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Transaero was set up in 1991. One of Russia’s top five airline carriers, it accounts for 6 percent of passenger air traffic in the country. The company is controlled by Alexander Pleshakov, Chairman of the Board of Directors, and his family. Transaero’s fleet consists of Boeing jets, including Boeing-747, Boeing-767-300, Boeing-767-200, Boeing-737-400 and Boeing-737-300. In 2005 Transaero offered 80 flight routes to 25 countries. Its passenger turnover totaled 5.25 billion passengers per kilometer, and the number of passengers rose to 1.57 million. Flight sales revenue stood at RUR 10.4 billion last year, and net profit was more than RUR 170 million. The carrier plans to bring its sales revenue to RUR 25 billion in 2008, raising net profit to RUR 1.2 billion.

Reports came on Friday evening that Transaero’s management controlled about 99 percent of the company’s shares. General Director Olga Plashakova confirmed this information. But Transaero officials say the shares are not directly owned by the management.

In October 2005, Alexander Pleashakov had a 32.81 percent stake, his wife Olga Pleshakova had 8.08 percent, and his mother Tatyana Anodina, Chairperson of the Interstate Aviation Committee, had 3.25 percent. Other large shareholders were the companies Borei-2 (19.99 percent), Ratmir+ (12.11 percent) and Puela (11.05 percent).

Alexander Pleshakov has repeatedly denied reports that some of the company’s shares were controlled by Boris Berezovsky, the Russian billionaire living in exile after falling out with the Kremlin, and companies affiliated with him. Yet, it is persistently rumored that some of the stock is controlled by Berezovsky and his affiliates. The 32.1 percent stake was said to be owned by Georgian businessman Badri Patarkatsishvili. Olga Pleshakova said Borei-2 and Ratmir+, which were seen as affiliates of Logovaz, had sold their shares in Transaero and were removed from the company’s shareholder register.

The fact that companies affiliated with Berezovsky have Transaero shares was a surprise for many financial analysts. “Representatives of the financial market think companies linked to Berezovsky have long sold their stakes in the airline carrier,” said Yelena Sakhnova, at Deutsche UFG.

Consolidation of the shares could be seen as Transaero’s preparation for an IPO scheduled for the end of 2006 - beginning of 2007. “To hold an IPO, it is not necessary to accumulate shares, but in this way Transaero will remove many risks in the eyes of potential investors,” said Tatyana Kapustina, an analyst with ATON. “The shareholders are working on the strategy of bringing the company’s shares to the public market. The Board will develop and pass a detailed plan and schedule of the IPO,” Olga Pleshakova told RBC Daily.

At this point, the company considers selling 10-15 percent of its shares to a restricted number of investors in the fourth quarter of this year or the first quarter of next year. Most likely, Transaero will sell these shares to its subsidiary Transaero-Finances. Transaero’s shares are currently estimated at between $500 million and $600 million, but some experts say the company’s capitalization could rise to $1 billion by the time of the placement. In this case it could raise some $100 million in the IPO and use the money to replace and enlarge its fleet. “The management will try to sell all excess stock, leaving itself a controlling interest. This is about 39 percent, but the final size of the placement will be determined by financial consultants,” Deutsche UFG’s Yelena Sakhnova said.

Analytical department of RIA RosBusinessConsulting