UPDATE 1-Russia's Aeroflot considers leaving SkyTeam alliance - source

Fri Jun 28, 2013 3:38am EDT

MOSCOW, June 28 (Reuters) - Russian state-controlled airline Aeroflot sees no benefits from its membership in the SkyTeam alliance, but a decision to leave the group is not for management to take, a source close to its board told Reuters.

Aeroflot is considering leaving the SkyTeam alliance because of unfavourable agreements with other members, in particular U.S. Delta Air Lines Inc, the Kommersant daily reported on Friday.

"There is no point in cooperating with them," a source close to the board told Reuters. He doubted, however, that Aeroflot would drop out of the alliance unless there is a political decision to do so.

The agreement to join SkyTeam in 2004 was signed in the Kremlin, a political stamp of approval largely due to close ties with France. Air France-KLM is a leading member of the group.

The newspaper cited sources close to Aeroflot's board of directors as saying the company was not happy with the development of its routes in the United States, where Delta Air Lines charges relatively high fares.

Dropping out of the alliance could cost Aeroflot $20 million and the airline may consider joining Star Alliance, the biggest airline marketing group, with 27 members.

As a member of SkyTeam, which brings together 19 global airlines, Aeroflot cannot undercut prices offered by other members and could become more competitive by joining the Star Alliance, Kommersant said.

Aeroflot declined to comment on the report.

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