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Aeroflot Retains $170M in Overflight Fees

Aeroflot has retained a major part of overflight fees paid to the company by European airlines in 2012 for the right to fly over Siberia to Asia instead of ceding them to the Federal Air Transportation Agency, Vedomosti reported Monday.

According to one source close to the company's board of directors, Aeroflot has retained a "lion's share," while another source said the company had received about $200 million from foreign airlines.

The Federal Air Transportation Agency collected about 15 percent of this amount, leaving Aeroflot with $170 million, he said. In previous years, the agency received about two-thirds of the company's overflight fees.

Agency and Aeroflot representatives declined to comment.

"The question of whether to keep the royalties was raised by board member Sergei Aleksashenko during a board meeting last summer," a source told Vedomosti.

Aleksashenko's initiative was supported by anti-corruption blogger and opposition leader Alexei Navalny, who was elected to the carrier's board last year, and the company's CEO, Vitaly Savelyev.

Anatoly Khodorkovsky, deputy director of IK Region, said it would be a great success if Aeroflot  had managed to retain $170 million.

This amount accounts for over half of the carrier's $296 million net income for the first nine months of 2012, according to the International Financial Reporting Standards.

In accordance with an agreement with the European Union, starting from 2014 the overflight fees will be cancelled. The EU has been insisting on canceling royalty payments because it views them as discriminating against European airlines.

But an official with Aeroflot said this did not mean that the carrier would lose those benefits next year.

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