Russia`s giant state aircraft holding company United Aviation Corporation (UAC) and a future Ukrainian counterpart could collaborate through a share swap, officials said on Tuesday, according to Reuters.

Ukraine`s deputy industry minister said such a deal would help develop the country`s aviation construction industry, which is currently a mass of units and factories held by the State Property Fund and which the government would like to privatise.

"A proposal came from the Russian side to exchange shares between our aviation corporation, which will be created, and, for example, UAC," the deputy minister, Vitaly Nemylostyvy, told business daily Ekonomicheskiye Izvestiya.

Nemylostyvy said Ukraine hoped to rationalise the sector within 12-18 months and would retain control through the issue of a "golden share".

A UAC spokesman confirmed collaboration talks.

"The current structure of Ukraine`s aviation sector does not allow for this, and it was proposed to UAC`s chief that he look at some variants of ownership structures, in order to think about joining together," spokesman Maxim Sysoev told Reuters.

Collaboration between the two countries in defence and aviation sectors dates back to the Soviet era but since the Soviet Union`s collapse, Ukraine`s heavy industry including aviation construction has declined.

Relations between the two neighbours have been tense over issues such as gas prices and Kiev`s NATO aspirations. Russia has said it would cut defence and other industry ties with Ukraine if it joins the military alliance.

Guardian, Reuters