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. Last Updated: 07/27/2016

Plot Thickens in Battle for Control of Airlines

The appointment of Yevgeny Primakov as prime minister adds an interesting twist to a murky battle under way since at least midsummer for control of the private airline Transaero: The chairman of Transaero is Primakov's wife's stepson, and he has been fighting to hold off hostile shareholders led by financier Boris Berezovsky.

Transaero is about 20 percent owned by Alexander Pleshakov, whose father, Pyotr, was once married to Primakov's current wife, Irina.

Transaero declines to say who other shareholders are, although Pleshakov has confirmed that they include the state-run Aeroflot f Transaero's main rival f as well as organizations and people linked to Berezovsky.

The Berezovsky group has said it holds 55.5 percent of Transaero, a claim Pleshakov has said he is "not prepared" to confirm. At two shareholders meetings this summer, July 24 and Aug. 14, the Berezovsky group mounted unsuccessful drives to remove Transaero management.

Days before the July shareholders meeting, Valery Okulov, the president of Aeroflot, said his company was "prepared to extend a helping hand to Transaero." Neither Aeroflot nor Transaero have commented officially on what exactly that means, although Pleshakov mocked the offer in a brusque interview this summer with Kommersant Daily: "What does 'help' mean? I can also say that if Aeroflot needs help I'm ready to offer it."

An Aeroflot spokesman denied that the company had anything to do with the struggle for control of Transaero. But aviation analysts and Russian media have interpreted the help offered by Aeroflot as a joint effort with Berezovsky to swallow its plucky younger competitor.

"It seems likely that Berezovsky, with the state's support, is trying to create a new supercompany based on Aeroflot and Transaero which would have a near-monopoly of the market," said a report issued in August by the Adam Smith Institute.

If that is so, Berezovsky and Aeroflot have long had a secret weapon in Okulov f who is President Boris Yeltsin's son-in-law.

Berezovsky is reportedly quite close to the Yeltsin family, and also powerful at Aeroflot. The Moskovsky Komsomolets newspaper said in October 1997 that Berezovsky had bought up 49 percent of state-owned Aeroflot and installed Okulov at the company's head.

The combination of Berezovsky's money and Yeltsin's family might have seemed an unstoppable juggernaut. But matters could be quite different now that they will be going up against the family of the new prime minister.

"One can imagine how 'glad' BAB [Boris Abramovich Berezovsky] is now about the rise of Yevgeny Primakov," chortled Moskovsky Komsomolets last week, in reporting news that Pleshakov was Primakov's wife's stepson.

Others suggested the highly placed family patriarchs that both company chiefs can call upon would not take much interest in the dispute.

"For the first two or three months of his reign Primakov will have more than enough to do without looking at the affairs of one particular company," said Paul Duffy, an independent aviation industry analyst in Moscow.

Andrei Korotkov, head of the government's information department, said there was no one available for comment on the relations between Primakov and Berezovsky, or between Primakov and his wife's stepson.

Pleshakov's mother, Tatyana Anodina, is a political heavyweight in her own right. Anodina heads the CIS International Aviation Committee, a government agency that authorizes flights by international carriers over Russian territory.

Kommersant Daily wrote in July that Anodina holds a sizable packet of shares in Transaero, although Pleshakov has disputed that. Pleshakov's father, Pyotr Pleshakov, was the Soviet minister responsible for the radio industry from 1974 to 1987.

Transaero ended 1997 with losses of $83 million, and indeed has never declared a profit in all the seven years of its existence. But management has defended losses on grounds that they represent investments in the future, and the company is considered one of Russia's most dynamic and successful airlines.

By volume of passengers carried, Transaero had a 6.4 percent share of the market in 1997, compared with Aeroflot's 15.5 percent. However, on internal flights, according to Duffy's estimates, Transaero has about 7 percent of the market and Aeroflot about half that.