Under heavy pressure from Western sanctions and airspace bans, Russian state flagship airline Aeroflot plans to raise up to 185.2 billion roubles ($3 billion) in an emergency share issue, the company said on Tuesday.

Aeroflot, which is controlled by the Russian state, said shareholders at its annual meeting had approved the issuance of 5.42 billion new shares which could be bought at a price of 34.29 roubles each under an open subscription.

With passenger numbers still down by a third on pre-coronavirus levels at the start of the year, the company has since been severely hit by Western sanctions in response to Russia's Feb. 24 invasion of Ukraine.

Having once harboured ambitions of becoming a world-leading airline, it now finds itself on the front lines of what President Vladimir Putin has called an "economic war" with the West.

The European Union, United States, Britain and Canada have shut their airspace to Russian planes, cutting Aeroflot off from lucrative flights to Western markets.

Planemakers Airbus and Boeing - which accounted for all but 10 of Aeroflot's 187-strong fleet at the start of the year - have halted the supply of aircraft parts and services to Russian carriers.

And in a symbolic blow to the company's footprint in the West, British soccer club Manchester United terminated its sponsorship agreement with the Russian flag-carrier.

In response, Aeroflot opted to not pay dividends on its 2021 earnings and has not published first quarter results for this year, shielding itself from having to reveal the financial toll of being cut off from the majority of its routes.

RAINY-DAY FUND

The much-needed $3 billion injection is set to come in part from Russia's National Wealth Fund (NWF) - the government's rainy-day fund that is being marshalled to help support key companies hit by Western sanctions - with the government promising to invest 107 billion roubles ($1.74 billion) in Aeroflot.

Initially designed to fund large-scale infrastructure investments, the Kremlin has said it will use the $198 billion NWF to prop up the economy through what is set to be a deep recession as well as plug the government's own deficit.

In May, the government spent $4 billion to buy preferred shares of Russian Railways, the country's biggest employer. Meanwhile Putin ordered ministers on Tuesday to draw up new rules for how the NWF can be spent, suggesting guidelines could be relaxed to allow for more state funding to revive economic activity and potentially opening the doors to a flood of government-backed emergency investment.

During the pandemic, the Russian government stepped into to buy 80 billion roubles ($1.3 billion) of Aeroflot shares using the NWF.

In its statement on Tuesday, Aeroflot did not provide details how much of the new share issue the state may buy. The finance ministry declined to comment.

The airline carried 2.2 million passengers in March 2022, including on its low cost airline, Pobeda - Russian for "victory". That was down from 2.8 million in February, and less than half the 4.6 million carried in March 2019. ($1 = 61.66 roubles) (Reporting by Reuters; Editing by Mark Trevelyan)