Aeroflot: second best 2015 operating margin of European legacy airlines despite Russian recession

Aeroflot Group's operating profit almost quadrupled in 2015. Among listed European legacy airlines, its 10.6% operating margin placed it behind only Icelandair, but ahead of IAG (these were the only others in double digits). This was achieved in spite of the severe recession in Russia, a nation which has been badly affected by falling oil prices and geopolitical events.

Aeroflot has benefited from the consolidation of Russian aviation and from capacity cuts by foreign airlines. The demise of Transaero accelerated the consolidation process in 2015, and Aeroflot will benefit further from this in 2016. The biggest contributor to the Group's 13% rise in passenger numbers was its low cost subsidiary Pobeda, which completed its first full year of operations in 2015. International transfer traffic through Aeroflot's Moscow Sheremetyevo hub also grew.

This year Aeroflot Group plans an acceleration of ASK growth to double-digit rates. Pobeda has launched its first international routes and the Group's regional airlines Rossiya, Donavia and Orenair will return to growth under the single consolidated brand of Rossiya, helped by routes and aircraft taken on from Transaero. The Group's longer-term goal to become one of Europe's top five airlines looks feasible.