EU sanctions force Aeroflot to suspend low-cost airline

(MOSCOW) - EU sanctions targeting Russia over its role in Ukraine's conflict have hit Aeroflot's low-cost domestic airline Dobrolet, forcing it to cancel all its flights because of scrapped leasing deals for Boeing aircraft.

Dobrolet said in a statement on its website that "due to the sanctions imposed by the EU... we are forced to temporarily suspend flights on all routes from August 4, 2014".

It said the sanctions imposed last Thursday resulted in the cancellation of contracts under which it leased Boeing 737-800 planes.

Passengers flying between Dobrolet's base in Moscow and Simferopol, a city on the Crimean peninsula that Russia annexed from Ukraine in March, will be transported on Dobrolet's sister budget airline Orenair for a few weeks. Other passengers will be reimbursed.

The European Union adopted the sanctions against the Aeroflot subsidiary as part of raft of measures against associates of Russian President Vladimir Putin and several firms.

The EU also targeted Russia's banking, defence and energy sectors in view of its "actions destabilising the situation in eastern Ukraine", where pro-Russian rebels have been fighting Ukrainian forces for months.

Dobrolet, unveiled late last year as a budget airline for domestic Russian destinations, carried out its first flight in June, from Moscow to Simferopol.