlier Thursday.

"The company's shareholders are convinced that the Russian government's plan to consolidate the air transportation sector will be realised," it added.

Transaero, which began operating in 1991, is the second-largest Russian airline and the country's largest privately-owned carrier.

The indebted company's woes worsened when the ruble collapsed last year on the back of Western sanctions over the Ukraine crisis.

Aeroflot, which is 51-percent owned by the Russian government, grew out of the Soviet monopoly of the same name.

Although Aeroflot did not suffer from the economic crisis as much as its competitors, the company lost 3.5 billion rubles ($52.4 million) in the first half of the year.