Aeroflot has pulled the plug on its acquisition of struggling fellow Russian airline Transaero.

The deal was called off by the state carrier after Transaero failed to come up with an offer for Aeroflot’s proposed purchase of a 75 per cent stake before the tender deadline.

Last month, Aeroflot said it would buy a 75 per cent stake in debt-laden Transaero, the second biggest carrier in Russia, whose net debt reportedly stood at 106 billion roubles ($1.63 billion) at the end of last year.

Aeroflot chief executive officer, Vitaly Saveliev, says in a statement: “Aeroflot undertakes that all obligations to Transaero’s passengers will be fulfilled. Passengers will be guaranteed transportation or a refund in the event that a flight is cancelled.”

Russian authorities have not ruled out that Transaero may go bankrupt and the government ordered a halt in sales of tickets for Transaero flights.