Russian Prime Minister Dmitry Medvedev (L) inspects a Boeing 737-800 NG, owned by Dobrolet airlineReuters

Russia is set to open the way for low cost airlines to operate in the country as the government prepares to change the law to allow airlines to charge for food and baggage, according to Aeroflot.

Moscow has already removed barriers to employing foreign pilots and selling non-refundable tickets in the past year, Areroflot's chief executive Vitaly Saveliev told Reuters.

"These are the laws that will allow Russia to have low-cost airlines which will operate under the same rules as those in Europe and America," said Saveliev. "Low-cost, it is a very simple service – no food and no free-of-charge luggage."

Aeroflot announced plans to launch a low cost airline Dobrolet in 2013, with the aim of providing fares up to 40% lower than the state-carrier's regular fares.

"We are looking at Ryanair as a model. For us, Ryanair is maybe one of the best low-cost carriers," he said.

Dobrolet made its debut in June. In a highly political move, the first flight went from Moscow to the Crimean capital of Simferopol.

Russia controversially annexed the Black Sea peninsula from its neighbour in March, in a move that was condemned by the European Union and the United States.

While low-cost carriers have failed in Russia in the past, Savaliev said the new venture would soon make a profit.

"In five years we are going to have about ten million passengers each year and we are going to make a profit in two years," he said, as quoted by Reuters.

Savaliev said middle-cost carriers had lost market share to low-cost and premium services.

"People now prefer to fly either premium class or with low-cost carriers," he said. "That's why in Russia we are going to be ready, because we now have this low-cost carrier."

The low-cost venture will target Russia's expanding middle class.