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. Last Updated: 07/27/2016

Aeroflot's Board Backs Payment of Dividend

The board of Aeroflot has recommended a 2008 dividend but has revised this year's budget to account for falling passenger numbers, the state-controlled company said Wednesday.

"Taking into account the financial results for the 2008 financial year, the board of directors recommends that the general shareholders meeting pays out dividends," Aeroflot said in a statement, without specifying the size of the payout.

The company's shares closed up 0.2 percent on the MICEX, lagging the exchange's 30-stock index, which was up 3 percent.

The board, which met Tuesday, had been expected to consider a payout of 700 million rubles ($21 million) -- 64 percent less than the dividends on 2007 results.

The flagship carrier, in which the state holds 51 percent, posted a 2008 net profit of 6 billion rubles according to Russian accounting standards, broadly in line with the previous year.

Aeroflot said that in the first few months of 2009 its passenger numbers fell by 14.2 percent.

The Federal Air Transportation Agency said Tuesday that Russian passenger volumes in March were down 22 percent year on year and that freight shipments had fallen 21 percent.

"The board of directors has approved the management's proposal to correct Aeroflot's production plan and budget for 2009 due to falling demand for air transport at a time of the global economic crisis," the company said, but gave no details.

Late last year, Aeroflot forecast that profits would rise to a record 9.3 billion rubles in 2009.

The company also said its cargo division was no longer profitable because of a 30 percent fall in freight and that possible outcomes for the division included its liquidation through bankruptcy.

The board voted to create the Aeroflot-Cargo unit in late 2005 and began operations in November 2006.

Aeroflot has not yet decided on the possibility of acquiring a stake in German airline Blue Wings from businessman Alexander Lebedev, who owns about 30 percent of Aeroflot.

"The board of directors decided to continue the study on the rationale of acquiring this airline," Aeroflot said.

Lebedev had offered the firm his 49 percent stake in Blue Wings for a nominal 1 euro after German regulators revoked its license. Germany's Federal Office for Civil Aviation said in a statement Monday that it had issued the airline a new license.

The Czech Republic ruled out a bid by the Russian carrier to purchase Czech Airlines amid complaints by politicians there that a deal could create security concerns. Aeroflot called the claims political.

nA new order signed by Prime Minister Vladimir Putin on Wednesday will make permanent a 20 percent import duty on most commercial aircraft, Interfax reported Wednesday.

The tariff, which was extended for nine months last July, will be charged on aircraft that range in size between 19 and 200 seats. Many Russian airlines are in the process of modernizing their fleets and replacing Soviet-era jets with newer foreign planes.

(Reuters, MT)