The veteran chief executive of Russia's Aeroflot, the son-in-law of Russia's first president Boris Yeltsin, may be replaced by an executive from a Moscow industrial conglomerate, Kommersant daily said on Thursday.

Valery Okulov, married to Yeltsin's daughter Yelena, has run Aeroflot since 1997. One source told the newspaper there had been short list of seven candidates to replace him, while another said the only candidate was Vitaly Savelyev, a former deputy economy minister who works for Sistema.

Okulov led Aeroflot's transformation from a command-economy behemoth to a modern airline and packed its fleet with new Boeing and Airbus planes. He held his post after Yeltsin handed power to Prime Minister Vladimir Putin, supported by Aeroflot chairman Viktor Ivanov, a close Putin ally.

Kommersant said Okulov had been repeatedly turned down government jobs overseeing air transport.

More recently, he challenged a plan to roll Russia's failing regional airlines into a new market player, Russian Airlines, chaired by another Putin ally, Sergei Chemezov, the head of state corporation Russian Technologies.

"To send a new player into a falling market is simply creating a bubble," he said late last year.

Savelyev runs the telecoms division at Sistema, which controls Russia's largest mobile network, Mobile TeleSystems.

No one at Aeroflot was immediately available to comment on the report.