The Russian government is preparing to sell a significant stake in a major state-owned company to bolster the federal budget, according to The Moscow Times. The Federal Agency for State Property Management (Rosimushchestvo) has initiated the search for an organizer to sell 23.76% of Aeroflot, the national air carrier. This move signals a desperate attempt by Moscow to address mounting fiscal deficits exacerbated by the ongoing war.
The government plans to offload a third of its total 73.8% stake in the airline, hoping to generate approximately 45 billion rubles. These funds are urgently needed to plug a massive budgetary hole. Recent indicators show that Russia’s industrial output is declining, and most economic sectors are performing poorly. The reliance on selling strategic assets indicates that the Kremlin is moving toward asset liquidation to maintain the illusion of economic stability.
Aeroflot’s market capitalization, estimated at 187 billion rubles as of late May, does not fully reflect the long-term risks faced by the company due to international sanctions and limited access to spare parts and global markets. By selling these shares on the exchange, the state is effectively liquidating its national inheritance to cover military expenditures.
Analysts suggest that this privatization is not a strategic move but an emergency measure. As the Russian leadership acknowledges an economic downturn, it remains clear that the fiscal buffer is rapidly shrinking. This economic instability, however, does not immediately halt the military machine, as the Kremlin continues to prioritize front-line operations despite the underlying fiscal rot. The decision to offload a crown jewel like Aeroflot reflects the gravity of the situation within the Russian financial system, proving that the cost of the war is becoming unsustainable for the state’s long-term economic survival.