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Russia to Sell 23.76% Stake in Aeroflot While Retaining Control
The Russian government has initiated the sale of a 23.76% stake in its flagship carrier, Aeroflot, as part of a broader privatization and financial market development program. The Kremlin currently holds 73.77% of the airline through the Federal Agency for State Property Management (Rosimushchestvo). After the sale, the state will retain a controlling stake of 50% plus one share, ensuring continued government oversight while increasing the free float to nearly 49%.
The announcement, made on May 22, 2026, marks the second time this decade that Aeroflot shares have been offered to the market. During the COVID-19 pandemic, the airline raised nearly 80 billion rubles through a share sale to investors including the Russian Direct Investment Fund and independent Middle Eastern investors. This time, the government itself is reducing its holdings to stimulate the struggling Russian economy.
Background: Why Is Russia Selling Aeroflot Shares?
Russia's decision to sell a portion of Aeroflot comes amid severe economic pressure from Western sanctions imposed after the 2022 invasion of Ukraine. The airline has been banned from EU, US, and UK airspace, and both Boeing and Airbus have cut off parts and maintenance support. Aeroflot has been forced to ground a significant portion of its fleet, relying on cannibalized parts and unapproved suppliers to keep aircraft flying.
Deputy Finance Minister Alexei Moiseyev indicated that the sale would likely involve two or three transactions, with Russian banks expected to be the primary buyers. The move is also intended to boost Russia's capital markets, where only 7% of household disposable income is currently invested, compared to 36% in Europe and 79% in the United States. By increasing public participation in the stock market, the Kremlin hopes to inject much-needed liquidity into the economy.
The Russian aviation sanctions impact has been profound, with nearly 30 domestic carriers facing bankruptcy by 2026. Russia has funneled over $12 billion into Aeroflot to keep it operational, but the airline's financial performance has deteriorated sharply. In 2025, revenue rose to 902.3 billion rubles ($10 billion), but net profit fell nearly 65% to 22.6 billion rubles ($250 million).
Details of the Aeroflot Share Sale
Structure and Timeline
The sale involves approximately 944.6 million shares valued at around 44.4 billion rubles ($500 million) at current market prices. Rosimushchestvo launched a tender on May 22, 2026, to select a legal entity to organize the sale. Applicants must have experience placing shares on capital markets, with the application window running from May 22 to June 8, 2026. Technical preparations are planned throughout 2026, with the final timeline dependent on market conditions.
Pricing and Discounts
Analysts expect a 10-15% discount to the market price to attract institutional investors. The state will retain a controlling stake of 50% plus one share, while the free float will increase to nearly 49%. The remaining 1.2% of shares are held by various Aeroflot Group entities.
This partial privatization is part of the federal project "Development of Financial Markets," which aims to expand initial public offerings (IPOs) and secondary public offerings (SPOs) in state-owned companies. The Aeroflot privatization 2026 is seen as a test case for broader state asset sales in Russia.
Impact on Aeroflot's Future
Fleet and Operations Under Sanctions
Aeroflot's fleet, excluding subsidiaries, includes 171 aircraft: 112 Airbus planes and 59 Boeing planes. With Western sanctions blocking the supply of spare parts and maintenance services, the airline has been forced to cannibalize grounded aircraft to keep others flying. The company has also been targeted by cyberattacks; in July 2025, pro-Ukraine hacker groups destroyed over 7,000 systems, canceling 100+ flights and paralyzing Sheremetyevo Airport for nearly 72 hours.
Russian-Made Aircraft Deliveries Delayed
The Aeroflot Group has orders for nearly 300 Russian-made aircraft, including the Yakovlev MS-21, Yakovlev SJ-100, and Tupolev Tu-214. However, deliveries have been repeatedly delayed as Russian manufacturers struggle to replace Western components with domestic alternatives. The MS-21, intended to become Aeroflot's flagship, was expected to begin deliveries in 2026, but production challenges persist.
"Aeroflot is currently under state control through Rosimushchestvo and is in a period of active growth with strong financial results, boosting confidence in a potential public offering," the Russian Finance Ministry stated, though analysts remain skeptical given the ongoing sanctions and operational challenges.
The Aeroflot fleet modernization plans remain heavily dependent on the success of Russia's domestic aviation industry, which has faced immense difficulties in replacing Western technology.
Market Reaction and Implications
The Russian stock market has reacted cautiously to the news. The Moscow Exchange's MOEX index saw moderate gains in the days following the announcement. International investors remain largely barred from Russian markets due to sanctions, limiting the pool of potential buyers to domestic institutions and sanctioned-friendly foreign entities.
Analysts at the Institute for International Finance note that the sale could help stabilize Russia's financial markets by increasing the supply of liquid shares. However, the long-term outlook for Aeroflot remains uncertain. The airline's market share in Russia is approximately 42.3%, including its subsidiaries Rossiya Airlines and the low-cost carrier Pobeda. In 2024, the group carried 55.3 million passengers, but numbers have declined as international routes remain cut off.
The Russia aviation industry crisis 2026 shows no signs of abating, with domestic carriers struggling to maintain safety standards amid parts shortages. The International Civil Aviation Organization (ICAO) has raised concerns about the safety of Russian aviation operations.
Frequently Asked Questions
What percentage of Aeroflot is the Russian government selling?
The Russian government is selling 23.76% of its stake in Aeroflot, reducing its holding from 73.77% to 50% plus one share, maintaining majority control.
How much is the Aeroflot stake worth?
The stake is valued at approximately 44.4 billion rubles ($500 million) based on current market prices, though a 10-15% discount is expected to attract investors.
Why is Russia selling Aeroflot shares now?
The sale is part of a broader privatization program aimed at developing Russia's financial markets and boosting the economy, which has been severely impacted by Western sanctions.
Who can buy Aeroflot shares?
Due to sanctions, international investors are largely barred. The primary buyers are expected to be Russian banks and institutional investors, with the sale likely split into two or three transactions.
Will Aeroflot survive the sanctions?
Aeroflot faces significant challenges, including fleet groundings, parts shortages, and cyberattacks. The airline is heavily dependent on government support and the development of Russia's domestic aviation industry. The long-term outlook remains uncertain.
Sources
- Haber.aero - Russia is selling its shares in Aeroflot
- Reuters - Russia launches tender to organise sale of 23.76% stake in Aeroflot
- Logos Pres - Russia prepares to sell Aeroflot shares
- Izvestia - Federal Property Management Agency announced selection of organizer for Aeroflot shares privatization
- Wikipedia - Aeroflot
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