Russia to roll out 'Victory' budget airline

MOSCOW (Reuters) - Russia's national carrier Aeroflot will name its new low-cost airline Pobeda, or Victory, a symbol of defiance against Western sanctions over Ukraine that grounded the budget brand's predecessor.

Aeroflot's previous attempt at a low-cost airline, Dobrolyot (Good Flight), suspended operations in August, just two months after its maiden flight. Its lease agreement for Boeing aircraft was cancelled under European Union sanctions because it flies to Crimea, which Russia annexed from Ukraine in March.

Aeroflot vowed to register a new airline and a source with the company said on Tuesday it will be called Pobeda, a word associated in Russia with victory in World War Two, a source of national pride and a symbol of the country's military might.

Aeroflot plans to launch Pobeda ticket sales on Nov. 1 and begin flights mid-month. The carrier will fly from Moscow to eight Russian cities but not to Crimea.

The EU and the United States stepped up sanctions against Russia after Crimea was annexed and as separatist unrest spread and violence erupted in eastern Ukraine.

More than 3,700 people have been killed since April in fighting there between government troops and pro-Russian rebels seeking to split from Kiev.

Moscow supports the rebels but denies being party to the armed conflict despite what the West says is irrefutable evidence of its involvement.

(Reporting by Gleb Stolyarov; Writing by Gabriela Baczynska; Editing by Catherine Evans)