The shareholders of Russian airlines Nordavia and Red Wings have approved a merger of the two companies and started preparations for consolidation under common management, Nordavia said in a statement on Monday. This reported by PRIME.

“We plan to create an airline holding with a united management company on the basis of Nordavia and Red Wings. The goal of the merger is to expand, which will allow us to increase financial stability of the companies, to upgrade the aircraft fleet completely, to create a common route network, and increase efficiency of the company, among other things,” the statement read.

Forecasts show higher passenger traffic of the merged airline to more than 3.5 million people in 2018, and the new airline becoming one of the first customers to order Russia-made MC-21 planes, Nordavia said.

The current owners of the two airlines will become shareholders of the merger airline.

Nordavia and Red Wings have been working as an airline alliance for more than a year. “During the merger period, each airline will work under its brand, and the airline holding will receive a new name after the merger is complete,” the airline said.

In January–August, passenger traffic of Nordavia grew almost 30% on the year to 799,000 people, while passenger traffic of Red Wings jumped about 50% to more than 1 million people. Nordavia operates nine Boeing 737-500 planes, while the fleet of Red wings includes Tu-204, Airbus A320, and Airbus A321 planes.

Russian company Sky Invest controls Nordavia, while the core owner of Red Wings is Airline Asset Management, a subsidiary of aircraft leasing company Ilyushin Finance Co.