26-Feb-2013 8:45 PM

Yakutia expanding international network and fleet as it marks 10th anniversary

Analysis

Yakutia is undergoing network and fleet expansion as it continues to grow and develop into a major Russian regional carrier. The airline, which launched operations 10 years ago, is also making an effort to reach international standards, having recently secured IATA Operational Safety Audit (IOSA) certification.

Yakutia is currently Russia's 11th largest airline based on capacity with just over 28,000 seats per week. The airline is close to attaining 10th position from Yamal Airlines, which offers just over 29,000 seats per week.

Yakutia splits operations between Moscow Vnukovo, Krasnodar and Yakutsk

Yakutia's operations are split between three main bases consisting of Moscow Vnukovo, Krasnodar and Yakutsk. While officially based in Yakutsk, it has more capacity at its Moscow Vnukovo and Krasnodar bases.

Yakutsk is the capital city of the Sakha Republic in Russia's Far East. Yakutsk Airport is currently ranked as Russia's 25th largest airport with just over 15,000 weekly seats, according to Innovata data. Moscow Vnukovo Airport (Russia's third largest airport with around 210,000 weekly seats) and Krasnodar Airport (seventh largest airport with around 52,000 weekly seats) are much larger.

According to Innovata, Yakutia is the third largest airline at Moscow Vnukovo Airport, with around 6% of system capacity. It is the largest airline at Krasnodar Pashkovsky Airport, with around 21% of system capacity, and at Yakutsk Airport with almost 50% of system capacity.

Yakutia top 10 bases by system capacity (seats): 18-Feb-2013 to 24-Feb-2013

Small home base at Yakutsk Airport

Despite it being a small airport, Yakutsk Airport still handles traffic from six airlines in addition to Yakutia including Angara Airlines, IrAero, Mirny Air, Polar Airlines, S7 Airlines and Transaero Airlines. The majority of traffic at the airport is domestic, however Yakutia and S7 Airlines operate international services (Yakutia to Beijing and Harbin and S7 Airlines to Beijing). Both carriers currently operate between 600 and 700 weekly international services at Yakutsk.

Yakutsk Airport system capacity (seats per week) by carrier: 18-Feb-2013 to 24-Feb-2013

Yakutia allocates about 70% of its seat capacity to domestic services. Internationally, Yakutia's capacity is split between eastern/central Europe (around 34%), western Europe (around 30%), central Asia (around 28%) and northeast Asia (around 8%). While the airline's domestic services are split between its three bases, most of its international services depart from Krasnodar.

Yakutia international capacity (seats) by region: 18-Feb-2013 to 24-Feb-2013

Yakutia top 10 domestic routes (seats): 18-Feb-2013 to 24-Feb-2013

Yakutia top 10 international routes (seats): 18-Feb-2013 to 24-Feb-2013

Yakutia adds four international routes at Krasnodar

Yakutia recently expanded its Krasnodar base in Jan-2013 and Feb-2013 with the launch of four international services to Istanbul Ataturk (Turkey), Yerevan (Armenia), Tel Aviv (Israel) and Larnaca (Cyprus). These are all new destinations for the airline as it does not operate to them from Yakutsk Airport.

With the exception of Larnaca, these were all routes previously operated by Kuban Airlines, which suspended operations on 11-Dec-2012. Kuban Airlines was the third largest airline at Krasnodar with 8,500 seats per week at the time of its suspension of services. Ak Bars Aero and UTair took over some of Kuban's routes at Krasnodar.

Yakutia's new international routes at Krasnodar and other operators

Route	Frequency	Launch date	Aircraft	Current operators*
KRR-IST	Three times weekly	04-Jan-2013	B737	Pegasus (to SAW)
KRR-EVN	Twice weekly	15-Jan-2013	B737	Armavia
KRR-TLV	Weekly	30-Jan-2013	B737	N/A
KRR-LCA	Weekly	09-Feb-2013	B737	N/A

Services from Krasnodar to Istanbul, Yerevan and Larnaca are already on Yakutia's list of top 10 international destinations based on capacity, ranking second, third and ninth, respectively. The carrier's largest international route, Moscow Vnukovo-Dresden, was only launched on 07-Nov-2012.

Krasnodar's location in the western most part of southern Russia, in the Southern Federal District (SFD), provides good access into southern Europe, the Middle East and north Africa, compared to Yakutia's other bases at Yakutsk and Moscow Vnukovo. Krasnodar is the economic centre of southern Russia.

Yakutia is the largest airline overall at Krasnodar Pashkovsky Airport with 10,500 seats per week. But domestically it is only the third largest, behind Aeroflot and S7 Airlines, with a 16.5% share of capacity and about 6,300 weekly seats.

Krasnodar Pashkovsky Airport domestic capacity share (% of seats) by carrier: 18-Feb-2013 to 24-Feb-2013

Internationally Yakutia is the largest carrier at the airport, with almost 36% of capacity (4,200 seats per week), followed by Pegasus Airlines (2,600 seats per week) and Ural Airlines (1,600 seats per week). Krasnodar currently has six international carriers operating to the airport including Armavia (Armenia), Austrian Airlines (Austria), Pegasus Airlines (Turkey), SCAT Airlines (Kazakhstan), Somon Air (Russia) and Uzbekistan Airways (Uzbekistan). Pegasus is the only low-cost carrier operating at the airport.

Krasnodar Pashkovsky Airport international capacity share (% of seats) by carrier: 18-Feb-2013 to 24-Feb-2013

Further domestic and international expansion to come for Yakutia

Further domestic and international expansion is likely to come following the Russian Federal Air Transport Agency's (Rosaviatsia) appointment in late Jan-2013 of Yakutia to operate Mineralnye Vody-Dushanbe and Moscow-Samarkand services. Ural Airlines currently operates Mineralnye Vody-Dushanbe service whereas Moskovia Airlines, VIM Airlines and Uzbekistan Airways currently operate Moscow Domodedovo-Samarkand service.

UTair currently operates Moscow Vnukovo-Samarkand service. If Yakutia does launch service to Samarkand, it will most likely be from Moscow Vnukovo, where it already has a presence.

Internationally, Yakutia may also launch services from Krasnodar and Sochi to Beijing after being approved to operate the routes. This follows the airline's launch of weekly Yakutsk-Beijing service on 29-Dec-2012.

Regional fleet expansion with Q400s and SSJ100s

According to CAPA, Yakutia currently has a fleet of 39 aircraft including Antonov An-140 (3), An-24 (12), An-26 (1), Boeing 737-700 (4), 737-800 (3), 757-200 (5), 757-200PF (1), Bombardier Q400 (1), Sukhoi SSJ100 (2) and Tupolev 154 (7) aircraft.

This fleet has been expanding in recent months, most recently with the delivery of its first of three 73-seat Q400 turboprops on 31-Jan-2013. The airline said it selected the aircraft due to its high speed, ability to operate on unpaved runways and capability in difficult conditions including high winds and extreme cold. These aircraft will replace the airline's older An-24 aircraft.

The carrier's first Q400 operated its first passenger service on 20-Feb-2013 on the Yakutsk-Neryungri route and will eventually operate services from Yakutsk to Anadyr, Blagoveshchensk, Khabarovsk, Krasnoyarsk, Magadan, Petropavlovsk-Kamchatsky, Ulan-Ude, and other airports in the Republic of Sakha. On the delivery of its first Q400, the airline highlighted the Q400's ability to provide quick access to remote airports in the Siberian region, indicating potential future use of the aircraft. The remaining two Q400s Yakutia are acquiring are expected to be delivered by the end of 1Q2013.

Yakutia also took delivery of its second SSJ100 aircraft on 31-Jan-2013. The airline received its first SSJ100 aircraft in Dec-2012. The SSJ100 aircraft have so far been placed on services from Yakutsk to Novosibirsk, Khabarovsk and between Novosibirsk, Magadan and Anadyr, often operating alongside An-140s and 737s. Yakutia does not have any further SSJ100 aircraft on order.

Further international expansion likely for Yakutia as western-built fleet expands

Over the longer term, Yakutia plans to take delivery of three 737-700s and nine 737-800s, following confirmation of a commitment to purchase the aircraft in Nov-2012. The aircraft are to be delivered between 2016 and 2018.

Yakutia mainly operates 737 equipment on international services as well as on important domestic routes. None of its eastern-built fleet operates international services.

As Yakutia's fleet currently stands, the majority are eastern-built (25 eastern versus 14 western). This will change in the coming years as the airline takes delivery of more western aircraft, replacing its older eastern-built aircraft.

As Yakutia continues to expand its network and fleet, particularly internationally with modern aircraft, it will continue to develop as an important regional Russian carrier. Having already built an extensive Russian network in its first 10 years, there is still a lot of scope for the airline to expand, especially internationally. Yakutia's efforts to bring its operations in line with international standards through achieving industry certification such as IOSA show its determination to compete not only within Russia, but also on an international stage.