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. Last Updated: 07/27/2016

Transaero Gives Up London Route

Russia's largest private airline, Transaero, had planned for some time to discontinue flights between London and Moscow, but when it did so Friday, it stranded dozens of Moscow-bound passengers at London's Gatwick Airport.

While Transaero blames "commercial reasons" for the abrupt cancellation, representatives of a group of outside shareholders in the airline say the incident is an indication of the company's precarious finances.

Transaero was grounded because its fuel had been seized for debts last Thursday, they said.

The company had long planned to stop the flights between Moscow and London via Riga, which were run jointly with the Latvian carrier RiAir, said Transaero spokeswoman Galina Ponomaryova.

"We hope to start flying to London in December without the stopover in Riga," she said.

But she would not explain why passengers had been sold tickets for the canceled flight. RiAir officials contended on Monday they, too, had not received notice about Friday's cancellation.

Transaero's problems appear to be related to a boardroom squabble that has rocked the airline lately. A group of shareholders led by financier Boris Berezovsky's LogoVAZ claims to hold 55 percent of the company and is trying to oust the current management, headed by Transaero founder Alexander Pleshakov.

Vladislav Vershinin, a LogoVAZ representative who has been appointed Transaero spokesman by the opposition shareholders, attributed the flight cancellation to a decision by a Moscow court last Tuesday to seize Transaero's jet fuel reserves.

Fuel supplier Oil and Lubricants Trading House had filed a case against the airline, which owes it 9.9 million rubles ($562,000), and the Moscow City Arbitration Court last Tuesday gave it permission to seize 9,834 tons of jet fuel that was stored at Transaero's base at Sheremetyevo.

"Bad financial management has ruined Transaero," Vershinin said, adding that the airline is now losing $200,000 daily.

RiAir was baffled at Transaero's decision to cancel the flight that would have been the last one under a two-year-old code sharing agreement, which allowed both sides to sell tickets for each others' flights and use a common aircraft f provided by Transaero f on the London route. In fact, RiAir would have liked to continue the service.

"We were satisfied with the arrangement," RiAir marketing manager Inga Freiberga said by telephone from Riga. "The decision to discontinue it was entirely Transaero's."

She would not say whether RiAir was contemplating legal action against Transaero for Friday's incident. Passengers, who had received no warning of the cancellation, were offered hotel accommodation before being bundled onto a British Airways flight to Moscow on Saturday.

Paul Duffy, a Moscow-based aviation expert, saw the cancellation and the decision to annul the RiAir agreement as a bad sign.

"I am surprised they would stop flying on a route that has a fair number of passengers," Duffy said. The fuel seizure appeared to be a plausible explanation for the abrupt cancellation, he said.

Duffy said that Transaero's problems were part of the crisis in Russian aviation, which has seen a 30 percent fall in domestic passenger volumes while foreign air travel has plunged 70 percent. Most airlines are firing staff and cutting costs to cope and Transaero last month returned four leased Western aircraft in an effort to economize.

London is only the latest city to be struck off Transaero's list of destinations. The airline recently canceled flights to Tyumen, Samara and Novy Urengoi, and its winter timetable will see flight frequencies to some other destinations reduced as well, Ponomaryova said.